Tyre companies get eagerly awaited relief from the Madras High Court

The Madras High Court has permitted a probe into the anti-competitive activities of the tyre companies in question. However, CCI has been barred by the Madras High Court from taking any final decision.


Tyre companies in the country had been reeling under a few legal hassles and complications post their anti competitive activities and other problems. However, in a welcome move for the tyre industry at large, the Madras High Court has offered a major relief to these companies pertaining to ordering a probe into anti competitive activities of the same and barring CCI from taking a final decision.


The Madras High Court has definitely curbed CCI’s initiative to take action against the top five tyre manufacturers in India which collectively account for 90% of the entire market share. The Madras High Court has instead ordered an extensive probe which puts the issue in its jurisdiction while CCI has been barred from decision making in this context. This gives some much needed relief to these tyre behemoths who had been increasingly worried about punitive action from CCI which they deemed unfair without proper investigation and examination.


Justice M M Sundresh offered this reprieve to these companies on a writ petition that was filed by MRF on the 30th of October. The case was initiated by the Union Ministry of Corporate Affairs which stated that five domestic tyre manufacturers and their association, namely the Automotive Tyre Manufacturers Association or ATMA had increased tube and tyre prices on the basis of increases in raw material costs but not vice versa, i.e. reverse measures taken with drop in prices of raw materials.


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