CCI dismisses allegations of 'abuse of dominance' against Coal India

Fair trade regulator CCI has dismissed allegations of abuse of dominance against Coal India concerning its e-auction scheme introduced in December 2022, ruling that the state-owned company had not violated norms.

Coal India Ltd (CIL), a Maharatna public sector undertaking under the Ministry of Coal, is the single-largest coal producing company in the world.

"In view of the... facts and circumstances of the present matter, the commission is of the view that there is no prima-facie case of contravention of provisions of the act warranting an investigation into the matter," Competition Commission of India (CCI) said in a order on December 30.

 

The case, filed by a Kolkata-based individual, claimed that Coal India's 2022 e-auction scheme replaced its earlier spot e-auction scheme 2007 with terms allegedly unfair to buyers, the order said.

The individual argued that the scheme's conditions, such as requiring advance bid security and forfeitures without reciprocal obligations on CIL, violated Section 4 of the Act, which prohibits abuse of a dominant position, it added.

After a detailed investigation, CCI found that Coal India holds a significant market power in the production and sale of non-coking coal in India, and as per the 2022 scheme's clauses were reasonable and did not distort competition.

The CCI noted that CIL supplies about 70 per cent of India's coal, with about 90 per cent of the e-auction market share, and fulfils a critical role under government policies.

CCI also highlighted that the e-auction mechanism inherently requires security deposits to deter frivolous bids and ensure timely completion of transactions. Also, charges for transportation, handling, and loading were deemed justifiable given the substantial infrastructure involved.

Coal India, in its defence, emphasised that the firm is in compliance with directions from the Ministry of Coal and argued that the state-owned company operates within a framework constrained by government policies, the order stated.

The competition watchdog also agreed that these limitations restrict Coal India's commercial autonomy and do not translate into abusive behaviour.

In view of the same, no case of contravention of Section 4 of the Act is made out against Coal India, it noted.