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Competition Commission draws first blood, hits Kingfisher with max fine of Rs 1 crore

The Competition Commission of India (CCI) has imposed a Rs 1 crore ($220,000) fine on Kingfisher Airlines for not providing sufficient information in the CCI’s investigation of the airline’s alliance with Jet Airways, according to the PTI.

“Kingfisher Airlines has not furnished certain information that the director general (investigations) had asked for while probing the case, so we have imposed a fine of Rs1 crore on Kingfisher for non-compliance,” a senior CCI official told PTI.

Kingfisher Airlines responded to PTI in a statement: “Pursuant to legal advice, the company withdrew the special leave petition filed in the Supreme Court and immediately thereafter and prior to the hearing of the show-cause notice, provided all information available with it to the CCI. In spite of this, the CCI imposed the said fine on the company. The company is obtaining legal advice.”

Under section 43 of the Competition Act 2002 if any person fails to comply with the CCI's powers to request information and in certain other cases, the CCI may levy a fine which may extend to Rs 1 lakh per day of such continuing failure up to a maximum of Rs 1 crore.

In September of this year the Bombay High Court had rejected a Kingfisher petition that the CCI did not have jurisdiction to examine the allegedly anti-competitive agreement between the two airlines since it was entered into in October 2008 before the CCI began operating with full powers in 2009.

Until this reported Kingfisher fine the CCI had not yet made any final orders or imposed any financial penalties on cartels or companies, although it has the power to levy fines of up to 10 per cent of turnover per year of infringement. However, the body has won a Supreme Court court victory in the SAIL v Jindal case to curtail its appellate tribunal’s jurisdiction and has passed a number of interim orders, with three going against alleged movie distributors’ cartels.

The first CCI cartel investigation was initiated by Luthra & Luthra in July 2009 against Bollywood film producers and distributors, as first reported by Legally India. That case was widely expected by competition lawyers to be the first in which the CCI may finish its first investigation.

Earlier this month the director general has found predatory pricing and a dominant position by the National Stock Exchange in the probe prompted by rival MCX Stock Exchange, according the Financial Express citing an unnamed official source. However, another source with knowledge of the case told Legally India that the director general's report could yet get rejected by the CCI.

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