[The following post is contributed by Karan S. Chandhiok, a
senior associate with the competition law team at Luthra & Luthra Law
Offices and a Member Executive of the Competition Law Bar Assocation. He
graduated from Amity Law School in 2006 and did his BCL from Oxford in 2007.
senior associate with the competition law team at Luthra & Luthra Law
Offices and a Member Executive of the Competition Law Bar Assocation. He
graduated from Amity Law School in 2006 and did his BCL from Oxford in 2007.
The views are personal, and he may be
contacted at [email protected]
contacted at [email protected]
We hope to carry further comments and analyses on the order in due course]
Builders’ Association of
India v. Cement Manufacturers’ Association &
Ors.
India v. Cement Manufacturers’ Association &
Ors.
The CCI, through its order
dated 20 June 2012, imposed a penalty of approximately six thousand crores (approx. USD 1.1 billion) on cement
manufacturers in India after holding them guilty of cartelisation in the cement
industry. The penalty has been imposed at the rate of 0.5 times the net profit
of such manufactures for the past two years. Additionally, the Cement
Manufacturer’s Association (the CMA)
has been fined 10% of its total receipts for the past two years for its role as
the platform from which the cartel activity took place.
dated 20 June 2012, imposed a penalty of approximately six thousand crores (approx. USD 1.1 billion) on cement
manufacturers in India after holding them guilty of cartelisation in the cement
industry. The penalty has been imposed at the rate of 0.5 times the net profit
of such manufactures for the past two years. Additionally, the Cement
Manufacturer’s Association (the CMA)
has been fined 10% of its total receipts for the past two years for its role as
the platform from which the cartel activity took place.
The scope of this post is restricted
the findings of the CCI, and a more detailed analysis will follow in due
course.
the findings of the CCI, and a more detailed analysis will follow in due
course.
Brief facts
The decision of the CCI emanates from information
filed by the Builders’ Association of India on 26 July 2010 against the CMA and
ACC, Gujarat Ambuja Cements Limited (now Ambuja Cements Limited), Ultratech
Cements, Grasim Cements (now merged with Ultratech Cements), JK Cements, India
Cements, Madras Cements, Century Textiles & Industries Limited, Binani
Cements, Lafarge India and Jaiprakash Associates Limited.
filed by the Builders’ Association of India on 26 July 2010 against the CMA and
ACC, Gujarat Ambuja Cements Limited (now Ambuja Cements Limited), Ultratech
Cements, Grasim Cements (now merged with Ultratech Cements), JK Cements, India
Cements, Madras Cements, Century Textiles & Industries Limited, Binani
Cements, Lafarge India and Jaiprakash Associates Limited.
On 15 September 2010, the CCI formed a
prima facie opinion on the
contravention of the Competition Act, 2002 (the Competition Act) and directed investigations in the matter. On 31
May 2011, the Director General (DG)
submitted his report (the Report)
detailing contravention of the Competition Act by the respondents.
prima facie opinion on the
contravention of the Competition Act, 2002 (the Competition Act) and directed investigations in the matter. On 31
May 2011, the Director General (DG)
submitted his report (the Report)
detailing contravention of the Competition Act by the respondents.
The CCI called for comments and
objections from the respondents, and after considering their submissions came
to the conclusion that the respondents had contravened sections 3(3) (a) and
(b) of the Competition Act.
objections from the respondents, and after considering their submissions came
to the conclusion that the respondents had contravened sections 3(3) (a) and
(b) of the Competition Act.
Before going to the principal findings
of the CCI, it is important to note that the CCI restricted itself to the
cement companies named in the information owing to the fact that such companies
were the prominent participants in the market and were key players in the whole
arrangement.
of the CCI, it is important to note that the CCI restricted itself to the
cement companies named in the information owing to the fact that such companies
were the prominent participants in the market and were key players in the whole
arrangement.
Similarly, as to the period of
contravention, the CCI limited the period from 20 May 2009 to 31 March 2011.
However, it made clear that this limitation was only relevant to the present
case and would be independent of other cases.
contravention, the CCI limited the period from 20 May 2009 to 31 March 2011.
However, it made clear that this limitation was only relevant to the present
case and would be independent of other cases.
Preliminary Issues
Jurisdiction: The respondents had raised concern over the DG’s investigation and
reliance on data prior to 20 May 2009 (the date on which the provisions of
Section 3 of the Competition Act were brought into force). The CCI held that
mere examination of data prior to 20 May 2009 cannot be construed to mean that
the provisions of the Competition Act have been applied retrospectively.
