Unfair trade practices: 7 Coal India related cases before CCI

Fair trade watchdog CCI is dealing with as many as seven cases of alleged abuse of dominant position by state-owned Coal India.

 

Competition Commission of India (CCI), which keeps a tab on unfair trade practices at market place, is currently looking into investigation reports of three cases submitted by its Director General (DG), according to the regulator's latest newsletter.

 

Four other cases are still under probe. Once it finds prima facie evidence of anti-competitive practices, CCI refers such cases for detailed investigation to the DG.

 

The latest case relates to complaint by Sponge Iron Manufacturers Association against Coal India and its six subsidiaries.

 

 The association has alleged that CIL indulged in various unfair ways such as as one-sided Fuel Supply Agreement and supplying less amount of the dry fuel despite an assured quantity under FSA.

 

While ordering probe in this particular case in July, Commission had asked the DG to club it with three other matters of similar nature that were already under investigation related to CIL.

 

"It is pertinent to note that several cases against CIL are already under investigation for alleged abuse of dominance," the regulator has said in its July-September newsletter.

 

Besides Coal India, world's largest coal producer, the complaint has been filed against its subsidiaries -- Central Coalfields, Eastern Coalfield, Western Coalfields, South Eastern Coalfields,Northern Coalfields and Mahanadi Coalfields.

 

As per the association, all these entities enjoy a virtual monopoly over production and supply of coal. They produce over 80% of the dry fuel in the country.

 

The miner has drawn flak from various quarters, especially from power sector players, for inadequate supply of dry fuel. Shortage of coal is a major factor hurting power generation in the country.

 

Abuse of dominance by an enterprise is a violation under the Competition Act and the Commission has vast powers to curb such practices. These include slapping huge penalties and even asking the concerned entity to break itself into smaller groups.

 

A slew of factors, including an enterprise's market share, size and importance of competitors, extent of entry and exit barriers in the market, would be taken into consideration while deciding on cases pertaining to abuse of dominant position.