Top battery manufacturers face Rs 213 cr-fine for cartelization

New Delhi [India], Apr. 20 (ANI): The Competition Commission of India (CCI) on Thursday passed its final order imposing penalty on three leading Indian zinc-carbon dry cell battery manufacturers - Eveready Industries India Ltd. (Eveready), Indo National Ltd. (Nippo), and Panasonic Energy India Co. Ltd. (Panasonic) and their association for colluding to fix prices of zinc-carbon dry cell battery in India.

The CCI invoked the provisions of Section 46 of the Competition Act, 2002 read with the Competition Commission of India (lesser penalty) Regulations, 2009 to reduce the penalty imposed upon Panasonic, Eveready and Nippo by 100 percent, 30 percent and 20 percent, respectively.

The case against these battery manufacturers was taken up by CCI suo motu under Section 19 of the Act based on the disclosure by Panasonic under Section 46 of the Act read with the Lesser Penalty Regulations.

During the investigation, Directorate General (DG), in the exercise of the powers vested with it under Section 41(3) of the Act, carried out simultaneous search and seizure operations at the premises of Eveready, Nippo and Panasonic on 23 August 2016 and seized incriminating material and documents therefrom.

Subsequently, while the investigation was in progress and report from the DG was pending, Eveready and Nippo, approached the CCI as lesser penalty applicants.

From the evidence collected in the case, the CCI found that the three battery manufacturers, facilitated by the Association of Indian Dry Cell Manufacturers (AIDCM), had indulged in anticompetitive conduct of price coordination, limiting production/supply as well as market allocation in contravention of the provisions of Section 3(3)(a), 3(3)(b) and 3(3)(c) read with Section 3(1) of the Act.

It was observed that the conduct was continuing from 2008, which is prior to 20 May 2009, the date on which Section 3 of the Act became enforceable, and up till 23 August 2016, i.e. the date of search and seizure operations by the DG.

Considering contravention of provisions of the Act, Rs 245.07 crore, Rs 52.82 crore and Rs 74.68 crore were computed as the leviable penalty on three battery manufacturers i.e. Eveready, Nippo, and Panasonic, respectively, in terms of proviso to Section 27 (b) of the Act.

While computing the leviable penalty, the CCI took into consideration all relevant factors including duration of the cartel, industry conditions, among others and decided to levy penalty on the three battery manufacturers at the rate of 1.25 times of their profit for each year from 2009-10 to 2016-17.

Also, a penalty of Rs 1.85 lakh was levied on the AIDCM at the rate of 10 percent of the average of its receipts for preceding three years.

Additionally, considering the totality of facts and circumstances of the case, the penalty leviable on individual officials/office bearers of the three battery manufacturers and the AIDCM was computed at the rate of 10 percent of the average of their income for preceding three years.

Keeping in view the stage at which the lesser penalty application was filed, co-operation extended in conjunction with the value addition provided in establishing the existence of the cartel, the CCI granted Panasonic and its individuals 100 percent reduction in the penalty than was otherwise leviable.

Eveready and Nippo, along with their individuals, were granted 30 and 20 percent reduction in penalty respectively.

Pursuant to reduction, the penalty imposed on Eveready was Rs 171.55 crore and on Nippo was Rs 42.26 crore. No penalty was imposed on Panasonic. (ANI)

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