CCI discusses factors that led to record high penalty

India is the second largest cement producing country after China. The big players of the industry have been under the scanner of the Competition Commission of India (CCI) and were heavily penalized in 2012 for colluding to engage in anti-competitive activities.

In the case of a complaint by the Builders’ Association of India against the Cement Manufacturers’ Association (CMA) and 11 major cement companies, the CCI found the cement companies to be parties to an anti-competitive “agreement”, in violation of section 3 of the Competition Act, 2002. The companies challenged the order before the Competition Appellate Tribunal (COMPAT) on the grounds it violated the principles of natural justice. The COMPAT set aside the order and directed the CCI to re-adjudicate the case.

In a final order passed by the CCI on 31 August 2016 the CCI not only imposed its heaviest penalty to date – ₹63.17 billion (US$960 million) – but also analysed certain factors and facts that it viewed as evidence of collusive conduct by the industry players in an oligopolistic market.

Manjula Chawla is a partner, Ritika Ganju is a principal associate and Tushar Thimmiah is an associate at the Delhi office of Phoenix Legal.