Fair trade regulator CCI today imposed a total fine of Rs 215 crore on Eveready, Indo National, industry grouping AIDCM and their officials for cartelisation in pricing of zinc-carbon dry cell batteries.
Invoking leniency provisions, the Competition Commission of India reduced the quantum of penalties on Eveready, Indo National as well as their officials. The fine has been completely waived off in the case of Panasonic Energy India, which was also involved in anti-competitive practices.
In a 39-page order, the watchdog has penalised Eveready and Indo National, which owns the brand ‘Nippo’, and Association of Indian Dry Cell Manufacturers to the tune of nearly Rs 215 crore. The amount includes fines on officials of the two companies as well as that of the industry grouping.
In a regulatory filing, Eveready said it will take “appropriate action after examining the order fully”.
The matter was taken up suo-moto by CCI pursuant to an application filed by Panasonic Energy India in May 2016 under the Competition Commission of India (Lesser Penalty) Regulations.
Taking a prima facie view that the case involved contravention of the provisions of Section 3 of the Competition Act, the regulator had directed its investigation arm – the Director General – to conduct a probe in the matter.
Subsequently, Eveready and Indo National filed applications under the Lesser Penalty Regulations in August and September 2016, respectively.
In its order, CCI said that the information and evidence provided by Panasonic, first applicant to file Lesser Penalty Application, was crucial in assessing the domestic market structure of the zinc-carbon dry cell batteries, nature and extent of information exchanges amongst the Opposite Parties with regard to the cartel.
The information and cooperation received from Panasonic “enabled the DG to conduct search and seizure operations” at the premises of the manufacturers and seize quality evidence in the form of emails, handwritten notes and various other documents, CCI said.
Thus, full and true disclosure of information and evidence and continuous cooperation provided by Panasonic not only enabled the Commission to order investigation into the matter, but it also helped in establishing the contravention of Section 3 of the Competition Act, it added.
Accordingly, the regulator has granted 100 percent reduction of the penalty leviable on Panasonic.
From the evidence collected in the case, CCI found that the three battery manufacturers, facilitated by AIDCM, had indulged in anti-competitive conduct of price coordination, limiting production/ supply as well as market allocation.CCI Statement
The fines imposed on Eveready and Indo National have been reduced by 30 percent and 20 percent, respectively, under the leniency provisions.
The regulator has taken into account the priority status, continuous and expeditious cooperation extended by Eveready and Indo National including admission of cartelisation, among others, to grant the reduction in the penalty to both the firms.
With regard to Indo National, the regulator also noted that the firm approached it not at the beginning but after nearly three weeks of the search and seizure operations of the DG.
Eveready Industries India has to pay a fine of Rs 171.55 crore while the penalty on its officials is Rs 53.41 lakh. In the case of Indo National, the fine is Rs 42.26 crore on the company and Rs 29.57 lakh on the officials.
“As regards the penalty to be imposed... the Commission observes that the manufacturers have accepted that they had an understanding/ arrangement with each other to cartelise in the zinc-carbon dry cell battery in the domestic market,” CCI said.
Moreover, conduct of AIDCM as a “facilitator, stands conclusively established” by the DG, it added.
The regulator has imposed a penalty of Rs 1.85 lakh on AIDCM and Rs 16.09 lakh on its officials. It was also observed that the anti-competitive conduct of the entities was continuing from 2008 to 2016, as per the release.
However, Section 3 of the Competition Act pertaining to anti-competitive agreements came into force only in May 2009.