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ACC, Ambuja among cement companies facing massive fines from Competition Commission

by Roshan Ravi

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Cement Industry

The Competition Commission of India (CCI) has imposed fine of Rs 6,320.6 cr upon ten cement manufacturers for forming independent organization to limit competition by controlling the production and distribution of cement, said the Ministry of corporate affairs.

The list of companies included ACC Cements, Ambuja Cements, Binani Cements, Century Cements, India Cements, J K Cements, Lafarge, Ramco Cements, UltraTech Cements and Jaypee Group.

ACC Cements (Rs 1,147.59 cr), Ambuja Cements (Rs 1,163.91 cr), Ultratech Cements (Rs 1,175.49 cr) and Jaypee Group (Rs 1,323.60 cr) were the ones penalised with the highest amounts.

It was noted by CCI that the cement companies used the platform provided by Cement Manufacturers Association (CMA) and shared details relating to prices, capacity utilisation, production and dispatch and thereby restricted production and supplies in the market.

CCI also found the cement companies to be acting in concert in fixing prices of cement.

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.

The cement companies and CMA have been directed to cease 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 and also 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).

Such interactions have been found to have transgressed the limits in sharing of information and extended to discussions on cost, prices, production and capacities, thereby, facilitating the enterprises to determine prices and production in a concerted and collusive manner, than in a competitive manner.

CCI cautioned that all those who participate in association activities, through meetings or otherwise, whether as a member or an executive or manager or employee, have to be sensitive to the discussions not transgressing advertently or otherwise into anti-trust behaviour or practices.

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