India: CCI imposes penalties on seven cement companies for bid-rigging

The Competition Commission of India has imposed penalties on seven cement companies for bid rigging of a tender floated by the Director, Supplies and Disposals of Haryana in 2012 for procurement of cement to be supplied to the Government Departments/Boards/Corporations in the state. The CCI has also imposed penalties upon 10 cement companies and their trade association i.e. Cement Manufacturers Association for cartelisation in the cement industry.

A final order has been passed by CCI pursuant to a reference filed under Section 19(1)(b) of the Competition Act, 2002 by the Director, Supplies and Disposals, Haryana and Competition Appellate Tribunal remanding the matter back while setting aside the original order of CCI. The CCI has held that the cement companies, through their impugned conduct, have engaged in bid-rigging in contravention of the provisions of Section 3(3)(d) read with Section 3(1) of the Act, which eliminated and lessened competition and manipulated the bidding process in respect of the impugned tender.

The bid-rigging has been established from quoting of unusually higher rates in the impugned tender (than rates quoted in tenders of previous years), determining different basic prices for supply of cement at the same destination through reverse calculation, quoting of quantities in the impugned tender such that the total bid quantity almost equalled the total tendered quantity, quoting of rates for the districts in a manner that all cement companies acquired L1 status at some of the destination(s) etc. The anti-competitive conduct was re-affirmed through SMSes exchanged and calls made amongst the officials of the cement companies.

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