Cartels in Indian Market: Measures and Standard for its Enforcement by CCI and its effect on Economy and Consumers. by Harsh Vardhan Dhanik & Arup Sinh


Cartels in Indian Market: Measures and Standard for its Enforcement by CCI and its effect on Economy and Consumers.

                                                           * Harsh VardhanDhanik & Arup Sinh


“People Of The Same Trade Seldom Met Together, Even For Merriment And Diversion; But The Conversation Ends In A Conspiracy Against The Public Or In Some Contrivance To Raise Prices.”

Adam Smith in ‘The Wealth of Nations’.

After the formulation of the LPG (liberalization. globalization, privatization) dimensions of Indian market and business changed completely. Now new business laws were needed to tackle these situations so government made some acts to tackle these new changes like SEBI Act, Foreign exchange act and MRTP Act. MRTP Act was not successfully implemented and it led to the formation of the Competition Act, 2002. The main aim of this act was to manage and maintain healthy competition in market and to prevent the Anti-competitive agreements in the market. Cartel is one of the most popular anti-competitive agreements.

Now what is a cartel? Cartel or cartelization can be defined as collusion of companies to fix prices, manipulate bids as to share customers. Through this research paper, we will try to define and explore different types of cartels in India and there antagonistic effect on economy and consumers. One of the biggest cartels in India is the cement cartel followed by telecom cartel, aviation cartel and lots more. The aim of this research paper is to show the functioning and to identify different industries which are forming cartels for their profit. Cartels are basically formed for a homogeneous product like oil and OPEC(BIGGEST CARTEL IN WORLD) is the exemplar instance for this.

This research paper will also deal with legal aspect of cartels and challenges faced by CCI(COMPETITION COMMISSION OF INDIA) for its enforcement and this paper will try to suggest measures required to improve the competition act and will uncover the loop holes in it and its enforcement on anti-competitive agreements. This research has been made with a doctoral methodology.




[1]‘Cartel’  is an association of producers who by agreement among themselves attempt to control production, sale and prices of the product to obtain a monopoly in any particular industry or commodity. It amounts to an unfair trade practice which is not in the public interest.

Cartels are workable in an oligopoly market they fail in monopoly market because in a monopolistic market there is only one producer and he cannot form cartel because to establish a cartel we must have more than one manufacturer. Basically the aim of this research paper is to show these types of cartels which are operating in India and working effectively in this oligopolistic economy.

We have witnessed a sharp increase in the price of petrol and still no country can do anything for that because oil prices is decided by OPEC which is the biggest cartel in world and it has twelve member countries. So the aim of this research is to educate people about a hidden structure called cartel and how it can ruin over economy.


The Competition Act,2002, as amended by the Competition Act,2007, prohibits any agreement which causes, or is likely to cause appreciable adverse effect on competition in markets India. Any such agreement is void.

The agreements between companies not to compete on price, product or customers those agreements are called Cartels. The main objective of a cartel is to raise price above competition levels, which ultimately results in injury to the consumers and to the economy.For consumer’scartelization results are higher prices, poor quality and less or no choice for goods and services.


A cartel is said to persist when two or more companies enter into any agreement, i.e. explicit or implicit, to fix prices, to limit production and supply, to assign market share or sales quotas, or to involve in collusive bidding or bid-rigging in one or more markets.


Cartel is defined in section 2, sub section(c) of the Act, which states:

“Cartel” includes an association of producers, sellers, distributors, traders or service providers who by an agreement among themselves, limit, control, or attempt to control the production, distribution, sale or price of, or, trade in goods or provisions in services.


An important extent in the definition of cartel is that it requires an agreement between competing companies, not to compete or to restrict competition.


There are three types of cartel:

  1. International Cartel: When the companies in a cartel are not from a same country or when a cartel is affecting market of more than one country.


  1. Import Cartel: It consists of company which gets together for the purpose of imports into the country.
  2. Export Cartel: This cartel is made for the companies based in one country with an agreement to cartelize in different countries.

