The Competition Commission of India (CCI) on 31 August, imposed penalties on 10 cement companies and their trade association -- Cement Manufacturers Association (CMA) for forming cartels in the cement industry.
The final order has been passed by CCI pursuant to the directions issued by Competition Appellate Tribunal remanding the matter back while setting aside the original order of CCI.
As per the CCI order, ACC cement is liable to pay Rs. 1147.59 crore, while ACL will have to pay Rs. 1163.91 crore.
Other companies which have been penalised are :
Binani cement - Rs. 167.32 crore
Century - Rs. 274.02 crore
India Cements - Rs. 187.48 crore
J K Cements - Rs. 128.54 crore
Lafarge - Rs. 490.01 crore
Ramco - Rs. 258.63 crore
UltraTech Cement - Rs. 1175.49 crore
Jaiprakash Associates Limited - Rs. 1323.60 crore
The penalities have been levied pursuant to the case filed by Builders Association of India under Section 19(1)(a) of the Competition Act, 2002, against the cement companies and CMA alleging contravention of the provisions of the Act.
While holding the cement companies and CMA in contravention of the Act, it was noted by CCI that the cement companies used the platform provided by CMA and shared details relating to prices, capacity utilisation, production and dispatch and thereby, restricted production and supplies in the market.
In addition, a penalty of Rs. 0.73 crore has also been imposed on CMA.
While imposing penalties, the Commission noted the action of the cement companies and CMA as being not only detrimental to the interests of consumers but also as detrimental to the whole economy, as cement is a critical input in construction and infrastructure industry.
The cement companies and CMA have been directed to cease and desist from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market. CMA has been further directed to disengage and disassociate itself from collecting wholesale and retail prices through member cement companies or otherwise. Also, CMA has been restrained from collecting and circulating the details relating to production and dispatch by cement companies.
While highlighting the role played by trade associations in promoting the interests of their members and the industry they serve, CCI noted in its order that cement companies were interacting using the platform made available by the trade association CMA.