CCI slaps 'cease and desist' order against Chennai's trailer owners' associations

CCI slaps 'cease and desist' order against Chennai's trailer owners' associations

The consortium had threatened to go on strike if their decisions were opposed

The Competition Commission of India (CCI) has issued a 'cease and desist' order against the Trailer Owners Associations (TOA) based in Chennai for indulging in anti-competitive practices.

The CCI discovered that TOAs had contravened the provisions of the Competition Act.

Chennai's National Association of Container Freight Station (NACFS) had approached the CCI to help in maintaining the market pricing for the services rendered by the trailer operators.

It is alleged that the trailers association interfered in the fixation of the tariffs for trailers. It imposed a restriction upon the members of NACFS and their subsidiaries on plying their own trailers for the movement of the containers.

Such decisions were taken during the trade association meetings, wherein conditions were set to be agreed upon by the members of the informant. In case of disagreement, the association gave threats of a strike.

Even as trailer owners were given four rate hikes between 2014 and 2019, they had called for a strike in 2018. That is when NACFS approached CCI.

The Commission observed that none of the TOAs denied having participated in the meetings where decisions of an anti-competitive nature took place. It established the existence of agreement/understanding/arrangement amongst them, which had an adverse effect on any kind of competition.

The CCI examined the role of trade associations and the legitimacy of actions taken by them under the Act. It found that the TOAs had transgressed their legal contours and facilitated collusive decision-making. They allowed the fixation of prices and restricted the provision of the services under their aegis.

The tribunal noted that the TOAs, many of which did not appear before CCI during the hearings, did not rebut the presumption. By manipulating the market forces, they narrowed the scope of competition. At least 10 TOAs contravened the provisions of the Act.

Thus, CCI directed the TOAs to 'cease and desist' from indulging in practices that were found to be in contravention of the provisions of the Act.

Avnash Iyer, the Chairman of NACFS said that the CCI had accurately pointed out that the actions of the transport associations were in violation of the law. He added that it was incumbent on the government to ensure that such unlawful acts were curtailed and the industry was allowed to run without any threat of strikes.