TaxTMI 
TaxTMI 
2013 (4) TMI 441
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....in the iron ore production market in India. 3. For evaluating the contention of the informant regarding contravention of section 4 of the Act, the relevant market is to be considered as per section 2(r) read with section 19(5) of the Act. The relevant market comprises of relevant product market and relevant geographic market. As per the informant, the iron ore market can be divided broadly into two product markets (i) low grade iron ore (less than 60% ferrous content) and (ii) medium to high grade iron ore (more than 60% ferrous content). The informant stated that since low grade iron ore having less than 60% Fe was unsuitable for use as input by steel manufacturers of India, the low grade iron ore would not form part of the relevant marke....
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....n the relevant market proposed by the informant, increased to 43.61% out of the total 61.7 million tons sold by merchant miners to steel producers in India in 2011-12. On the basis of this data, the informant alleged that OP 1 was in a dominant position in the market for non-captive iron ore production in India (except Goa) which resulted into abusive practices being adopted by OP 1, including the following: (a) Imposition of unfair pricing amounting to contravention of section 4(2)(a)(i) of the Act. It alleged that even when the cost of production of iron ore remained static between Rs. 200-300 per MT, OP 1's sale price ranged between Rs.3200 to 8000 per MT resulting in a very high profit margin of 85%. (b) Discriminatory pricing between....
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.... Iron ore suitable to sponge iron manufactures was negligible and OP 1 could not be called as a dominant supplier abusing its position. 5. The Commission considered the facts and data placed on record by both sides and is of the view that the relevant market definition proposed by the informant cannot be accepted. The informant has inflated the market share of OP 1 by excluding captive iron ore production, low grade iron ore having less than 60% Fe content and exports from the relevant market definition. The submission of the informant that low grade iron ore having less than 60% Fe was unsuitable to be used as input by steel manufacturers is not acceptable as the low grade iron ore is utilized by manufacturers incurring some additional co....
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....n in conjunction with the other factors to assess the dominance of an enterprise. 7. During the submissions made at the Commission, OP 1 highlighted that the Supreme Court has dealt with its pricing policy decisions and has categorically passed an order stating that the fixation of basic price by OP 1 was transparent and could not be interfered with. Also, the Supreme Court left this issue to the Central Empowered Committee to have discussions with OP 1, if they desire any change thereof. However, even the Central Empowered Committee, after discussions with OP 1, agreed that the pricing mechanism of OP 1 in fixing of basic price need not be interfered with. Besides, based on the changes in Government policy and iron ore trade dynamics, OP ....
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.... existing long term contracts. Thus, OP 1 was producing iron ore in the State of Karnataka under the orders of the Supreme Court, but, neither it was selling nor fixing the sale price of iron ore in the State of Karnataka. Thus, all the actions of OP 1 in so far as it pertained to State of Karnataka were in compliance of the orders of the Supreme Court. 9. With regard to section 3 of the Act, the informant stated that OP1 (in its board meeting held on 16.04.2012) decided that Joint Plant Committee (JPC) would be collecting and furnishing price data to OP 1 so as to enable it to have a long term pricing methodology. This, along with existence of price parallelism resulted in a collusion under section 3 (3)(a) of the Act. Further, the inform....