Section 3, sub section (5), clause (ii) of the Act states:

“Nothing contained in this section shall restrict the right of any person to export goods from India to the extent to which the agreement relates exclusively to the production, supply, distribution or control of goods or provision of services for such export.

EXTRA TERRITORIAL REACH: The Anti-Competitive activities, including cartels, which are taking place outside India but have an effect on competition in India would fall within the ambit of the Act and can be enquired into by the commission.

Necessary Factors for Establishing Cartels:

Three major factors are necessary to establish a cartel includes:

1.The cartel must be able to raise price above the non-cartel level without inducing substantial increased competition from non-member firms.

  1. The expected punishment for forming a cartel must be low relative to the expected gains.
  2. The cost of establishing and enforcing a cartel agreement must be low relative to its expected gains.

Only if a cartel is expected to raise the price above the non-cartel level and keep it high do the firms join. An increase in price will bring about an increase in revenue only if the demand curve facing a cartel is inelastic. An inelastic demand curve in the long run requires the co-incidence for the following three factors:

  1. Very few close substitutes in the cartelized product market.
  2. Large market share of cartel members
  3. Substantial barriers to entry into the market for the cartelized product.

Cartels are more likely to be formed in concentrated industries. They are also often found in smaller geographical areas, since market, being small is more likely to have few firms, who have a large share of the business. Globally, cartel members usually controlled over 90% of the market sales in the cartelized product. Cartelization also requires product homogeneity, as companies have more difficulty agreeing on relative prices when each company’s product has different qualities or properties.

At last, even if a potential cartel could raise prices in the long run, and not be discovered, it would not fructify if the cost of initial organization, as well as the associated monitoring cost a too high as compared to the expected games. Companies have to constantly monitor each other’s behavior to guard against cheating and such activity has associated cost which can be substantial to the extent that the members can agree on a contributory scheme to fund the exercise. Some of the factors that lead to the formation of a cartel also help it to detect cheating and enforce it agreement. The following four factors aid in the detection of cheating:

  1. Smaller number of firms.
  2. No independent fluctuation of prices
  3. Wide knowledge of prices
  4. Product homogeneity among cartel members at each point in the distribution chain.

The factors which are mentioned above could be used by competition authorities as strong bench marks to prioritize their enforcement activities vis-à-vis cartels. With few companies, the cartel members may more easily monitor each other, and increases in a company’s share of the market is easier to detect.

Detecting a cartel:

Detection of cartels is a challenging task it involves knowing where they are most likely to form and operate. The condition got worst with the advent of globalization; economic transactions moved on from ink paper to digital forms and beyond the physical boundaries of a nation state to where various stakeholders in the market can produce, sell and buy goods from stakeholders of different countries. The common consumer is subject to a higher degree of abuse, since firms have also become more powerful and better equipped to enforce their cartel agreements. Anti-cartel enforcement and the protection of consumer interest become extremely difficult when they cannot be governed by the laws of single nation. Large firms can decide independently to behave as though they had a cartel arrangement without a formal meeting; that is, each one can cut its output and hope the others will do the same. The following effective tools may be used in order to detect a cartel:

  1. Dawn Raids: In most countries the most effective tool available to the cartel prosecutor the “Dawn Raid”, or unannounced visit to the offices of suspected cartel operators for the purpose of ceasing documentary or electronic evidence of a cartel agreement. In order for a dawn raid to be effective, the fact that a competition authority is conducting an investigation must be held in strictest confidence even within the authority. The longer and more complicated the process, the more players it involves, and there is a higher possibility that information might leak.
  2. Leniency and Whistleblower protection: Competition authorities can have an effective leniency policy in place in order to detect a cartel. This policy demands that the cartel participants come forward and disclose true and substantial information before the authority concerned in order to make cartel detection effective. The international explosion of leniency programs is perhaps not surprising given the competition authorities increasing focus on the elimination of cartels. The economic damage caused by the cartels to the interests of the consumers and the wider market is globally acknowledged. A whistleblower typically is an employee or ex-employee who resents his employer for some reason, such as a demotion or a dismissal. They are in practice often ex-employees and a fair amount of time may have passed since the whistleblower became aware of the cartel activity, so that the any incriminating documents can no longer exist.


