Competition Commission of India
All Odisha Steel Federation vs Orissa Mining Corporation on 18 June, 2012
$G§'&PET§T§GN $Q¥s«?§§'%flESS§QN Q?' SNQLEK Cage Re. "£ 352$? 2 _§~?~.__g__§_.2§'§2 N3 Odisha Steei Federflon Enfarmarsi V. Grissa Mining Carparaiian €3§=pa5i%:e Party QRQER LWQER SESTEQE 2&2} CF Ti-SE {3QMPET§T§{QN ACT. 2§§2 *3. The infarmatimn has been fiiefi under aeciien 39(1) sf the Eiampetitian Act, 2032: {'me As?) by ME {Misha Sites? Federation ('the irzfcrmantfi, an assaéiatian {if manufacturers cf mag? and refiaied industries in the State of Qciisha, against the Qrissa ¥\;§§n'ing Cmparafisn Lid. ('appasite party'), a Gmzernment Q1? Grissa undertaking far afiegefi cantraveméun of section 4 0*? the Act it 'is submitted that iron are $3 an impartant naturai reseume mainiy used in the manufacture 9'? $2963 and is avaiiabie in abundancca in me Staie of {Misha c«::3mpare§ in anther States where it is faund scarcefiy.
2. According to {he infmmant, the appcssitea garty was abusing its duminam pasiiicm by fixing arbitrary and unieasanabie price as' Eran are. it is c:on%em3ed that uptm the year 2D{}9\,_¢,..ia;a,¢?0;3;1esite party was empanetiing buyers: far supmy Uf Eran 2 \ 2' 3 L . .,.,.,_~~ / F. Page 1 of 5 were assured of reguiar aiiaiiefilqucsia cf iron are based on iheir praduciion anal seziiing capacity even if they did rim: participate in the iericier floaters} by the eppasiie party far determining the priaes :33' the era. Post 2089, the oppasiie party changed its method arm ssimgzipeé empaneiiing buyers. *
3. it was, further conienéed that the appcsiie party tendered a smaii quantity of imn are thrmigh Pfrice Setting Tender (PiS"i") and '£§"i€% highest price Quilifid by some bidder was accepted as Hi and ii':
ireaiied as the benchmark prise. This made if price fixing, the infcirnmni, was unfair since Gniy 3 smaii q£;.;ar':iity,i mi 3 same was accerding it:
i"8§3§'8$E£"i'§§¥'ig the tatai cgziarteriy graduation 03' ircm era? was kept ins" saia and the campanies were aiiczwaé to participate in the tender pmcess regsiriiieiss Qf their capacity, size 9:' past iifizing recmd. in the said process, in cirder ta Quiabiid others, Emma campanies wmiid quote unreasanabie gricea which iater becmmss the iisieci prise and the entire industry is farmed is accapiit the said rates. Whiie daing that mesa cemigianies, acimetimets dc: mt even iifi: the manage sf imn are fair' which may successfuiiy bid ihritmgh an simian.
4.. The infmmani further submitted that ciause 9 Q? PST prsvided a discreiimn ta the nianaigiemieni is either assay: {ha quoted mice oi' fix suiizabie price considgring the iniarket sisenarie. This eveniuaiiy frustrated the entire exercise of caiiing ienderg in an amen auctian. instance af unfair practice being adopted by the cppasiiie party were highiiighiaad by the infcrmani wherein the oppzzzaiia party aiiegediy suffered '$5,830 MT Eran are far saaie 'i§"£i"0£.ig§'i PST during the fiiai quarter of 233142, but cmce the H1 bid 'in; " § the said afier, tha s' 'x X Page 2 0+5 .=:
same wee taken irate eerzeieeratien te eeii the tetai queritityieritire eutpirt of 4,t32,5()t} ivi"i" at iron are
5. it was etated that few srrrait manufacturers wine titted the iron ere by quoting abnermeiiy high erieee, being Ht in the terreer, were rrreetiy ieeated outside the State at Qrieea where the pewer taritffwater sees and other taxes were eutzetantiaiiy iawer in their areas due to the ineerttivee being pretrided by their respecttive State Gexrerrrmente. Therefore, the eepeaite ,party was net right in eettirtg the benchmark price qtietea icy these errteii manufacturers in eeii the entire irert ere at higher rates. 'The members at the iriterrriarit aeeeeiatiari had titted eniy 31% at the tetai quantity during the third quarter of 26%-'12 because er the abeve arbitrary practice of the eppieeite party'
8. Thee main grievance art the interment was that the eepeeite party, err wiiem the members of interrraerrt eeiaeciatien reiied heairiiy fer iron ore, wee eeiiirrg it at whireeicai arises witheet teiiewirig the flue ereeedure. The irtterraatierr eiiegea eerttraverriiert er' eeetien at et the Act which prohibited abusive eertdtiet at an enterprise er greets, in a sziemirtartt position.
