CCI rejects accusation that Coal India Limited has indulged in abuse of dominant position through its e-auction scheme

CCI rejects accusation that Coal India Limited has indulged in abuse of dominant position through its e-auction scheme

While deciding a case, the Competition Commission of India dismissed a complaint, alleging abuse of dominant position on the part of Coal India Limited for availing its electronic auction scheme wherein arbitrary and discriminatory conditions had been fixed while making available allocations of coals through that scheme.The small-scale industry raised its complaint regarding the imposition of undue terms and conditions of e-auctioning process offered by the coal giant CIL. Some of the malpractices resorted to are as follows: Unfair Pricing: that there is higher pricing by CIL while selling through e-auctions than the notified prices. Discriminatory Prominence: where undue favors were accorded to the larger scale buyers on the basis of actual preference, and the small-sized players had to suffer discrimination. Limited Access: The complainant alleged exploitative terms that foreclosed smaller units from competing fairly in the tendering process. This action is against the provisions of Sections 4(2)(a) and 4(2)(c) of the Competition Act, 2002. These sections ban abuse of dominant position through discriminatory prices and discriminating terms. working Conclusion by CCI The CCI, upon a detailed inspection, did not discover any prima facie case of abuse of dominance by CIL. Observations are as follows: Market Dynamics: e-auctions are conducted in a completely transparent non-discretionary manner wherein all parties are treated at par irrespective of size. Just Pricing: The e-auctions price is governed by the market dynamics of demand and supply as opposed to arbitrary decisions. Regulatory Compliance: The terms of the e-auction scheme were found to be in consonance with regulatory norms, and no preference was found or exclusionary practices. Absence of Evidence: The inquiry commission concluded that the complainant had failed to put forth prima facie evidence to prove discriminatory practices or predatory pricing. Order and Effect The CCI held that despite CIL's stronghold on the coal market, its acts in the e-auction scheme did not amount to an abuse of such dominance. The complaint was dismissed without any further investigation and thereby legitimized the process of e-auction by CIL. This decision signifies providing substantial evidence about anti-competitive practices and clearly shows that proper balance must exist between the exercise of regulatory overreach on mechanisms driven by markets, mainly those sectors with undeniably substantial public sector undertakings presence. In providing clarity over this permissible scope, the decision guarantees fair competition against dominant players such as the industries of coal so that operation freedoms are not squeezed.

Find Lawyers In Your City

Connect with Best Lawyers at your location