All India Motor Transport Congress penalized for hike in truck freight rates across the country on account of increase in diesel price

Competition Commission of India (CCI): While imposing a penalty of Rs.14.24 lakh on All India Motor Transport Congress (AIMTC) for indulging in anti-competitive practices with respect to truck freight rates, CCI directed AIMTC to cease and desist from indulging in the act/ conduct which have been found to be in contravention of the provisions of the Competition Act. The verdict came upon an information filed by Indian Foundation of Transport Research and Training, in which it was alleged that AIMTC has uniformly increased the truck freight by 15% across the country on account of diesel price hike of Rs. 5/-per litre w.e.f. 14.09.2012 and such action by AIMTC is clear violation of the provisions of the Act and restricts the free and fair play of the market forces in the country. CCI ordered an investigation in the matter and after considering the evidences from both the parties, CCI noted, “AIMTC through its press releases/ media briefings/ telephone calls was instrumental in persuading its member associations to fix freight rates. It is also apparent that members associations were in touch with each other to discuss the issue of increase of freight rates and also directed their respective member to act accordingly. Such collusive and concerted practices distorted the market dynamics and led the truckers to increase the prices through the decisions of associations instead of pricing the services through the market forces of demand and supply.” While holding AIMTC guilty of anti-competitive practices, CCI observed that the activities of AIMTC are in conflict with the objects of the competition law as they have cascading and inflationary impact upon the goods and services consumed by common man. CCI imposed penalty upon AIMTC and also directed it to seize and desist from indulging in practices found to be anticompetitive in terms of the provisions of the Act and in particular to refrain from issuing any announcements/ directions/ circulars etc. to its members which may contravene the provisions of the Act. (Indian Foundation of Transport Research and Training v. All India Motor Transport Congress, 2015 CCI 2, decided on February 16, 2015).