CCI imposed a symbolic penalty of Rs 5 lakh each on the paper manufacturers found guilty of cartelization.

The Competition Commission of India (CCI) has penalized a number of paper manufactures by imposing a penalty of Rs 5 lakh each. The manufacturers have been accused of indulging in cartelization while manufacturing paper from agriculture waste and recycled wastepaper the Commission has also imposed a penalty on an association – all found to have contravened the provisions of Section 3(1) of the Competition Act, 2002 (Act).

The case was initiated suo motu by the Commission on the basis of certain material found during the ongoing investigations of two other cases. Although the DG investigated 21 original paper manufacturers and the association, it only recorded findings of contravention of the provisions of Section 3(1) of the Act read with Section 3(3)(a) thereof against ten (10) such paper manufacturers and the association. The period of cartel was noted by the DG to be from September 2012 till March 2013.

The accused parties indulged in such activities as amounting to cartelisation concerning fixing the prices of writing and printing paper.

In addition to imposing a symbolic penalty of Rs 5 lakh each on the ten paper manufacturers found guilty of cartelization, CCI further imposed a penalty of Rs. 2.5 lakh on the association for providing its platform for anti-competitive activities. CCI also directed the above paper manufacturers and the association, and their respective officials who have been held liable in terms of the provisions of Section 48 of the Act, to cease and desist in the future from indulging in anti-competitive conduct.

The firms are Bindals Papers Mills, K.R. Pulp and Papers, Khanna Paper Mills, Katyayini Paper Mills, Kuantum Papers, Madhya Bharat Papers, Naini Paper, Ruchira Papers and Shreyans Industries.

The association — the Indian Agro and Recycled Paper Mills Association — has been penalised for providing its platform for anti-competitive activities.

The regulator imposed symbolic fine on the firms considering that during the pandemic, most businesses moved to the virtual mode, thereby reducing the need for paper and affecting the paper business.