Major textile makers, including Grasim, Modi Polymer and Bombay Dyeing, have been dragged to the competition watchdog CCI for allegedly abusing their dominant market position by dictating prices and sale terms.
In a complaint to the Competition Commission of India (CCI), an individual has alleged that the 8-10 big polyester manufacturers collude together to dictate to smaller firms on what price they should sell their products.
It is also alleged that these big players even control the downstream chain by dictating who these smaller manufacturers should sell their products to, sources said.
"The complaint has been admitted under sections 3 and 4 of the Competition Act, 2002," a senior official told PTI, adding, "the Commission will consider the complaint sometimes this week."
Sections 3 and 4 of the Competition Act pertain to anti-competitive agreement and abuse of dominant position, respectively.
Meanwhile, an email sent to Bombay Dyeing remained unanswered, while Modi Polymer and Grasim Industries could not be reached for comments.
"The complainant has also alleged that the large manufacturers also influenced the time-to-time imposition of anti-dumping duties on the raw material so that they could control polyester in the domestic market," the official added.
The government imposes anti-dumping duty as a penalty on suspiciously low-priced imports to increase their price in the importing country and protect local industry from unfair competition.
The Commission, which became fully functional in 2009, with the appointment of a chairman and six members, has the power to check anti-competitive agreements and abuse of dominant position, drawn from Sections 3 and 4 of the Competition Act, 2002.
Beginning June 2011, the Commission also received powers to check high-voltage mergers and acquisitions, with the notification of section 5 and 6 of the Act.
