CCI imposes a penalty on paper manufacturers for indulging in cartelization

Case Details: Anti-competitive conduct in the paper manufacturing industry, In re - [2021] 132 taxmann.com 170 (CCI)

Judiciary and Counsel Details

• • Ashok Kumar Gupta, Chairperson
  • Sangeeta Verma and Bhagwant Singh Bishnoi, Member
  • Ramji Srinivasan and Rajshekhar Rao, Sr. Advs. K.K.R. Das, Nakul Mohta, Ms. Vatsala Pandey, Manav Vohra, Pawan Upadhyay, Ms. Tanzeela Mubashsharah, Shivkrit Rai, Atul Dua, Ms. Gayatri Verma, Abir Roy, Vivek Pandey, Gaurav Mitra, Salil Seth, Shwetank Ginodia, Satyaki Mukherjee, Ranjan Sardana, Sadapurna Mukherjee, Samar Bansal, Ms. Harsheen Madan, Vaibhav Choukse, Ms. Nripi Jolly, Ms. Sonal Sarda, Ms. Ela Bali, Ms. Aditi Khanna, Puneet Kumar Verma, K.K. Sharma, Karan Singh Chandhiok, Vikram Sobti and Lagna Panda, Advs. for the Appearing Party.

Facts of the Case

In the instant case, the CCI, on basis of certain material found during ongoing investigations of two other cases found that Opposite Parties (Ops) manufacturing paper from agricultural waste and recycled wastepaper had indulged in cartelization in fixing prices of writing and printing paper.

The OPs were indulged in cartelization by participating in meetings convened under the umbrella of the platform provided by their trade association and discussing prices and roadmap for coordinated increase. OPs also monitored decisions taken in such meetings, It was held that such conduct of OP was sufficient to hold that OPs had contravened provisions of section 3(1) read with section 3(3)(a) thereof, which proscribe anti-competitive agreements.

CCI Held

The CCI directed OPs and their respective officials who had been held liable in terms of provisions of section 48 were to cease and desist in the future from indulging in practices that had been found to be in contravention of provisions of section 3.

Considering matter holistically, due to economic slowdown due to covid-19 pandemic, the CCI imposed a fair and just monetary penalty of only Rs. 5 Lakh upon each of who had been found to have contravened provisions of Act and a penalty of Rs. 2.50 lakh was imposed upon the association for actively providing its platform for anti-competitive activities of players, besides convening, coordinating, and organizing meetings.

Further, the CCI cautioned OPs and their respective individuals to ensure that their future conduct was strictly in accord with provisions of the Act, failing which, any such future behavior would be viewed seriously as constituting recidivism, with attendant consequences.