CCI dismisses unfair practices complaint against 4 credit rating agencies

CCI dismissed a complaint alleging that Crisil, India Ratings, Care Ratings, and ICRA indulged in unfair business practices

The Competition Commission of India (CCI) on Tuesday dismissed a complaint alleging that CRISIL Ltd, India Ratings and Research Pvt Ltd, CARE Ratings Ltd and ICRA Ltd indulged in unfair business practices.

The ruling came on a complaint filed by Brickwork Ratings India Pvt Ltd.

The informant, Brickwork Ratings, alleged that the opposite parties -- CRISIL, India Ratings and Research, CARE Ratings and ICRA -- contravened the provisions of the Competition Act by means of collusive bidding and bid rigging, and also indulged in below cost predatory pricing.

Brickwork Ratings averred that the credit rating agencies are involved in anti-competitive practices in contravention of the provisions of the Competition Act which is causing an appreciable adverse effect on the competition in India as well as on the Indian economy, CCI said in an order.

Brickwork Ratings asked the the Commission to order "investigation into formation of cartel and collusive bidding by the opposite parties in the tender processes of various PSUs for the period 2009 till date."

It alleged that in a 2019-20 tender invited by the National Highways Authority of India (NHAI) to rate its upcoming Rs 75,000 crore bond issuances, the credit rating agencies cartelised and quoted identical/similar rates.

As per the informant, the quotes clearly showed price parallelism between the opposite parties.

Brickwork Ratings also gathered information regarding tenders floated by various other public sector undertakings (PSUs) and alleged that the quotes of opposite parties evidenced bid rigging amongst themselves, it said.

After taking into consideration the submission of various parties, the Commission said that there exists "no prima facie case" of contravention of the provisions of the Competition Act.

CCI noted that there are certain other allegations about the opposite parties indulging in mala fide and illegal conduct.

"In the opinion of the Commission, such allegations made by the informant are too broad and general in nature and do not raise any competition concern," CCI said.