11 Cement Companies

CASE NO 29/2010( SEC 3(3)- CARTEL

• 1. M/s Shree Cement Limited-through Sh.Manas K.Chaudhry & Sh.Sagardeep
• 2. Cement Manufacturers Association -through Sh. Ashok Desai & others
• 3. I/,. J.K Cement Ltd. -through Sh. P. K. Bhalla
• 4. M/s Binani Cement Limited -through Sh. AdityaNarain & Sh. R. Sudhinder
• 5. M/s Lafarge India Pvt. Ltd.-through Sh. A. Haskar & Sh. Samir Gandhi
• 6. M/s Jaiprakash Associates Limited-through Sh. ParagTripathi & Sh. G.R.
Bhatia
• 7. M/s UltraTech Cement Ltd.-through Sh.Aspi P. Chinoy & Sh.Pravin Parekh
• 8. M/s India Cements Ltd. -through Sh.Harishankar
• 9. M/s Ambuja Cements Limited-through Sh.RamjiSrinivas&Ms.AnuTiwari
• 10. M/s ACC Limited -through Sh.K.Venugal&Ms.PallaviShroff
• 11. M/s Century Textiles & Industries Ltd.-through Sh.PramodAgarwala& others
• 12. M/s Madras Cements Ltd.-through Sh. T. Srinivas Murthy
• 13. Builders Association of India -through Shri O.P. Dua & Sh. Rahu.l Goel
• Facts of the case
• 1) Builders Association of India (BAI) filed complaint under sec 19
(1) (a) of CA 2002as informant against above 11 cement
companies and cement manufacturers association (CMA) under
sec 3(3) i.e cartel and sec 4 Abuse of Dominance
• 2) Allegation was that 11 cement companies misused/ abused
platform of CMA where they used to exchange information
regarding price, production capacity etc in order to increase
prices across India
• 3) Price was Rs 145 per bag in the year 2005 and rose to Rs 230 in
the year 2006 onwards and this practice continued even after sec
3 & 4 were enforced in the year2009. Incidentaly it may be noted
that sec 5 relating to combination was enforced in the year 2011
• 4) Even though Government of India asked CMA to reduce the price,
there was no response and price was not reduced with the result that
BAI filed the above complaint before CCI
• 5) Director General of Investigation carried out investigation against
11 cement companies under sec 3(3) cartel and 4 Abuse of
Dominance and submitted his report to CCI
• 6) All 11 companies denied the allegations along with CMA
• 7) It was contended by 11 cement companies that there was no direct
evidence regarding cartel but CCI held that indirect evidence/
circumstancial evidence is sufficient under Competition Act which is a
Civil Law
• 8) DG alleged that CMA platform helped 11 companies to circulate
information about price, ouput etc and on the basis of this 11
companies formed a cartel
• 9) There was direct evidence that prices by 11 companies
increased after two meetings of CMA held on 24/2/11 and
4/3/11
• 10) It was argued by 11 companies that alleged cartelization
happened before 2009 when sec 3 &4 were enforced. CCI held
that even though cartelization started before 2009, it continued
even after 2009 onwards and hence CCI has jurisdiction
• 11) CCI held that since no single company held dominant market
share, there was no question of Abuse of Dominance under sec
4
• 12) CCI confirmed that 11 companies used to share data
regarding prices, production capacity on the platform of CMA
and hence they indulged in cartelization
• 13) CCI held that Platform of CMA gave strong evidence of co-
ordinated behaviour although there is no direct evidence, which
is not required under civil trial because CA 2002 is a civil law
• 14) It was found by CCI that when 1 company out of 11
companies used to increase price, all other companies used to
follow the similar pattern of increase in prices across India. Even
though transport cost was different for different companies,
prices used to be the same
• 15) CCI also held that by collusive behaviour 11 companies used
to reduce production for the purpose off increasing prices
• 16) Finally CCI vide its order dated 20/6/2012 confirmed the
cartelization by 11 cement companies and imposed fine of
around Rs 6000 crores