7'. The Cemmieeieri irtvitea the interment and eppeeite party ter praiirniriary eerriereriee. in the preiimirrary eerrierence, the aatrierizee representative at the eppeeite aerty appeared and derriee the aiiegetierie ei eantreverttierr :3'? any substantive previeiene et the Act, it was feather euerrtitteci that the market share at eppeeite party was ertiy 9.52% er? the tetai treciaeie eaantityk'.A§t\\'ae\r:reetie eaie ef iron ere which cannot be cerieicieraa ta i1aive'_a§y E15?' maritet. Ly '.11.
\ V. » '\ \ '\ Page i
8. The re§evar°:t market as defined Eh secttczeh Eh') at the Act cshsists at rhtevant product market and retevant gehgraphth rrrart<et_ The retevaht product market in tha present case is 'sate at trhh ore' and the retaxraht product market t5 the 'State at Qdtsha'. Uehrrtighutedty, the rrrarttet share hetd by the apposite party was sthatt in thh reiavaht market 59 it cannot be chhaidered to be a dorrrirrant ptayer.
9 th hrdet to attract prtwistcrns at the sahtthh 4 at the Act, the dhrrrihaht position of the ehterprisa needs tr} he hash under ezrhtahatirah {a} ta section 4 at the hat. Borrrirrant prtstttoh th exhtahhtihh ta) ta sectthh 4 at the Act inter alia means ehteyihg hoatttah at strehgth in the retetraht market tn thdta enataithg the enterprise to operate thdepehderrt at the ccrmhattttve thrces pretratttrrg tr': the retevant market hr attest its chmpetiters hr consumers Qt' the retevaht market th its taveur. The market share at the Q§'3§30$§'€a& party th the p§'€S&E'tt case hating a rrrthtsrzute 9.52%, the thtctrrhahts can hhtain tt'0t't are tram rrther mahutacturersimihers. The market ts tragrrterttaearrt and marry other htayers are present wha (tan cater tr: the requirements at the members at the thfhrrrtaht asscrctattnh. 'thts is also rztear '§t"£Ztt't't the atrrarrrteht matte by ihthrmaht in appttriatiran under sectthh '£9 at the Act that it titted orrty 31% at the thtat quantity httered rtrtrihg the third quarter at Efitt-t2 as the price fixed by the hpphsita party was higher. Therethre, tha dhmihaht pasttthrr at the hpphsita party tr: the retevarrt market E3 hat made out under aerxtthh at at the Act.
it). tr: the tight at tha ahhvh tarsts and situatihrr, we find that ha prima facie case was master. Qutffia-git?
,.- 'ix tihthe apposite ;3ar't:y tar \\ _.}=;;5\tt. is a fit case for «.
,..
V » .
» » \' ., .
. _ .3 _, {Q {3} ~ '__'_V_..-.ww... ._'\\\ "'\'-M"-....«-~""
Page 5 of E Secwetary is; Ciit'€-3C.t€€§ inform aii concerned ta: acccsrdingiy. cE<::>sure under saction 26(2) of the Act and is hereby c%c)2.:e~:d. It is mrxjared acmrdirsgév.