Our Bureau

The Competition Commission of India has issued cease and desist order against eight firms found guilty of bid rigging and cartelisation in a tender floated by Eastern Railway.

However, the competition watchdog has refrained from imposing any penalty considering that the firms were MSMEs with limited staff and turnover; the cooperative and non-adversarial approach adopted by the firms in acknowledging their involvement and the economic stress wrought upon the MSME sector in the wake of Covid-19.

The CCI held in its final order that the eight firms had contravened the Competition law provisions that proscribe anti-competitive agreements.

‘Cartel formation’

CCI found these firms to have indulged in cartelisation in the supply of axle bearings to Eastern Railway by means of directly or indirectly determining prices, allocating tenders, coordinating bid prices and manipulating the bidding process. The evidence in the matter included e-mails, call detail records and the statements of the representatives of the firms. The e-mails exchanged showed that the firms discussed quantity allocation with respect to the tenders of Indian Railways for the procurement of axle bearings amongst themselves. The vendors were also found to have discussed the compensation mechanism in the event that some of them did not win the agreed quantities.

The case was initiated on the basis of a reference filed on behalf of Eastern Railway.

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