New Delhi: The Competition Commission of India (CCI) has closed a case of alleged systemic manipulation of the public procurement process for furniture to favour a Godrej Enterprises Group entity, finding no prima-facie violation of antitrust rules.
Two complainants accused 15 public procuring entities of coming out with tender documents that had contained technical specifications, line drawings, and photographs that were exact replicas of Godrej & Boyce Mfg. Co’s proprietary product catalogue.
The manipulation had led to a “foreclosure of competition and denial of market access” to Godrej’s rivals, alleged informants Aditya Tripathi and Arun Gaur.
The 15 public procuring entities that faced the allegations were National Building Construction Corporation, HII Infra Tech Services, RITES, Public Works Department (Delhi), National Projects Construction Corporation, Airports Authority of India, National Thermal Power Corporation, Delhi Metro Rail Corporation, Life Insurance Corporation of India, Indian Oil Corporation, Hindustan Petroleum Corporation, Bharat Heavy Electrical, Bharat Petroleum Corporation, Water and Power Consultancy Services and Indian Institute of Technology (Delhi).
The informants cited some tender-related data and claimed the high win gap between Godrej and its rivals could not be explained by efficiency alone, and that it was inflating costs, thus harming public interest as well.
A four-member bench led by CCI chairperson Ravneet Kaur assessed the allegations relating to the abuse of market dominance and collusion, among other claims made.
In its order on Tuesday, the regulator noted the existence of multiple companies operating in the institutional furniture market, including Durian Furniture, Nilkamal, Featherlite, Wooden Street, Urban Ladder and Pepperfry. So, it refrained from examining the allegations of abuse of market dominance against Godrej further.
Firming up of technical specifications, eligibility criteria and procurement requirements, the CCI observed, fall primarily within the domain of procuring entities.
“Even if certain specifications correspond with products manufactured by OP-1 (Godrej), such circumstance, by itself, cannot give rise to an inference of collusion or anticompetitive conduct…,” it said.
The material placed also does not indicate the procurement decisions were the result of any anti-competitive arrangement involving the state-run entities and Godrej, the CCI added.
It also said a high win rate by itself cannot be regarded as evidence of collusion or bid rigging.
“No evidence has been placed on record showing coordinated bidding, bid rotation, exchange of commercially sensitive information or any other conduct indicative of collusion,” it said.
It also flagged inconsistencies and anomalies in the data cited by the complainants.
In view of the information provided and analysis made, the regulator didn’t find merit in the allegations that competition rules were violated in the tender case, as per the order.
