The Competition Commission of India (CCI) has dismissed allegations of abuse of dominance against Coal India Limited (CIL) concerning its e-auction scheme for coal. The complaint claimed the 2022 e-auction scheme was discriminatory and contravened provisions of the Competition Act, 2002. The informant alleged that the scheme’s clauses were one-sided, including provisions on bid security, refund processes, and auction procedures.

CIL, the world’s largest coal producer, argued that it operates under government constraints and is not dominant in the relevant market. It also emphasised global competition and substitutability of domestic and imported coal. However, the CCI delineated the relevant market as “production and sale of non-coking coal to bidders under e-auction scheme in India” and noted that CIL enjoys significant market power domestically.

The CCI’s analysis addressed several clauses of the 2022 scheme, concluding that they did not contravene competition laws. The Commission found that the bid security, auction timelines, and transportation processes were fair and standard practices in such schemes. Moreover, amendments made to the scheme, such as introducing penalties for CIL in case of supply failure, addressed concerns of imbalance, according to the Competition watchdog.

“In view of the analysis and the facts and circumstances of the present matter, the Commission is of the view that there is no prima facie case of contravention of provisions of the Competition Act warranting an investigation into the matter,” said the CCI order.

This decision brings relief to CIL, which has faced similar allegations in the past, underscoring the challenges of balancing market power with fair practices in a regulated industry. Analysts note that the ruling could bolster investor confidence in CIL, while reinforcing its compliance framework for future operations. However, some industry players believe the verdict highlights the need for greater clarity in regulatory policies to ensure competitive fairness in the coal sector. The case also underscores the growing scrutiny of public sector entities operating in critical industries, as stakeholders increasingly demand transparency and equity in their dealings.

Published on January 3, 2025