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FedEx, UPS, DHL executives to face fresh scrutiny in India's antitrust case
Allowing a complainant to interrogate companies is not common in Indian antitrust cases. It means the final findings of the antitrust investigation could change and create new challenges for the courier majors, and the case will be prolonged by several months, antitrust lawyers and government sources said.
Many foreign and domestic companies are bullish about the Indian courier and parcel delivery market, which is expected to grow 11 per cent a year to $14.3 billion by 2030, bolstered by a boom in online shopping, research firm Mordor Intelligence says.
In December, Reuters reported the Competition Commission of India (CCI) found "no evidence" of courier firms sharing commercial information amongst themselves. The 2022 cartel case, whose details remain confidential in line with rules, was triggered when the Federation of Indian Publishers alleged collusion on prices and discounts by delivery firms.
The CCI has now found merit in a complaint by the publishers' group which argued it must be allowed to cross-examine the delivery company executives as investigators only relied on oral submissions to give the companies a clean chit.
The federation "has demonstrated sufficient cause establishing necessity and expediency of conducting such cross-examination," the CCI noted in a May 28 internal order that was reviewed by Reuters.
The order said the executives to be questioned were Subhasish Chakraborty, Managing Director of India's DTDC Express; R.S. Subramanian, Managing Director of DHL Express India; Suvendu Choudhury, a vice president of FedEx in India; Percy Avari, general manager of Aramex in India, and Abbas Panju, India managing director of UPS Express.
None of the executives responded to requests for comment.
DHL said in a statement it operates in full compliance with all laws and is "cooperating fully with the CCI", but could not comment on specifics.
The CCI, as well as other companies - DTDC, U.S.-based FedEx and UPS, and Dubai's Aramex did not respond to Reuters queries.
The Federation of Indian Publishers also did not respond. It represents many Indian publishers like S.Chand and Rupa Publications, as well as some foreign groups like Pan Macmillan.
'RARE' CROSS-EXAMINATION
Sending the case back to the CCI investigators could become an irritant for the logistics industry, which has faced scrutiny since 2015, when France levied a $735 million fine on 20 companies, including FedEx and DHL, for secretly colluding to increase prices.
In India, cross-examination of companies by the complainant "is rare," said Gautam Shahi, a competition law partner at Indian law firm Dua Associates.
"Such cross-examination may reveal new facts and the conclusions of the earlier investigation report may come into question. It may change the direction of the case," he said.
The CCI investigations unit will now oversee the cross-examination proceedings in coming weeks and submit a report to top antitrust officials for a review, four sources familiar with the matter said.
The Federation of Indian Publishers had alleged that courier companies acted together to determine charges, and also did not reduce the fuel surcharge they charged when jet fuel prices dropped.
The 202-page investigation report shared with the companies privately last year, and seen by Reuters this week, notes that 36 notices were sent to 15 courier firms during 2023-24 to gather details of their businesses, with UPS submitting the most responses - 13.
The CCI report concludes no email correspondence surfaced that showed "any collusive/concerted activities" among rivals.
The Federation of Indian Publishers has also successfully argued it wants to point out several anomalies in the earlier recorded statements of company executives, which were ignored by investigators, noted the CCI order that allowed the cross-examination.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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