Moreover, relying on the Bombay High Court decision in Kingfisher Airlines v CCI,
the CCI took the view that if the effects of acts taken place prior to 20 May
2009 were continuing, it had the jurisdiction to examine such conduct.
reliance on data prior to 20 May 2009 (the date on which the provisions of
Section 3 of the Competition Act were brought into force). The CCI held that
mere examination of data prior to 20 May 2009 cannot be construed to mean that
the provisions of the Competition Act have been applied retrospectively.
Moreover, relying on the Bombay High Court decision in Kingfisher Airlines v CCI,
the CCI took the view that if the effects of acts taken place prior to 20 May
2009 were continuing, it had the jurisdiction to examine such conduct.
Failure
to provide opportunity to cross examination: The
respondents contented that the DG did not give them an opportunity to cross
examine witnesses relied upon by him. The CCI rejected this submission and
stated that by giving the respondents the chance to submit oral and written
evidence before it, the proceedings were in accordance with the principles of
natural justice.
to provide opportunity to cross examination: The
respondents contented that the DG did not give them an opportunity to cross
examine witnesses relied upon by him. The CCI rejected this submission and
stated that by giving the respondents the chance to submit oral and written
evidence before it, the proceedings were in accordance with the principles of
natural justice.
Incorrect
reliance on motivated information and press reports:
The respondents stated that the information filed by the Builders’ Association
was motivated. This, again, was rejected by the CCI. It held that under the
scheme of the Competition Act, the final outcome was to be determined on the
basis of an inquiry after going into the questions whether competition forces
were being inhibited due to certain anti-competitive behaviour.
reliance on motivated information and press reports:
The respondents stated that the information filed by the Builders’ Association
was motivated. This, again, was rejected by the CCI. It held that under the
scheme of the Competition Act, the final outcome was to be determined on the
basis of an inquiry after going into the questions whether competition forces
were being inhibited due to certain anti-competitive behaviour.
Substantive Issues
The substantive question before the
CCI was whether the conduct of the cement companies violated sections 3
(anti-competitive agreements) (discussed below). The CCI also examined whether
there was an abuse of dominant position, but found that the market was
characterised by several players and no single firm or group was in a position
to operate independent of competitive forces or affect its competitors or
consumers in its favour (cf. explanation (a) to section 4 of the
Competition Act).
CCI was whether the conduct of the cement companies violated sections 3
(anti-competitive agreements) (discussed below). The CCI also examined whether
there was an abuse of dominant position, but found that the market was
characterised by several players and no single firm or group was in a position
to operate independent of competitive forces or affect its competitors or
consumers in its favour (cf. explanation (a) to section 4 of the
Competition Act).
In respect of violations of sections
3(1) (a) and (b), the CCI examined the following facts and submissions:
3(1) (a) and (b), the CCI examined the following facts and submissions:
Market
Structure of the Cement Industry: As previously
stated, the CCI observed that no player can be said to be dominant in India as
per the prevailing market structure. The industry is characterised by twelve
cement companies having about 75% of the total capacity in India with about 21
companies controlling about 90% market share in terms of capacity. Given the
oligopolistic nature of the market, each company takes into account the likely
reactions of other companies while making decisions particularly as regards
prices. In such a scenario, collusion between companies is possible and can be
adduced from circumstantial evidence.
Structure of the Cement Industry: As previously
stated, the CCI observed that no player can be said to be dominant in India as
per the prevailing market structure. The industry is characterised by twelve
cement companies having about 75% of the total capacity in India with about 21
companies controlling about 90% market share in terms of capacity. Given the
oligopolistic nature of the market, each company takes into account the likely
reactions of other companies while making decisions particularly as regards
prices. In such a scenario, collusion between companies is possible and can be
adduced from circumstantial evidence.
Circumstantial
evidence is sufficient to prove violation: The
chief objection taken by the cement companies was that the DG failed to support
his findings with any direct evidence. The CCI, relying on international
practice, noted that given the clandestine nature of cartels, circumstantial
evidence is of no less value than direct evidence to prove cartelisation.
evidence is sufficient to prove violation: The
chief objection taken by the cement companies was that the DG failed to support
his findings with any direct evidence. The CCI, relying on international
practice, noted that given the clandestine nature of cartels, circumstantial
evidence is of no less value than direct evidence to prove cartelisation.
