India’s CCI investigates IATA cargo activities

In reviewing the provisions of the Competition Act 2002, the Air Cargo Agents Association of India (ACAAI) reasonably apprehended that many of the working procedures of the International Air Transport Association (IATA) which it says were forced upon the business of Air Cargo Agents in India might fall under the category of a cartel.


India’s CCI investigates IATA cargo activities


In reviewing the provisions of the Competition Act 2002, the Air Cargo Agents Association of India (ACAAI) reasonably apprehended that many of the working procedures of the International Air Transport Association (IATA) which it says were forced upon the business of Air Cargo Agents in India might fall under the category of a cartel.

ACAAI, therefore, wrote a letter to the Competition Commission of India (CCI) to examine the position and subsequently, ACAAI submitted a formal petition on 21 December 2012 with ‘Information’ in its possession. ACAAI’s petition inter alia, submitted that in the light of the provisions of the Competition Act 2002, the existing functioning and the modalities of IATA in India could amount to a complex phenomena of cartelization both on ‘micro’ and ‘macro’ economic level and hence, may be in violation of Section 3 and 4 of the Competition Act. ACAAI did not want to find itself in a situation where, for any reason, if IATA was found to be indulging in any anti-competitive practice in India, ACAAI would be construed as an unwitting collaborator acting in concert with such practices whether voluntarily, or otherwise.

ACAAI’s position is that the CCI must examine a number of activities including Unilaterally determining the polices that govern the Air Cargo Agents; prescribing the qualification and conditions for the accreditation and retention of Air Cargo Agents; acting in a self-acclaimed regulatory capacity; determining the commission (or its exclusion for example in recovering fuel surcharge on behalf of the airlines) payable to agents; determining norms for Air Cargo Agents, and institutionalising IATA in its various operational bureaucracy would all amount to macro-economic cartelization. It was further pointed out that determination of financial criteria, penalty for non-compliance, exclusion of fuel surcharge from payment of commission to agents as set out above etc, which prejudicially affect Air Cargo Agents, amount to micro-economic cartelization.