After the Independence government of India formulated many policies to ensure the growth of India’s market. One of the policies that were a game changer the Indian market was LPG policy, the main aim of the LPG policy was to Increase trade of India with other countries this not only increased our export and import but also increased over foreign exchange. This allowed the entry of MNC in the market, now in order to formulate healthy competition in the market Indian government introduced the MRTP Act. The main aim of this Act was to manage and serve guidelines for competition in India but it failed in doing so, some of the reasons for its failure

  1. it became old and obsolete after a point of time it could not deal with new policies of companies
  2. MRTP act was not empowered to impose penalties; section 27 of the competition act empowers the CCI to do so.
  3. MRTP Act did not have definitions for various trades offending specially the meaning of cartel.

For these reasons only Competition act 2002 was enacted and CCI was made functional through this act. The new CCI can impose penalties and take stringent action against cartels and can impose heavy penalties. The main objective of the Act is as follows

  1. Prohibition of anti-competitive agreement
  2. Prohibition of abuse of abuse of dominance
  3. Regulation of combinations
  4. Establishment of competition commission of india(CCI)
  5. Functions and powers of CCI

Now this was the objective of competition act but what about cartels do they exist in India?

The answer is yes and of the biggest of them is Cement cartel. Cement being a homogeneous product and India being developing country cement is evil necessity.

Cement cartel: Now a day, a great boost is going on in the real estate industry in India. In this event, a great cartel was formed in the cement industry, as cement is the most needed component of the real estate business. In the year of 2000-2001 near about cement industry of India like, Grasim, lafarze, birla and many more entered into a cartel resulting prise control in Indian market. A complaint was filed to the Competition Committee regarding this. According to this complaint mainly in the city of Jabalpur, the price of the cement increased significantly. The complaint also alleged about a concerted practice among the cement giants regarding the price fixation and it also gave detail of a minute report of a meeting where this concerted practice was carried on. India is ranked second in world in cement producing countries.

Now talking about other cartels in Indian market recently there is a hype about few cartels in Indian market like telecom sector n cartel which try to fix their telecom charges at a same time, same hike on the same day telecom sectors like airtel ,essar , Vodafone charging same GSM operators got slammed for forming a cartel they all fixed  . Secondly there is cartel in airlines system recently jet and kingfisher airlines cartel was detected by the CCI, still it didn’t had enough evidence to prove it. Thirdly, another type of cartel operational in Indian market is soda ash cartel Soda ash cartel: Alkali Manufacturers Association of India v. American Natural Soda Ash Corporation is very important. This cartel was related to soda ash. Before formation of this cartel, there were 6 producers of soda ash, they were acting independently, after formation of this cartel they started to produce soda ash and supply them throughout the world in a very cheap rate. For this reason the local producers of different nations started to face difficulties to survive in the competition. In Indian also the same problem occurred. The Government of India charged a very high rate of anti-dumping duty upon this cartel.[2]

Fourthly another developing cartel is Cartel in Road Transport: Road transport is considered as lifeline of the economic growth of any country, so India is not the exception to this. We can take example of Germany’s Autobahn, which makes a revolutionary change in the economic position of this country by connecting the major cities with the remote villages. At the beginning the road was considered as public matter and exclusively made by the Government, but with the changing of the time it is not possible for the Govt. to take all the responsibilities regarding the road transport, there is also a factor of investment. Particularly for the maintenance and for investing more fund with the increasing demand private and foreign investors come into the picture. Competition starts between them. There is no doubt that this road transport sector of India is huge and also very profitable, so the investors starts to inter into anti-competitive agreements and also bid rigging, which are totally prohibited under the Competition Act 2002. There are also instances of entry barriers, resulting territorial allocation of contracts, which are also prohibited under the Act. Illegal competition is also going on with the raw materials needed for the road construction, like steel, roads, cement etc. Proper road transportation system is required for better implementation of the socio-economic policies of the country. It also affects the price of the goods. So, the CCI should make appropriate provisions to give a check and balance method to control the anti-competitive activities in road transportation system.

