CCI slaps Rs 14.24 lakh penalty on road transporters grouping

The Competition Commission today slapped a fine of Rs 14.24 lakh on All India Motor Transport Congress (AIMTC) and asked the grouping to "cease and desist" from indulging in anti-competitive practices with respect to truck freight rates.
The ruling comes after a detailed probe by the fair trade regulator found that AIMTC, an apex body of road transporters, had uniformly hiked the truck freight rates across the country on account of diesel price hike in 2012.
The association has been penalised for indulging in unfair business practices and also not being able to "explain as to how the said conduct did not foreclose competition".

"...AIMTC through its impugned action has tried to determine the price of freight rates and, as such, such action squarely fell within the presumption raised in...The (Competition) Act," the Competition Commission of India said in an order dated February 16 but released today.
According to the regulator, the members of AIMTC had entered into an anti-competitive agreement to fix prices in respect of freight rates charged by individual truckers.
"Such collusive and concerted practices distorted the market dynamics and led the truckers to increase the prices through the decisions of associations instead of pricing the services through the market forces of demand and supply," CCI noted in the order.

Accordingly, the regulator has imposed a penalty of Rs 14.24 lakh on AIMTC.

It has also directed the body "to cease and desist from indulging in the act/conduct which have been found to be in contravention of the provisions of the Act in this order and in particular it is directed to refrain from issuing any announcements/ directions/ circulars etc to its members which may contravene the provisions of the Act".
The case relates to a complaint filed by Indian Foundation of Transport Research and Training that had alleged that AIMTC has uniformly increased the truck freight by 15 per cent across the country on account of diesel price hike of Rs 5 per litre from September 14, 2012.

Further, it was alleged that AIMTC has a track record of instructing its constituents to jack up freight charges on account of increase in input costs such as diesel price.
A cease and desist order was passed by the erstwhile MRTP Commission on August 31, 2006 whereby AIMTC was directed to restrain from such restrictive practices.