In Brief
Suppliers of 14.2 kg LPG cylinders were accused by the CCI of bid rigging in an IOCL tender. The CCI and COMPAT found that identical or near-identical bids by 50 suppliers, meetings before bidding, a trade association, and shared agents evidenced cartel agreement. On appeal, the Supreme Court held that parallel pricing alone does not prove cartelization. In an oligopsonistic market (three buyers, particularly IOCL's 48% market share), with government-controlled pricing, IOCL's internal price estimates, and limited manufacturer margins for survival, identical bids reflect rational independent response to market conditions, not agreement. Since non-meeting attendees also quoted similar prices and IOCL's tender design gave it full pricing control, the CCI failed to exclude the possibility of independent action. The appeals were allowed and penalties set aside.
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