Section
3 does not require a delineation of relevant market:
The CCI has held that for an inquiry under section 3 of the Competition Act,
there is no requirement under the Competition Act to determine a ‘relevant
market’. The Commission states that there is a distinction between ‘market’ as
used in section 3 and the ‘relevant market’ as defined in section 4 of the
Competition Act.
3 does not require a delineation of relevant market:
The CCI has held that for an inquiry under section 3 of the Competition Act,
there is no requirement under the Competition Act to determine a ‘relevant
market’. The Commission states that there is a distinction between ‘market’ as
used in section 3 and the ‘relevant market’ as defined in section 4 of the
Competition Act.
CMA
is engaged in collecting competition sensitive data:
The respondents contended that CMA collects retail and wholesale prices data
from different parts of the country and transmits them to the Ministry of
Commerce, as per the latter’s request. The CCI held that the competitors were
interacting using the platform of the CMA and this gave them an opportunity to
determine and fix prices. The fact that it was being under the instruction of
DIPP did not absolve them of liability.
is engaged in collecting competition sensitive data:
The respondents contended that CMA collects retail and wholesale prices data
from different parts of the country and transmits them to the Ministry of
Commerce, as per the latter’s request. The CCI held that the competitors were
interacting using the platform of the CMA and this gave them an opportunity to
determine and fix prices. The fact that it was being under the instruction of
DIPP did not absolve them of liability.
Further, the CCI noted that the CMA
publishes statistics on production and dispatch of each company (factory wise)
and circulates such information amongst its members. The sharing of price,
production and dispatch data makes co-ordination easier amongst the cement
companies.
publishes statistics on production and dispatch of each company (factory wise)
and circulates such information amongst its members. The sharing of price,
production and dispatch data makes co-ordination easier amongst the cement
companies.
High
Power Committee Meetings: The CCI took note of the
fact that cement prices increased immediately after the High Power Committee
Meetings of the CMA which were attended by the cement companies in January and
February 2011. It further noted that ACC and ACL, despite having ceased to be members
of the CMA, attended these meetings. The CCI observed that whilst ACC and ACL
admitted to having attended these meetings, both CMA and JAL refuted their
presence. The inconsistencies in the statements of the different respondents
established that they were keen on hiding material information.
Power Committee Meetings: The CCI took note of the
fact that cement prices increased immediately after the High Power Committee
Meetings of the CMA which were attended by the cement companies in January and
February 2011. It further noted that ACC and ACL, despite having ceased to be members
of the CMA, attended these meetings. The CCI observed that whilst ACC and ACL
admitted to having attended these meetings, both CMA and JAL refuted their
presence. The inconsistencies in the statements of the different respondents
established that they were keen on hiding material information.
Amendments
to the CMA constitutional documents: Certain rules
and regulations of CMA had serious competition concerns. These were highlighted
in a CMA meeting on 30 November 2009. However, the amendments to those rules
and regulations were only carried out once the DG sent notice to the respondents
in the instant case.
to the CMA constitutional documents: Certain rules
and regulations of CMA had serious competition concerns. These were highlighted
in a CMA meeting on 30 November 2009. However, the amendments to those rules
and regulations were only carried out once the DG sent notice to the respondents
in the instant case.
Price
Parallelism: The DG had conducted an economic
analysis of price data which indicated that there was a very strong positive
correlation in the prices of all companies. This, according to the DG,
confirmed price parallelism. The respondents argued that the correlation
benchmark of 0.5 taken by the DG was arbitrary. Moreover, the prices used by
the DG were incomparable since the prices submitted by the companies differed
from each other (some had submitted gross prices, while others had submitted
depot prices, average retail prices etc.).
The CCI did not accept these arguments and stated that given the nature
of data exchanged between the parties, price parallelism could not be a reflection
of non-collusive oligopolistic market conditions.
Parallelism: The DG had conducted an economic
analysis of price data which indicated that there was a very strong positive
correlation in the prices of all companies. This, according to the DG,
confirmed price parallelism. The respondents argued that the correlation
benchmark of 0.5 taken by the DG was arbitrary. Moreover, the prices used by
the DG were incomparable since the prices submitted by the companies differed
from each other (some had submitted gross prices, while others had submitted
depot prices, average retail prices etc.).
The CCI did not accept these arguments and stated that given the nature
of data exchanged between the parties, price parallelism could not be a reflection
of non-collusive oligopolistic market conditions.
