CCI Finds No Merit in Allegations of Abuse of Dominance Against Coal India Limited
Safiya Malik
The Competition Commission of India (CCI), in its detailed order dated December 30, 2024, dismissed allegations of abuse of dominant position against Coal India Limited (CIL) under Section 4 of the Competition Act, 2002. The case arose from claims by Bijay Poddar that CIL's 2022 e-auction scheme for coal contained allegedly unfair and one-sided terms. The scheme replaced the earlier Spot E-Auction Scheme of 2007.
The informant alleged that the 2022 scheme required bidders to clear pending dues before bidding, imposed fixed bid securities with discriminatory effects, and allowed unilateral cancellation of auctions by CIL. These provisions were argued to favor CIL disproportionately, lacking reciprocal obligations, and were claimed to contravene Section 4(2)(a)(i) and 4(2)(a)(ii) of the Competition Act.
CIL countered by denying dominance in the market, asserting that the relevant market should be the global market for non-coking coal, where domestic coal competes with imported alternatives. CIL argued that its market position was significantly constrained by government regulations, statutory obligations, and Presidential directives. The company also highlighted that the 2022 scheme addressed earlier concerns raised in the 2007 scheme and was revised periodically to ensure fairness.
The CCI determined the relevant market as the “production and sale of non-coking coal to bidders under e-auction scheme in India.” It rejected CIL's argument for a global market, emphasizing that the Competition Act confines such assessments to the Indian market. The CCI noted CIL’s dominance, citing its control over approximately 79% of India’s coal production and more than 90% of the e-auction market share. Despite this, the CCI found no evidence of abuse of dominance.
The Commission examined various clauses of the 2022 scheme and concluded that:
- Bid Security Requirements: The clause requiring bidders to clear pending dues before bidding was deemed standard and reasonable. The CCI found no unfairness in the stipulation of non-interest-bearing deposits as bid security.
- Process Fees: Administrative charges for participating in e-auctions were deemed essential for operational purposes and not abusive.
- Auction Notification Period: A seven-day notification period for e-auctions was considered reasonable, as buyers were familiar with the process and procedures.
- Transport and Delivery Mechanisms: Provisions regarding the mode of transport, clustering of dispatch points, and associated charges were found to align with operational requirements and did not exhibit anti-competitive behavior.
- Refund Policies: The Commission noted that bid securities were refunded for unsuccessful bids, and the absence of reciprocal penalties on the seller did not constitute a violation.
- Amendments in 2022 Scheme: CIL had introduced amendments addressing some of the informant’s concerns, such as penal provisions for sellers in case of failure to supply coal due to reasons attributable to CIL.
The Commission stated: “Based on the material on record, there appears to be no prima facie evidence of contravention of provisions of the Act warranting an investigation. Accordingly, the information is directed to be closed forthwith.”
Case Title: Bijay Poddar v. Coal India Limited
Case Number: Case No. 25 of 2023
Bench : Ms. Ravneet Kaur (Chairperson), Mr. Anil Agrawal (Member), Ms. Sweta Kakkad (Member), Mr. Deepak Anurag (Member)
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