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Competition Commission's act, a lesson in regulation

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By imposing a stunning penalty of Rs 6,200 crore on 11 cement companies for price fixing and cartelisation, the Competition Commission of India (CCI) has once again shown that it will not hesitate to use its powers against market abuses.The penalty is calculated at 50% of their profit for the years FY09-10 and FY10-11 and covers some of the biggest and most powerful names in the cement sector such as Ambuja Cements, ACC, Grasim (now merged in UltraTech), Madras Cements, India Cements, Jaypee Cement, Lafarge India, JK Cement, Madras Cements, Century Cement and Binani Cement.The industry body Cement Manufacturers Association (CMA) has also been fined and they have all been asked to deposit the money within 90 days.Now it is exprected that there will be a backlash from the cement industry.

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