CCI issues ‘cease and desist’ order against trailer-owners associations

The Competition Commission of India (CCI) has issued ‘cease and desist’ order against Trailer Owner Associations (TOA) based in Chennai for indulging in anti-competitive practices. The CCI found the TOAs to have contravened the provisions of the Competition Act.

The trailer owners were given four rate hikes between 2014 and 2019. In 2018, there was another instance of strike, and National Association of Container Freight Station (NACFS) Chennai decided to approach the CCI to help in maintaining market pricing for the service rendered by the trailer operators, said an official of NACFS.

The TOAs were alleged to have interfered in the fixation of tariffs for trailers and imposed a restriction upon the members of the NACFS and their sister concerns, with regard to plying of their own trailers for movement of containers.

According to the NACFS these decisions were taken in trade association meetings, wherein these conditions were made to be agreed upon by the members of the Informant on alleged threats of strikes.

The Commission observed that none of the TOAs denied having participated in the meetings where such decisions of anti-competitive nature took place, thus, establishing the existence of agreement/understanding/arrangement amongst them, which are presumed to have an appreciable adverse effect on competition.

The CCI examined the role of trade associations and the legitimacy of actions taken by them under the Act, and found that, in the present matter, the TOAs had transgressed their legal contours and facilitated collusive decision-making by allowing fixation of prices and restricting the provision of services under their aegis. The Commission noted that the TOAs, many of which did not appear before the Commission during the hearings, were not able to rebut the said presumption.

The TOAs were found to have manipulated the market forces and narrowed the scope of competition through the aforesaid collective collusive action. Based on evidence on record, CCI found the ten TOAs to have contravened the provisions of the Act.

Accordingly, the Commission directed the TOAs to cease and desist from indulging in practices that were found to be in contravention of the provisions of Section 3 of the Act.

Avnash Iyer, Chairman, National Association of CFS, Chennai Chapter, reacting to the order said that the CCI has gone in-depth into the matter and accurately pointed out that the actions of the transport associations is in violation of law. Now it is incumbent on the Government to ensure that these unlawful acts are curtailed and the industry is allowed to run without any threat of strikes. This includes their re-examining the recent incidents, and taking action on the perpetrators of these disruptions.

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