Anti-competitive practices in the AUTO SECTOR A DECADE IN REVIEW

“Cartels, leniency, abuse of dominance and more…”

The automobile and auto-components sectors are no strangers to antitrust laws. The automotive inputs sector has been investigated across the largest number of antitrust jurisdictions for the super-cartel 1 of this century. Over the last decade, various original equipment manufacturers (“OEMs”) and their suppliers have faced scrutiny in India and abroad.

One of the first cases investigated by the Competition Commission of India (“CCI”) after enactment of the Competition Act, 2002 (“Competition Act”) in May 2009, was the alleged tire-cartel 2 – a case transferred from the erstwhile Monopolies and Restrictive Trade Practices Commission. The case continues to intrigue as the majority membership of the CCI did not find a cartel despite a compelling set of indicia suggesting one. Since then, the CCI has scrutinized this industry for cartels, bid-rigging, anti-competitive agreements, abuse of dominance and large-scale mergers and acquisitions. Interestingly, the largest numbers of leniency orders of the CCI for any given sector have been in the auto-components sector. In this article we analyze the auto sector’s tryst with the CCI.

Cartels and leniency

It is common knowledge that cartels are hatched surreptitiously, and it is seldom that competition regulators find direct evidence of their existence. The competition law framework in India provides cartel participants an opportunity to reduce their penalty exposure in lieu of providing voluntary and valuable information regarding the existence of cartels. It is noteworthy that, three of the ten leniency orders of the CCI have been in the auto sector.