Can enterprises be in violation of the Competition Act, 2002 (Competition Act) when prevailing market conditions are themselves not conducive to a competitive market?
This is an interesting question relating to enforcement of the Competition Act, which was dealt with by the Hon’ble Supreme Court of India (Supreme Court) in the case of Rajasthan Cylinders and Containers Ltd v Union of India & Anr.
The case arose from a tender floated by Indian Oil Corporation Ltd (IOCL) for the purchase of LPG cylinders. Curiously, it was not IOCL (the buyer) that had approached the Competition Commission of India (CCI) alleging contravention of the Competition Act. In fact, it was an LPG cylinder manufacturer that approached the CCI challenging the tender conditions imposed by IOCL. However, while the case against IOCL was closed, during the investigation of the aforesaid tender, the Director General (DG) noticed a similar pattern in a bid submission by LPG cylinder manufacturers. This chain of events led the CCI to initiate an inquiry, on its own motion, into the alleged cartelisation and bid-rigging by LPG cylinder manufacturers.