CCI rejects complaint against NMDC

A complaint filed by Association of Indian Mini Blasts Furnaces charged that NMDC's pricing mechanism was 'arbitrary and excessive'

Fair trade regulator CCI has dismissed charges against National Mineral Development Corporation (NMDC) that it had abused its dominant market position with regard to mining and production of iron-ore in Karnataka.

A complaint filed by Association of Indian Mini Blasts Furnaces had alleged that NMDC abused market dominance and adopted unfair pricing mechanism that amounted to violation of the Competition Act.      

The association charged that NMDC’s pricing mechanism was “arbitrary and excessive”.  

However, in an order dated October 3, Competition Commission of India said “there does not exist a prima facie case for causing an investigation to be made by the Director General under section 26(1) of the (Competition) Act”.      

According to CCI, the relevant market in this case would be market of production/supply of iron ore in Karnataka.      

In its order, the fair trade regulator said the Supreme Court has dealt with the pricing policy decisions of NMDC and has categorically passed an order stating that fixation of basic price by the entity was transparent and did not require any interference.      

CCI noted that NMDC “was producing iron ore in the state of Karnataka under the orders of the Supreme Court, and neither was it selling nor fixing the sale price of iron ore in the State of Karnataka on its own.      

“Thus, all the actions of Opposite Party 1 (NMDC) in so far as it pertained to state of Karnataka were in compliance of the orders of the Supreme Court.”      

Further, the fair trade regulator noted that “since the international market shifted to fixing the prices on quarterly basis, instead of the annual system prevalent till 2009-10, Opposite Party (NMDC) also started fixing prices for its domestic long-term customers on quarterly basis with effect from April, 2010 along with export contracts.     

“Every enterprise is free to undertake such prudent and sound commercial decisions to survive in a dynamic business environment and such changes prima facie do not raise competitive concerns.”      

According to CCI, there was nothing in the public domain to prima facie lead to the inference that the company was abusing its dominance, even on assumption that NMDC was a dominant player in Karnataka.