In a tender floated by ABC Bank for the supply and installation of new signages/replacement of existing signages for branches/offices/ATMs of ABC Bank located at specified metro centres of various circles of ABC Bank acr

The situation given is similar to the facts of the case Re: Alleged Anti-Competitive Conduct by various bidders in supply and installation of signages at specified locations of State Bank of India across India [CCI] suo motu case no. 02 of 2020 [decided on 03/02/2022] . Background of the Case: In that case, it was alleged that bid-rigging and cartelisation were done in a tender floated by SBI Infra Management Solutions Pvt. Ltd. ('SBIIMS') for the supply and installation of new signages/replacement of existing signages. From the facts on record, it appeared that certain bidders in the Impugned Tender were coordinating and fixing the prices of their services as well as allocating the market amongst themselves, with the object of distorting the fair bidding process. Investigation and Findings by CCI: Upon investigation, the Competition Commission of India (CCI) observed the following: Definition of 'Agreement': The definition of an 'agreement' in Section 2(b) of the Competition Act, 2002 , includes any arrangement or understanding or action in concert, whether or not formal or in writing or intended to be enforceable by legal proceedings. This definition is wide and covers tacit understandings. Evidence of Concerted Action: Direct evidence of concerted action is rare. CCI assesses evidence based on preponderance of probabilities. Since anti-competitive agreements are clandestine, evidence may be fragmentary or circumstantial. CCI often infers such practices from co-incidences and indicia. Conclusion: Based on a holistic assessment, CCI concluded that the opposite Parties had collectively entered into an agreement resulting in geographical market allocation as well as bid-rigging in the Impugned Tender. Decision: Cartelisation was upheld, and a penalty was imposed. Reasoning: Pernicious Form of Contravention: Cartelisation, including bid-rigging, is a pernicious form of competition law contravention. Parties must provide clear and cogent evidence to justify such conduct. Adverse Effect on Competition (AAEC): Collusion to fix prices by rigging bids has an adverse impact on the competitive price discovery process. Any manipulation in the competitive price discovery process affects the final price paid by the tendering authority. Rebuttal of Presumption: Parties can rebut the presumption of AAEC by demonstrating benefits to consumers, improvement in production/distribution, or promotion of technical/scientific/economic development (as per Section 19(3) of the Act). In the cited case, none of these were demonstrated. Application to ABC Bank Tender: In the given scenario, the acts of the tenderers coordinating, fixing prices, and allocating the market among themselves to distort the fair bidding process clearly fall under the definition of 'agreement' and constitute cartelisation and bid-rigging. These actions have an appreciable adverse effect on competition. Therefore, in view of the above decided case and the provisions of the Competition Act, 2002 (particularly Section 3 which prohibits anti-competitive agreements), the acts of the tenderers in the ABC Bank tender are violative of the provisions of the Competition Act, 2002.