Millennium Post

CCI may relook at cartelisation issue

Competition Commission on Thursday said it could take a relook at the issue of cartelisation in the airline industry in terms of hike in airfares but maintained that ticket prices generally moved up due to a mismatch between supply and demand.

'The Commission looked at the airfares some time ago, but we found that the fares had moved up and down more because of the market play dynamics and not because of anti-competitive practices, that they had formed a cartel. So if the need arises, the Commission will look into the issue again,' its Chairman Ashok Chawla said on the sidelines of an event organized by industry lobby FICCI here.

Maintaining that the aviation sector was going through a 'bit of turmoil', he said there was a volatility in demand and supply, mainly on account of two large airlines reducing capacity for certain reasons.

He was apparently indicating at cash-strapped Kingfisher and Air India which have reduced capacity for financial problems as well as strikes.

'So when the number of players in a sector goes down, there is always volatility in demand and supply. And that seems to be the main thing happening in the aviation sector,' Chawla, who was Secretary in Civil Aviation and Finance Ministries earlier, said.

He also pointed out that the fares move up and down, mainly during the festive seasons or when there was more demand.

'That need not be a competition issue. In fact, it may reflect more robust competition,' the Competition Commission chief said.


The Competition Commission has found evidence of cartelisation in the country's tyre manufacturing industry and is expected to issue an order soon, an official said. The anti-trust regulator has been probing allegations of cartelisation among tyre manufacturers following a compliant. A senior official on Thursday said the Commission has found cartelisation in the tyre industry and an order could be issued shortly.

However, names were not divulged. The Director General of the Commission, which acts as its investigating arm, has already submitted the report on the issue. Generally, cartelisation refers to entities entering into agreements whereby they decide not to compete on price or product or customers. Such practices adversely impact overall competition in the market. Cartelisation is prohibited under the Competition Act. The Commission has the mandate to eliminate practices that have an adverse impact on competition and protect the interests of consumers. Recently, the fair-trade regulator had passed an order against cement companies on charges of cartelisation. According to official data, the Commission was looking into 39 cases while 26 others were under investigation with the Director General as on June 30, 2012. Majority of cases relate to anti-competitive agreements.
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