Limiting
and controlling production: The Report submitted by
the DG suggested that whilst capacity utilisation increased during the last
four years, the production has not increased commensurately during this period.
The various respondents contested these figures and led evidence to show that
capacity utilisation was on the increase. It was also argued that the DG had
incorrectly relied upon ‘name plate’ capacity whereas actual capacity was
dependent on raw materials, plant stabilisation time, power supply etc.
Therefore, if the aforesaid is taken into account, the capacity utilisation
would be much higher. These submissions did not hold water with the CCI, which
observed that on a year on year and plant wise basis, the capacity utilisation
across the respondents had decreased.
and controlling production: The Report submitted by
the DG suggested that whilst capacity utilisation increased during the last
four years, the production has not increased commensurately during this period.
The various respondents contested these figures and led evidence to show that
capacity utilisation was on the increase. It was also argued that the DG had
incorrectly relied upon ‘name plate’ capacity whereas actual capacity was
dependent on raw materials, plant stabilisation time, power supply etc.
Therefore, if the aforesaid is taken into account, the capacity utilisation
would be much higher. These submissions did not hold water with the CCI, which
observed that on a year on year and plant wise basis, the capacity utilisation
across the respondents had decreased.
Limiting
and controlling supply: The CCI observed that the
forces of demand and supply dictated that the dispatch figures should have been
more than or equal to consumption of cement in the corresponding period of the
previous year. However, in two months of November and December 2010, the
dispatch was lower than the actual consumption for the corresponding months of 2009. It was not the case that the
market could not absorb the supplies, but, instead, the lower dispatches
coupled with the lower utilisation establishes that the cement companies
indulged in controlling and limiting the supply of cement in the market.
and controlling supply: The CCI observed that the
forces of demand and supply dictated that the dispatch figures should have been
more than or equal to consumption of cement in the corresponding period of the
previous year. However, in two months of November and December 2010, the
dispatch was lower than the actual consumption for the corresponding months of 2009. It was not the case that the
market could not absorb the supplies, but, instead, the lower dispatches
coupled with the lower utilisation establishes that the cement companies
indulged in controlling and limiting the supply of cement in the market.
Production
Parallelism: The production figures across cement
companies (in a particular geographical region) showed strong positive correlation.
According to the CCI, in November – December 2010 the cement companies reduced
production collectively, although during the same period in 2009, the
production of the cement companies differed. This was a clear indication of
co-ordinated behaviour.
Parallelism: The production figures across cement
companies (in a particular geographical region) showed strong positive correlation.
According to the CCI, in November – December 2010 the cement companies reduced
production collectively, although during the same period in 2009, the
production of the cement companies differed. This was a clear indication of
co-ordinated behaviour.
Dispatch
Parallelism: It was observed that the dispatches
made by the cement companies have been almost identical for the period from
January 2009 to December 2010. The cement companies argued that the parallelism
in both production and dispatch is on account of the commoditised nature of
cement, the cyclical nature of the cement industry and the ability of
competitors to intelligently respond to the actions of their competitors. The
CCI noted that the drop in production and dispatch in the November 2010 was
unusual especially when November 2009 witnessed a mixed trend. Interestingly,
the CCI held that the parties to a cartel may not always co-ordinate their
action; periodically their conduct may reflect a competitive market. Where
co-ordination proves gainful, parties will substitute competition for
collusion.
Parallelism: It was observed that the dispatches
made by the cement companies have been almost identical for the period from
January 2009 to December 2010. The cement companies argued that the parallelism
in both production and dispatch is on account of the commoditised nature of
cement, the cyclical nature of the cement industry and the ability of
competitors to intelligently respond to the actions of their competitors. The
CCI noted that the drop in production and dispatch in the November 2010 was
unusual especially when November 2009 witnessed a mixed trend. Interestingly,
the CCI held that the parties to a cartel may not always co-ordinate their
action; periodically their conduct may reflect a competitive market. Where
co-ordination proves gainful, parties will substitute competition for
collusion.
Increase
in price: The deliberate act of shortage in
production and supplies by the cement companies and almost inelastic nature of
demand of cement in the market resulted into higher prices for cement. The CCI
was of the view that there was no apparent constraint in demand which could
justify the lower capacity utilisation. Further, there was no constraint in
demand during November and December 2010, and, in fact, the construction
industry saw a positive growth in the third quarter of 2010-11.
in price: The deliberate act of shortage in
production and supplies by the cement companies and almost inelastic nature of
demand of cement in the market resulted into higher prices for cement. The CCI
was of the view that there was no apparent constraint in demand which could
justify the lower capacity utilisation. Further, there was no constraint in
demand during November and December 2010, and, in fact, the construction
industry saw a positive growth in the third quarter of 2010-11.
