The Tax Publishers 2018 TaxPub(CL) 0313 (CCI)

 

Express Industry Council of India v. Jet Airways (I) Ltd.

 

COMPETITION ACT, 2002,

--Anti-competitive agreements--Complaint against parallely fixations of Fuel Surcharge rates for cargo transportationObjection raised regarding fluctuation in various factors --No data or costing of any kind in support of determination of Fuel Surcharge rates provided by airlines companies --When airlines companies were unable to furnish any data or costing of any kind in support of determination of Fuel Surcharge (FSC) rates for cargo transportation and they had acted in parallel and colluded in fixing the FSC, then, fixation of the FSC parallely by the airlines companies were in contravention of section 3, therefore, the airlines companies were directed to cease and desist from indulging in anti-competitive conduct and also imposed penalty upon them. --Express Industry Council of India (EICI) filed complaint under section 3 against airlines companies on the ground that they were, inter alia, indulged in anti-competitive conduct, as they had acted in parallel and colluded in fixing of Fuel Surcharge (FSC) rates for cargo transportation. Airlines companies raised objections that mere price parallelism did not indicate collusion as it might be a consequence of interdependence in a market, which was oligopolistic in nature. Further that, there were various factors, which influenced the determination of FSC by the airlines. Held: Airlines companies were unable to furnish any data or costing of any kind in support of determination of the FSC rates. Therefore, merely providing factors, which were not correlated to the FSC was a futile exercise conducted by the airlines companies. Airlines companies had not been able to show how their impugned conduct resulted in accrual of benefits to consumers or made improvements in production or distribution of goods. Airlines companies were engaged in similar business and were operating at the same level of the production chain. Airlines companies had acted in parallel, thus, the only plausible reason for increment of the FSC rates by the airlines companies was collusion amongst them, which resulted into indirectly determining the rates of air cargo transport in terms of provisions contained in section 3. Fixation of the FSC parallely by the airlines were found to be in contravention of section 3. Hence, the airlines companies were directed to cease and desist from indulging in the anti-competitive conduct and also imposed penalty upon them.

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