CCI imposes Rs. 54 crore fine on 3 airlines for unfair business practices

The Competition Commission of India (CCI) has imposed fine of more than Rs. 54 crore on Jet Airways, InterGlobe Aviation and SpiceJet for unfair business practices with respect to fixing fuel surcharge on cargo transport.
The CCI order comes on complaint filed by Express Industry Council of India (EICI) against airlines alleging cartelisation. It has directed three airlines to cease and desist from anti-competitive practices. It is second order on same complaint in nearly three years.

Key Facts

The penalties were imposed on airlines for concerted action in fixing and revising fuel surcharge (FSC), a component of freight charges. These airlines had acted in concerted manner in fixing and revising FSC rates in violation of competition norms that prohibit anti-competitive agreements, including cartels.
The penalties were imposed at the rate of 3% of three airlines average relevant turnover of last 3 financial years and taking into consideration financial position of airlines at relevant time and noting that FSC constitutes about 20-30% of cargo revenue.

Competition Commission of India (CCI)

CCI is quasi-judicial statutory body established under The Competition Act, 2002. It was established in October 2003 and became fully functional in May 2009. It consists of Chairperson and 6 Members appointed by Central Government.
CCI aims to eliminate practices that adversely affect competition in different industries and protect interests of consumers and ensure freedom of trade. Its mandate is to eliminate practices having adverse effect on competition, promote and sustain competition, protect interests of consumers and ensure freedom of trade in markets of India.
It is also required to give opinion on competition issues on reference received from statutory authority established under any law and undertakes competition advocacy, create public awareness and impart training on competition issues.

Month: Current Affairs - March, 2018