Price
Leadership: The CCI noted that the given the small
number of major cement manufacturers, the price leaders gave price signals
through advanced media reporting which made it easier for other manufactures to
co-ordinate their strategies.
Leadership: The CCI noted that the given the small
number of major cement manufacturers, the price leaders gave price signals
through advanced media reporting which made it easier for other manufactures to
co-ordinate their strategies.
High
Profit Margins: The profit margins of all the
cement companies were examined by the Commission, which arrived at the
conclusion that some companies posted a high Return on Capital Employed and
higher EBITDA in 2010-11 as compared with 2009-10. Additionally, the CCI
observed that the respondents earned huge margins over the cost of sales.
Profit Margins: The profit margins of all the
cement companies were examined by the Commission, which arrived at the
conclusion that some companies posted a high Return on Capital Employed and
higher EBITDA in 2010-11 as compared with 2009-10. Additionally, the CCI
observed that the respondents earned huge margins over the cost of sales.
Factors
set out in Section 19(3) of the Competition Act: It
is worth noting that the CCI has stated that where contraventions of sections
3(3) (a) and (b) are proved, the adverse effect on competition is presumed.
However, on account of the rebuttals raised by the respondents, it considered
the factors mentioned in section 19(3) to determine whether an appreciable
adverse effect on competition has been caused.
set out in Section 19(3) of the Competition Act: It
is worth noting that the CCI has stated that where contraventions of sections
3(3) (a) and (b) are proved, the adverse effect on competition is presumed.
However, on account of the rebuttals raised by the respondents, it considered
the factors mentioned in section 19(3) to determine whether an appreciable
adverse effect on competition has been caused.
Although, the Commission did not go
into the factors set out in section 19 (3) (a), (b) and (c), it held that the
increase of price and reduced supply in the market was to the detriment of the
consumers. Further, the efficiency defences in section 19 (e) and (f) were not
available as the conduct of the respondents neither caused any improvement in
production or distribution of goods nor any promotion of technical, scientific
and economic development.
into the factors set out in section 19 (3) (a), (b) and (c), it held that the
increase of price and reduced supply in the market was to the detriment of the
consumers. Further, the efficiency defences in section 19 (e) and (f) were not
available as the conduct of the respondents neither caused any improvement in
production or distribution of goods nor any promotion of technical, scientific
and economic development.
In view of the evidence and the
analysis of the factors mentioned in sections 19(d) to (f), the contraventions
of sections 3(3) (a) and (b) stood established.
analysis of the factors mentioned in sections 19(d) to (f), the contraventions
of sections 3(3) (a) and (b) stood established.
Directions of the CCI
In cartel cases, the CCI has the power
to to fine parties up to three times of its profit for each year of the
continuance of the cartel or 10% of its turnover for each year of the
continuance of the cartel, whichever is higher. The turnover and profit for the
cement companies were examined and accordingly the following penalties were
levied on the cement companies.
to to fine parties up to three times of its profit for each year of the
continuance of the cartel or 10% of its turnover for each year of the
continuance of the cartel, whichever is higher. The turnover and profit for the
cement companies were examined and accordingly the following penalties were
levied on the cement companies.
|
Company
|
Penalty
(INR in Crores) |
|
ACC
Ltd. |
1147.59
|
|
Ambuja
Cements Ltd. |
1163.91
|
|
Binani
Cements Ltd. |
167.32
|
|
Century
Textiles Ltd. |
274.02
|
|
India
Cements Ltd. |
187.48
|
|
J
K Cements Ltd. |
128.54
|
|
Lafarge
India Pvt. Ltd. |
480.01
|
|
Madras
Cements Ltd. |
258.68
|
|
Ultratech
Cement Ltd. |
1175.49
|
|
Jaiprakash
Associates Ltd. |
1323.60
|
In addition, the CMA was fined 10% of
its total receipts for the past two years.
its total receipts for the past two years.
The respondents have been directed to
pay the above penalties within 90 days of the receipt of the CCI order.
pay the above penalties within 90 days of the receipt of the CCI order.
The CCI also directed the companies to
‘cease and desist’ from indulging in agreement or understanding on prices, production
and supply of cement in the market. Similarly, the CMA has been directed to
disengage and disassociate itself from
collecting wholesale and retail prices through the member cement
companies and also from circulating the
details on production and dispatches of cement companies to its members.
