CCI dismisses cartelization allegations against 5 parties for spreading false market rumors under Section 3

CCI dismissed allegations against 5 parties for spreading false market rumors about price changes through rate cards. The Commission found no prima facie case for joint/collective dominance under Section 4, noting the Act doesn't provide for such inquiries. Regarding Section 3 violations, evidence including FIR and newspaper articles failed to establish cartelization. CCI concluded that alleged false rumors weren't result of or leading to cartelization given multiple market participants and daily price negotiations. Information closed under Section 26(2) with relief under Section 33 rejected.

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Issues:
Alleged violation of Sections 3 and 4 of the Competition Act, 2002 by the Opposite Parties based on spreading false rumors and manipulating pricing in the market.

Detailed Analysis:

1. Allegations and Background:
The Information was filed under Section 19(1)(a) of the Competition Act, 2002, alleging contravention of Sections 3 and 4 by the Opposite Parties (OPs). The Informant, representing Ship Recycling Industries Association (SRIA), accused the OPs of acting as intermediaries manipulating pricing through false rumors, adversely affecting sellers and customers.

2. Role of Informant and SRIA:
The Informant, a Senior Executive Secretary of SRIA, highlighted that SRIA members are engaged in supplying ship recycling materials, primarily dealing in commodities like scrap iron and rolling plates. The pricing of these commodities was determined by sellers without the involvement of intermediaries.

3. Alleged Activities of the OPs:
The OPs, based in Gujarat and Punjab, were accused of spreading false rumors through WhatsApp groups, causing speculation in commodity prices. This led to frequent price adjustments over two years, impacting the pricing system and compelling SRIA members to sell at lower prices.

4. Additional Information Submitted:
The Informant submitted further details, including the OPs acting as illegal intermediaries manipulating pricing, creating a dominant position, and influencing buyers. Invoices were provided to show the impact on pricing due to the OPs' involvement, emphasizing that SRIA had no role in price determination.

5. Commission's Decision:
After considering the evidence and submissions, the Commission noted the allegations against the OPs for spreading false rumors and forming WhatsApp groups to lower prices. However, the Commission found no evidence of cartelization or collective dominance by the OPs, leading to the closure of the case under Section 26(2) of the Act.

6. Conclusion and Relief Sought:
The Commission concluded that there was no prima facie case for contravention under Section 4 or violation of Section 3. As a result, the relief sought by the Informant under Section 33 was rejected, and the Information was directed to be closed. The Secretary was instructed to communicate this decision to the Informant accordingly.

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