CCI issues cease and desist order against Trailer Owner Associations based in Chennai for indulging in anti-competitive practices

The Competition Commission of India (CCI) issued a final order today against ten Trailer Owner Associations (TOAs) which were found to have contravened the provisions of Section 3(3)(a) and 3(3)(b) read with Section 3(1) of the Competition Act, 2002 (the ‘Act’), which proscribe anti-competitive agreements.

These TOAs were alleged to have interfered in the fixation of tariffs for trailers and imposed a restriction upon the members of the National Association of Container Freight Station (NACFS/Informant) and their sister concerns, with regard to plying of their own trailers for movement of containers. NACFS/Informant alleged that these decisions were taken in trade association meetings, wherein these conditions were made to be agreed upon by the members of the Informant on alleged threats of strikes

The Commission observed that none of the TOAs denied having participated in the meetings where such decisions of anti-competitive nature took place, thus, establishing the existence of agreement/understanding/arrangement amongst them under Section 3(3)(a) and (b) of the Act, which are presumed to have an appreciable adverse effect on competition (AAEC). The Commission examined the role of trade associations and the legitimacy of actions taken by them under the Act, and found that, in the present matter, the TOAs have transgressed their legal contours and facilitated collusive decision making by allowing fixation of prices and restricting the provision of services under their aegis. The Commission noted that the TOAs, many of which did not appear before the Commission during the hearings, were not able to rebut the said presumption. The TOAs were found to have manipulated the market forces and narrowed the scope of competition through the aforesaid collective collusive action.

Based on evidence on record, CCI found the ten TOAs to have contravened the provisions of Section 3(3)(a) and 3(3)(b) read with Section 3(1) of the Act. Accordingly, the Commission directed the TOAs to cease and desist from indulging in practices that were found to be in contravention of the provisions of Section 3 of the Act.

A copy of the order in Case No. 04 of 2018 is available on CCI’s website at www.cci.gov.in.

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