‘cease and desist’ from indulging in agreement or understanding on prices, production
and supply of cement in the market. Similarly, the CMA has been directed to
disengage and disassociate itself from
collecting wholesale and retail prices through the member cement
companies and also from circulating the
details on production and dispatches of cement companies to its members.
– Karan S. Chandiok
Off hand:
The CCI's subject Order deserves to be commended as another landmark decision by the authority on an aspect having a special social significance. That is, the CCI has, for a change, desirably so in today's context but long wanting, turning down the defence sought to be put up by the OPs mainly relying on the rules of the Evidence Act, laid greater emphasis on the so called principles of natural justice.
For an appreciation in proper light, outstanding legal luminary, Palkhivala's unbiased expert viewpoints and truly thought provoking exemplary ideas as found canvassed in many of his published writings and speeches could be of help. Choosing at random, his Address to The Xavier Labour Institute, Jamshepur (Ref. Obedience to the unenforceable – WE THE PEOPLE) is worth reading (look for more; e.g. in his another Address titled – INDIA-THE POTENTIAL AND THE REALITY (same Book)!).
In recent years, as might have been noted, there has been a paradigm shift in the importance given to the man made rules of law (e.g Evidence Act); and, there has been, primarily to suit the drastically changed modern times, a growing tendency to, instead, prefer being guided by / adopting principles of natural justice. That has come to be noticed , besides in regard to administration of justice / adjudication, even at the threshold stage of the framing of statutory rules and regulations. Anyone truly interested may have a look at the Regulatory Bill for the realty sector, pending enactment; for an elaboration, also at the related Blogs @ vswaminathan-swamilook.blogspot.com
Really appreciate the concise summary of the CCI's long order…..
The respondents also did argue that countries like US and EU use price parallelism plus factors' approach to establish circumstantial evidence of existence of an agreement. And according to them, CCI has viewed behavior as an indication of collusion. Undoubtedly, CCI order has sent very strong signal that agreement of any kind will not be tolerated but it is sometimes difficult in some situations to distinguish between:
o Similar/parallel conduct due to collusion in an oligopoly and
o Similar/parallel conduct that arises from separate (non-collusive) decisions which recognize mutual interdependence (which may be more stable and free from incentives to cheat because decisions are taken independently)
This happens especially in case of oligopolies where competitors cannot act independently.
Will be glad to have perspectives from other readers/scholars on this issue.
What the CCI found out is technically called 'shadow pricing' I am sure that apart from relation from simple correlations, CCI must have compared findings by detailed analysis of time trends, partialling out effects of cost etc, and clculating the 'shadow component' and then comparing it with ologopolist structure. Prima facie, there are downtrends in demand of cement industry(2009-10) when this investigation was ocurring, and this assosciation has been previously been found guilty of the same. One weakness what I find is the following. The provisions that lead to the power of CCI constrined to price brands. Can CCI calculate the actualquantum of harm done to consumers, rather than provisions given in the act profits of last 3 yrs or 10% of each yr of continuing. Cleraly there could be a case where industrires would cartelise in sipte of this, have the benefits been large enough.
Yuo shadow pricing….. The cci must have modelled and found out the actual effects match with oligopolist trends……. There was a demand side fall in summer 2009/10(do not remember the exact date) which enables this analysis straightforward. The respondents could not argue it out this way. But I leave an open question unanswered. The scope of the law, why does it empower the CCi to penalise upto 10% of turnover for each year of practice or 3yrs of profits, whichever is higher(if I am correct). What about the de-facto harm. A plaintiff might get lesser penalties by saying it opted out of a merger but preferred to remain silent beacuse it gave it profits by deviating. But it contributed to actual loss to consumers,and doing so it must be fined no less….. Why not incorporate an element to this. In cement manufacturers case, they have been fined earlier. However the CCI has powers to compel the managers to report to DG, why this could be more compelling than the earlier under MRTP.
Underutilization of capacity coupled with increase in prices by creating artificial scarcity is nothing short of ‘criminal breach of trust’ reposed by the State and mass at large when the enterprise was permitted to operate in public domain. The order comes with a robust reasoning. The tribunal must penaly depress at once the audacity of the OPs to hastily challenge the well reasoned order.
The cement industry market in India has been growing significantly on back of increasing infrastructure activities, rising demand for services from housing sector, and construction recovery.