Railway cartel: In the very recent time it comes into picture that in Indian Railway a cartel is going on regarding the seats of the compartments. Previously foam was used to make these seats. Suddenly the RDSO, which is the research and development wing of Railway shifted to a new material called recron for making seats. It comes to know from an investigation that the recron seats take Rs. 50000 for one compartment, whereas the foam made seats charged Rs 18000 per compartment, the investigation further says that this recron is not suitable for the Indian weather also. The whole supply of the recron is given to two suppliers, without calling a tender for that and these two suppliers charged near about 200% more than the market rate of the recron seats. So, there is no doubt that these two vendors of recon act as cartel and the RDSO would never make any doubt regarding this.[3]

Another type of cartel in Railway can be found in Competition Commission of India v Steel Authority of India Limited and another, this case was filed by one company against the SAIL, alleging that it entered into an exclusive agreement with Indian Railway for supplying of steel for the railway track.

All these are few of the examples of cartels prominent in INDIA.


Now talking the worst part of cartels is its effect on consumers and economy every cartel is anti-consumer but its effect on economy depends upon type of economy. Like oligopoly economy is worst effected by cartel but monopolistic economy is least effected by a cartel because of the number of manufacturers. Cartels injure consumers by raising prices and restricting supply and the market or the economy experiences dead weight loss because of the inefficiencies related to cartelistic behavior among competitors. Cartelistic conducts are criminalized under most competition laws (Zambia included) the Zambian competition law. The United States of America Jurisdiction also makes cartel behavior a criminal offence. However, not all jurisdictions impose criminal sanctions for cartel behavior. For example, the European Community jurisdiction does not impose criminal sanctions on those involved in such activity but instead impose fines on culpable firms for the purposes of reparation. Cartels, in economic terms, convert a competition environment, where many firms are in innovative rivalry, to a monopolistic non-innovative market. This is because firms act in unison in terms of pricing and production. Therefore, the supply and costing of the industry can be said to be ‘managed’. But there are still several countries that still do not have competition laws like Bangladesh. In India CUTS (consumer utility and trust body) is another organization looking for working of cartels. CUTS international has concluded as 5th as World competition day.

CUTS consider that an agenda to discipline cartels would provide multiple benefits both to the agency/government and consumers. Cartels steal billions of dollars from businesses, taxpayers and ultimately from consumers. Consumers benefit from competition through lower prices and better choice and quality products and services.[4]

The negative effects on consumers include:

  1. Higher prices– cartel members can all raise prices together, which reduces the Elasticity of Demand for any single member.
  2. Lack of transparency– members may agree to hide prices or withhold information, such as the hidden charges in credit card transactions.
  3. Restricted output– members may agree to limit output onto the market, as with OPEC and its oil quotas.
  4. Carving up a market– cartel members may collectively agree to break up a market into regions or territories and not compete in each other’s territory.

When are cartels most powerful?

They are at their most powerful when there are high barriers to entry into the market or industry, and when all members can be ‘policed’ by a dominant member.

Cartel-like behavior

Some firms may act as though there is a cartel and undertake cartel-like’ behavior, even though there is no formal cartel, and this may be subject to investigation by the regulators.

See also: Complex monopolies


The Siemens led electronic equipment cartel

In January 2007, the European Commission imposed a record fine of £500m on 11 European power equipment firms, led by the German firm Siemens. The Commission argued that Siemens, along with 10 other firms, had ‘carved-up’ the European power equipment market between 1988 and 2004. The market had been carved-up along geographical lines and through a quota system.

One of the cartel members, Swiss based ABB, had escaped a fine because it has been a ‘whistle blower’ and provided crucial evidence to the Commission.

