CCI finds Container Trailer Owners Coordination Committee & its sub-associations to be indulging in anti-competitive conduct

Competition Commission of India: The  Commission (CCI) has found Container Trailer Owners Coordination Committee (CTOCC) and its four participating associations, namely, Cochin Container Carrier Owners Welfare Association (CCCOWA), Vallarpadam Trailer Owners Association (VTOA), Kerala Container Carrier Owners Association (KCCOA) and Island Container Carrier Owners Association (ICCOA), to be in contravention of the provisions of the Competition Act, 2002.

In a reference filed by the Cochin Port Trust, it was brought to the notice of CCI that these associations, under the garb of ‘Turn System’, have indulged in unilateral fixation of prices. It was alleged that, during the Turn System, the users and container trailers were obliged to book services only through this centrally controlled system and that CTOCC was restraining outside transporters from lifting the containers which was impeding the ability of the users to hire trailers of their choice.

Following a detailed investigation by the Director General (‘DG’), CCI found that CTOCC, along with the 4 participating associations, resorted to price fixing under the garb of the Turn System. In terms of Section 3(3)(a) read with Section 3(1) of the Act, the presumption arose against the said arrangement leading to AAEC, which was not satisfactorily rebutted by these associations, despite being given ample opportunity. Thus, CCI held them to be in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act. However, on the allegation pertaining to limiting and restricting the provision of services under Section 3(3)(b) read with Section 3(1) of the Act, CCI found the evidence to be insufficient to hold CTOCC or any of its participating association responsible.

Through this Order, CCI has unequivocally clarified that though forming an association for furthering the legitimate trade activities does not fall foul of the Act, transgressing the legitimate boundaries and indulging in anti-competitive activities does. When the trade associations are used as a platform to promote anti-competitive ends, it becomes necessary for CCI to intervene, for penalising the anti-competitive conduct. Further, the Commission also mentioned in its order that though ‘Turn System’ may have efficiency justification in a particular trade, no such efficiency or redeeming virtue were shown by CTOCC or any of its sub-association in the present case.

CCI thus held CTOCC, CCCOWA, KCCOWA, ICCOA and VTOA to be in contravention of the provisions of Section 3(3)(a) read with 3(1) of the Act. Further, CCI has also found 10 of office bearers of CTOCC, CCCOWA, KCCOWA, ICCOA and VTOA, responsible under Section 48 of the Act, on account of the positions of responsibility held by them in these associations during the period of contravention.

Accordingly, CTOCC, CCCOWA, KCCOWA, ICCOA and VTOA and their office bearers have been directed to desist from indulging in the anti-competitive conduct found to be in contravention of the provisions of the Act. But considering certain mitigating factors, the Commission decided not to impose any monetary penalty on any of the parties. [Cochin Port Trust v. Container Trailer Owners Coordination Committee, Ref. Case No. 06 of 2014, decided on 01.08.2017]

 

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