2024 (11) TMI 939 - CCI - Companies Law

Violation of Sections 3 and 4 of the Competition Act, 2002 - spreading false rumours in the market about the changes in prices by issuing rate cards with lower rates than those of suppliers which ultimately is having an adverse effect on the sellers and customers - HELD THAT - The Commission notes that the Informant has levelled allegations against 5 OPs with the apprehension that they would collectively abuse their dominant position in future. The Commission observes that it is a settled position that the provisions of the Act do not provide for inquiry into the cases of joint/collective dominance. In view thereof, no case of contravention under Section 4 of the Act is made out. As regards alleged violation of provisions of Section 3 of the Act, the Commission, having considered the evidence submitted by the Informant viz FIR dated 23.06.2023 and two newspaper articles, notes that, prima-facie, the said evidence does not point towards alleged cartelization by the OPs. The Commission further notes that in the facts and circumstances of the present case, it is not getting established that spreading alleged false rumours/ misinformation is the result of cartelisation or are resulting into cartelisation as there are multiple buyers and sellers in the market and the price of the commodity is determined by way of negotiation on a day-to-day basis. The Commission is of the opinion that there exists no prima facie case and the Information filed is directed to be closed forthwith under Section 26(2) of the Act. Consequently, no case for grant of relief as sought under Section 33 of the Act arises and the same is also rejected.

Summary

Issues:
Alleged violation of Sections 3 and 4 of the Competition Act, 2002 by the Opposite Parties based on spreading false rumors and manipulating pricing in the market.

Detailed Analysis:

1. Allegations and Background:
The Information was filed under Section 19(1)(a) of the Competition Act, 2002, alleging contravention of Sections 3 and 4 by the Opposite Parties (OPs). The Informant, representing Ship Recycling Industries Association (SRIA), accused the OPs of acting as intermediaries manipulating pricing through false rumors, adversely affecting sellers and customers.

2. Role of Informant and SRIA:
The Informant, a Senior Executive Secretary of SRIA, highlighted that SRIA members are engaged in supplying ship recycling materials, primarily dealing in commodities like scrap iron and rolling plates. The pricing of these commodities was determined by sellers without the involvement of intermediaries.

3. Alleged Activities of the OPs:
The OPs, based in Gujarat and Punjab, were accused of spreading false rumors through WhatsApp groups, causing speculation in commodity prices. This led to frequent price adjustments over two years, impacting the pricing system and compelling SRIA members to sell at lower prices.

4. Additional Information Submitted:
The Informant submitted further details, including the OPs acting as illegal intermediaries manipulating pricing, creating a dominant position, and influencing buyers. Invoices were provided to show the impact on pricing due to the OPs' involvement, emphasizing that SRIA had no role in price determination.

5. Commission's Decision:
After considering the evidence and submissions, the Commission noted the allegations against the OPs for spreading false rumors and forming WhatsApp groups to lower prices. However, the Commission found no evidence of cartelization or collective dominance by the OPs, leading to the closure of the case under Section 26(2) of the Act.

6. Conclusion and Relief Sought:
The Commission concluded that there was no prima facie case for contravention under Section 4 or violation of Section 3. As a result, the relief sought by the Informant under Section 33 was rejected, and the Information was directed to be closed. The Secretary was instructed to communicate this decision to the Informant accordingly.