New Delhi/Bhubaneswar: The Competition Commission of India (CCI) has held four truck owners’ associations in Odisha guilty of anti-competitive practices for fixing freight rates and preventing independent transporters from operating in mining areas.
Subsequently, the competition watchdog directed the truck owners’ associations (OPs) to cease and desist from indulging in any practice, conduct or activity that has been found in contravention of the provisions of Section 3 of the Act. Section 3 pertains to anti-competitive agreements.
“The OPs and their identified individuals are found in contravention of Section 3 (3) (a) and 3 (3) (b) of the Act by indulging in fixing and revising freight rates for transportation of mineral-carrying goods carriages, and not allowing any independent transporter to transport raw materials from the mines,” the regulator was quoted by news agency PTI as saying.
According to the order passed on Tuesday, independent transporters were required to register with local associations or pay entry fees before they could operate in mining areas.
The Commission observed that these conditions were not merely procedural but had the effect of restricting market access.
The commission further noted that the consistent practice of mandating registration, coupled with the denial of operational freedom to independent transporters, reflects a concerted approach adopted by the truck owners’ associations to control the supply of transportation services.
“The mandatory nature of such requirements, along with the absence of any transparent or non-discriminatory framework, suggests that these practices went beyond mere facilitation and operated as barriers to entry,” CCI said in the order.
Accordingly, such conduct is found to be in contravention of the provisions of Section 3(3)(b) read with Section 3(1) of the Act.
The competition watchdog, however, did not find evidence to support allegations that the associations had colluded to permit only smaller trucks for transportation in order to create artificial scarcity and push up freight rates.
It said the investigation did not establish any concerted action on that issue.
CCI also held the office-bearers of the four associations liable under Section 48 of the Competition Act, noting that they were responsible for the conduct of the associations’ business and played an active role in freight rate fixation and restricting transportation to member trucks.
