Competition Commission of India (CCI) re-imposes penalty on 11 cement companies for cartelisation |

CCI by its order dated August 31, 2016 has re-imposed penalties on 11 cement manufacturers and Cement Manufacturers Association (CMA) for violation of Section 3(3)(a) and 3(3)(b) of the Act. The CCI had earlier imposed a penalty under Section 27 of the Act in the same case through its order dated 20 June 2012. However, the COMPAT set aside the CCI order on 11 December 2015 with the direction that the CCI shall hear the parties afresh and pass fresh order in accordance with law.

The Information, filed by the Builder Association of India alleged cartelization by cement manufacturers on account of increased prices of cement bags despite fall in production costs, reduction in capacity utilization, non-passing of reduced costs to customers by cement manufacturers.

Along the lines of the earlier order, the CCI has again concluded that the cement manufacturers violated Section 3(3)(a) and 3(3()(b) of the Act by acting in concert and fixing cement prices and limiting and controlling the production and supply in the market. The CCI imposed a penalty of 0.5 times the net profits for 2009-10 and 2010-11 in case of cement manufacturers and 10% of the total receipts for two years on CMA.

The earlier cement order was covered as a special feature in our Competition Law Bulletin Vol. IV No. 1 covering April- June 2012 and can be read here

(Source: CCI Order dated August 31, 2016. For full text see CCI website)

(i) COMPAT sets aside CCI’s penalty on Alkem Laboratories for indulging in anti-competitive practices-

(ii) CCI again fines Pharma Company for Anti-Competitive Activities

(iii) Bid-Rigging in Public Procurement: Some evolving trends in Indian Competition Law

(iv) Competition Appellate Tribunal (COMPAT) directs Competition Commission of India (CCI) to re-consider penalties imposed on LPG manufacturers

(v) COMPAT sets aside order against Cement Cartel

About the author

M M SHARMA

 Comdt. (Retd.) M. M. Sharma heads the Competition Law & Policy team in VA since 2009 and has over 30 years’ experience as an Advocate of Delhi High Court and holds a Post Graduate Diploma in Economics of Competition Law from Kings College, London. He has worked in the Competition Commission of India (CCI) as Additional Registrar during 2006-2008 and was responsible for drafting the Implementing Regulations under the Competition Act, 2002. He has experience of working as Head-Legal /In-house Counsel for a large Corporate Group in the Steel and Power sector before joining VA in 2009. He has represented clients as an independent arguing Counsel in landmark cases decided by CCI, the Competition Appellate Tribunal (COMPAT) , High Courts and the Supreme Court. As a prolific writer, he contributes articles and is regularly quoted on competition issues in National Newspapers and interviewed by TV Channels. He also teaches as a visiting faculty in various Universities and Institutions and is widely regarded as a subject expert in various Committees of Apex Business Chambers, such as FICCI, CII, ASSOCHAM and PHD CCI.  Mr. Sharma has been mentioned as a “Notable Practitioner” in the “Competition/Antitrust” category of Chambers & Partners (Asia Pacific) Ranking of Leading Lawyers for Business in India for the year 2012 and 2013. VA’s competition law and policy team has also been awarded the Law Firm of the Year Award for “Competition/Antitrust Law” for 2013 by the Indian Business Law Journal. Included as a ‘Recognised Practitioner’ in Individual Lawyers’ranking by Chamber’s Asia Pacific Guide 2020 for Antitrust/Competition Law.