Monday, December 31, 2007

The most common form of cartels is ‘price-fixing’

Cartelist behaviour is difficult to detect

A few days ago, the Monopolies and Restrictive Trade Practices Commission (MRTPC) found 44 cement companies guilty of cartelisation under the aegis of Cement Manufacturer’s Association (CMA) during the period February to April 1990. “Even though it took 17 years for the MRTPC to come to a decision on an old case of the pernicious cement cartel in India of 1990s, it is a case of better late than never,” says Mr Pradeep S. Mehta, who recently published Competition & Regulation in India, 2007 ( http://www.cuts-international.org/ ).

“Alas, the MRTP Act, 1969 does not have the teeth to do anything other than asking the cartel to cease and desist — in simple terms, to stop them from doing so,” rues Mr Mehta. The larger issue, according to him, is of the recent cartelisation in cement prices, fuelled by the economic boom in the country. “That case is yet to come up, and considering how slow the inquiry process moves, the same may also get dated.”

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