NEW DELHI, APR 19, 2018: THE Competition Commission of India (CCI) today passed an order imposing penalty on three leading battery-cell manufacturers, namely, Eveready Industries India Ltd. (Eveready), Indo National Ltd. (Nippo) and Panasonic Energy India Co. Ltd. (Panasonic) and their association AIDCM (Association of Indian Dry Cell Manufacturers). Such punitive measure was taken because of collusion by the three firms to fix prices of zinc-carbon dry cell battery in India. Such penalty was imposed u/s 46 of the Competition Act, 2002, read with the Competition Commission of India (Lesser Penalty) Regulations, 2009.

Moreover, the case against these battery manufacturers had been taken-up by the Commission, on suo motu basis u/s 19 of the Act based on the disclosure by Panasonic u/s 46 of the Act r/w the Lesser Penalty Regulations. During investigation, the DG (Investigation) carried-out simultaneous search and seizure operations at the premises of Eveready, Nippo and Panasonic on August 23, 2016 and seized incriminating material and documents therein. Subsequently, while the investigation was in progress and report from the DG was pending, Eveready and Nippo approached CCI for reduction of penalty. 

From the evidence collected in the case, the Commission found that the three battery manufacturers, facilitated by AIDCM, had indulged in anticompetitive conduct of price coordination, limiting production/ supply as well as market allocation in contravention of the provisions of Section 3(3)(a), 3(3)(b) and 3(3)(c) r/w Section 3(1) of the Act. It was observed that the conduct was continuing from 2008, which is prior to May 20, 2009, the date on which Section 3 of the Act became enforceable, and up till August 23, 2016.

Considering contravention of provisions of the Act, an amount of Rs 245.07 crore, Rs 52.82 crore and Rs 74.68 crore was computed as leviable penalty on three battery manufacturers i.e. Eveready, Nippo and Panasonic, respectively, in terms of proviso to Section 27 (b) of the Act. While computing leviable penalty, CCI took into consideration all relevant factors including duration of cartel, industry conditions, etc. and decided to levy penalty on the three battery manufacturers at the rate of 1.25 times of their profit for each year from 2009-10 to 2016-17. Also, penalty of Rs 1.85 Lakh was levied on AIDCM at the rate of 10 percent of average of its receipts for preceding three years. Additionally, considering totality of facts and circumstances of the case, penalty leviable on individual officials/ office bearers of the three battery manufacturers and AIDCM was computed at the rate of 10% of the average of their income for preceding three years.

Keeping in view the stage at which the lesser penalty application was filed, co-operation extended in conjunction with the value addition provided in establishing the existence of cartel, CCI granted Panasonic and its individuals 100% reduction in the penalty than was otherwise leviable. Eveready and Nippo, along with their individuals, were granted 30 and 20% reduction in penalty respectively. Pursuant to reduction, penalty imposed on Eveready was Rs. 171.55 crore and on Nippo was Rs. 42.26 crore . No penalty was imposed on Panasonic.