Indian Supreme Court overrules Competition Commission LPG cartel decision

Indian Supreme Court overrules Competition Commission LPG cartel decision

India’s Supreme Court has reversed a decision of the Competition Commission of India (CCI) finding that suppliers of liquid petroleum gas engaged in a bid-rigging cartel where they submitted identical bids on tenders put out by state-owned company, Indian Oil.

The Supreme Court overruled a finding by the former Competition Appellate Tribunal which upheld the CCI’s decision, albeit reducing the fines (amounting to about EUR 25 million at the time of the CCI’s 2012 decision).

The Supreme Court stated that price parallelism is not sufficient to prove concerted action.  It was critical of the quality of the evidence put forward by the CCI, in particular its reliance on a meeting that only 19 members attended and where non-participants in the meeting also submitted the same bids.

Interestingly, the Supreme recognised that buyers and suppliers can influence pricing in a concentrated market such that price parallelism of itself provides insufficient evidence of collusion.

The CCI will need to pay close attention to other plus or minus factors in cases where it relies purely on economic evidence to prove a cartel.