2024 (1) TMI 1384 - CCI - Law of Competition

Contravention of provisions of Section 4 of Competition Act 2002 - abuse of dominance by the Opposite Parties in the market for purchasing pollution dust from induction furnaces - HELD THAT - The Commission notes that the Informant has alleged abuse of dominance by the OPs in the market for purchase of pollution dust from the induction furnaces wherein OP- 1 in connivance with OP-2 is making undue profits by extracting zinc from the pollution dust procured from induction furnaces at low prices vis- -vis market rate of zinc. The Commission further observes that there has been entry of atleast two entities that purchase pollution dust. Further the bills/invoices provided alongwith the Information indicate that the procurement price of pollution dust has increased from Rs. 8 per kg to Rs. 25 per kg. Accordingly the Commission notes that in the facts and circumstances of the present case more players coming into the market and increase in procurement prices are indicative of greater competition - The Commission also notes that there is no specific allegation against OP-2 in respect of violation of provisions of Section 4 of the Act. The Commission is of the prima facie view that there is no competition concern arising in the present matter and therefore the matter be closed forthwith under Section 26(2) of the Act.

Summary

Issues:
Alleged abuse of dominance by the Opposite Parties in the market for purchasing pollution dust from induction furnaces.
Competition concerns regarding the procurement of pollution dust and pricing by the Opposite Parties.
Prayer for directions to authorities regarding the categorization of pollution dust and market pricing.
Allegations of abuse of dominant position by one of the Opposite Parties in contravention of Section 4 of the Competition Act, 2002.

Analysis:

The Informant filed an Information under Section 19(1)(a) of the Competition Act, 2002, alleging contravention of Section 4 by the Opposite Parties, Madhav KRG Ltd (OP-1) and Punjab Pollution Control Board (OP-2). OP-1 is engaged in extracting zinc from pollution dust, while OP-2 oversees environmental laws in Punjab. The Informant claimed that OP-1, as a dominant player, purchased pollution dust at low prices, profiting unfairly. The market value of pollution dust with zinc content was alleged to be higher than the prices offered to induction furnaces, indicating abuse of dominance.

The Informant requested the Commission to reclassify pollution dust from hazardous waste, determine prices through market forces, set trading limits, and take legal action against OP-1. The Commission, after reviewing the Information, noted the alleged abuse of dominance by OP-1 in collaboration with OP-2, resulting in undue profits from low-priced pollution dust. The entry of new entities and the price increase of pollution dust suggested increased competition in the market, indicating no immediate competition concerns as per Section 26(2) of the Act. There was no specific allegation against OP-2 for violating Section 4.

Consequently, the Commission concluded that there were no competition concerns in the matter and decided to close the case under Section 26(2) of the Act. The Secretary was directed to inform the decision to the Informant accordingly. The judgment highlighted the importance of competition dynamics in determining market behavior and the absence of evidence to support the allegations of abuse of dominance by the Opposite Parties.