See BLOG on British Airways fixing[5]


Private international cartels are conspiracies among firms from multiple countries to reduce market competition in an agreed upon industry and may have considerable welfare implications for both consumers and producers worldwide. This study investigates the impact of such cartels on developing countries by estimating the

welfare loss felt by developing countries’ consumers. Consumer welfare loss is composed

Of two parts – an overcharge and a deadweight loss. In addition to estimating the overcharge of six recent international cartels, the study uses regression models to derive the total welfare loss of one – the seamless steel tubes cartel. Findings show that the total welfare loss felt by developing countries’ consumers from the seamless steel tubes cartel amounted to $1.4 billion. Upon coupling the empirical results with analysis of antitrust policies, this paper shows that the deterrence power embedded in existing antitrust policies is insufficient in combating international cartels that hurt developing countries.


Rapid global economic integration has created invaluable opportunities for developing countries to grow, through gaining foreign technology, participating in global production networks, and not least through increasing domestic market competition by opening the countries’ borders to foreign goods and services. The growth of trade in goods and services, however, has also made developing countries more vulnerable to foreign sources of anti-competitive behavior. Private collusion is one significant source of foreign competitive behavior. In recent years, various multilateral organizations and competition authorities, including the OECD, the U.S. Department of Justice, and the European Commission, have become increasingly concerned with international market distortions that result from the price and market rigging of large private cartels formed by firms across industrialized countries that stifle competition in the markets of both industrialized and developing countries.


For a pure economic efficiency, the world as whole would be relaxed if private cartels were banned. From a development point of view, it is especially important to prosecute cartels that hurt developing country consumers and obstruct the development of the countries potentially important export sectors.


The potential impacts of internal cartel activities on developing countries: Many international cartels have been known to hurt both consumers and producers of developing countries -consumers suffer from the price increase and producers are barred from exporting to the markets of the cartel members. Methods that cartel members have used to thwart entry by developing country producers include tariff barriers and anti-dumping duties against countries of potential entrants. A cartel sets an industry price umbrella. It is possible that a limited number of developing country producers, who do not belong to the cartel, are allowed to sell at or slightly below the cartel price. Any benefits that may accrue to developing country producers, however, should be carefully weighed against the costs of reduced market competition.


In present time Section 27 b of the Competition act clearly defines the penalties for forming the cartel, but for proving a working of a cartel in India is quiet a tough job. Like in Indian cases we need to prove it beyond reasonable doubt but in countries like U.S.A and Australia penalties and investigation techniques are much effective.The Competition Commission of India started various advocacy programs with a special focus on cartelization. The leniency program is being actively publicized in order to encourage cartel members to turn informants and to discourage cartel. By increasing public awareness, it is believed that it will encourage people to report instances of cartelization

The Competition Amendment Bill, 2002 proposes to permit search and seizure powers to the Director General who is the investigating officer under the Act, after getting proper authorization from the Chairperson of the Competition Commission of India. The amendment would make it easier for the DG to swiftly conduct Dawn Raids and investigations in relation to matters before the CCI, without the procedural requirement of approaching a judicial authority for approval.

The initiatives discussed above, and the increased seriousness with which both the Government and the industry is viewing the scope and need for an effective competition regulator in India, it is clear that the CCI will continue to have full support in its use of deterrence and public awareness to combat the evil effects of cartels having an effect on the markets in India.

Prosecuting Cartel without direct Agreement:

Direct evidence of an agreement is that which signifies a meeting or communication between the matters and describe the substance of an agreement. The main forms of direct evidence are documents which can identify an agreement and its parties to it, oral or written statements by co-operative cartel participants describing the operation of the cartel.

Circumstantial evidence is that evidence that does not specifically describes the terms of an agreement, or the parties to it. It includes evidence of communications among suspected cartel operators and economic evidence concerning the market and the conduct of that participation in it.



Evidence of parallel conduct by competitors sufficient to prove an agreement?

No, almost in every country it is not sufficient to show that competitors acted in parallel fashion, because such could be consistent either with agreement or with independent action taken by each competitor unilaterally. Suitable plus factors include both communication and economic evidence.

