In Brief
The Supreme Court allowed appeals by LPG cylinder manufacturers accused of bid rigging in an IOCL tender for 14.2 kg cylinders. The Competition Commission and COMPAT had found collusion and imposed penalties, relying on identical bids, a trade association meeting, and facilitating factors. The Court held that parallel identical pricing alone does not prove collusion; it may occur naturally in oligopsonistic markets with few buyers and regulatory price controls. The Court found IOCL exercised substantial control over pricing through internal estimates and post-bid negotiations, making independent agreement less plausible. The CCI failed to properly investigate IOCL's role and tendering process before concluding cartellisation. Absent direct evidence or circumstances that exclude independent action, parallel conduct in such markets does not establish a cartel. The Court emphasised that the Theory of Oligopolistic Interdependence applies, and the presumption under Section 3(3) must be rebutted with evidence assessing market realities holistically.
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