Economic theories of oligopoly provide valuable perception on interpreting economic evidence. There are three broad categories of economic models which describes firm’s behavior.

  1. Firms can independently pursue their unilateral non- cooperative best response.
  2. Firms may on time recognize that mutual accommodation is in their interests.
  3. Firms reach to an agreement through some form of communication with one another.


Is circumstantial evidence useful in countries that are relatively new to anti-cartel enforcement?

Any country that is just going to start its competition law may face many difficulties for getting direct evidence of a cartel agreement. Most probably they will not have leniency program which is the primary source of direct evidence. There may be lacking in the country of a competition culture, which can make it more difficult for the agencies to generate co-operation with its anti-cartel program. Shortly, the agencies could have found greater difficulties to get direct evidence in cartel cases, which would imply that it will have to rely basically on circumstantial evidences. The situation in these countries depends on a case by case basis, but it is clear that circumstantial evidence is slightly useful in the right circumstances.

Powers of the commission:

The MRTPC was not empowered to impose penalties.

According to section 27 of the Competition Act gives power to the CCI, which can impose strict orders and fines on detection of cartel activities? According to this section, CCI can impose a penalty equal to three times of the amount of profits made out of such agreement by the cartel or 10% of the average turnover of the cartel for the past three financial years, whichever is higher.

MRTP Act did not empower the MRTPC with extra-territorial jurisdiction. Any action against an anti-competitive agreement can only be imposed if it involved an Indian party and that also if the goods are being imported from India. After the amendment, the new law has extra-territorial reach and its provisions are based on the ‘effects doctrine’. Section 32 of this Act states that the CCI has the power to inquire to any restrictive agreement which has an anti-competitive effect on Indian markets irrespective of where the involved parties are located.


Right beginning from MRTP Act penalties and punishments regarding cartels were very less and moreover the Competition act 2002 also laid some basic and lenient penalties which did not affected them. Section 46 of Competition Act laid down following , the commission may if it is satisfied that any producer , seller , distributor , trader or service provider included in any cartel , which alleged to have violated section 3 , has made a full and true disclosure in respect of the alleged violations and such disclosure is vital, impose upon such producer, seller distributor, trader or service provider a lesser penalty as it may deem fit, than leviable under this act or the rules or the regulations:

[6] Provided that lesser penalty shall not be imposed by the commission in cases where proceedings for the violation of any of any of the provisions of this act or the rules or the regulations have been instituted or any investigation has been directed to be made under section 26 before making of such disclosure:

Provided further that lesser penalty shall be imposed by the commission only in respect of a producer, seller, distributor, trader or service provider included in the cartel, who first made the full, true and vital disclosures under this section:

Provided also that the commission may, if it is satisfied that such producer , seller, distributor , trader or service provider included in the cartel had in the course of proceedings, –

  1. Not complied with the condition on which the lesser penalty was imposed by the commission ; or
  2. Had given false evidence : or
  3. The disclosure made is not vital;

And thereupon such producer, seller , distributor , trader or service provider and be tried for the offence with respect to which the lesser penalty was imposed and shall also be liable to the imposition of penalty to which such person has been liable, had lesser penalty not been imposed.

This section dealt only with lenient punishments but if we see the European competition act they are well written and suggested strict compensation relating to cartels. European commission as reflected in the very heavy fines it imposes on violators, where they are individuals or overseas corporations operating within the community. In calculating fines in cartels cases, the commission takes account of the severity or gravity of the violation, its duration and related issues and circumstances. It also takes account of the market share held by the companies and overall size, so as to ensure that the fine reflects each company’s participation in the infringement and its capacity to harm other operators, particularly consumers and so as to ensure that the fine acts as a deterrent.

After these flaws in Competition act 2002 government made an amendment in Competition Act in 2007 stated the following changes:

[7]Section 46 stated the commission may, if it is satisfied that any producer, seller, distributor, trader or service provider included in any cartel, which is alleged to have violated section 3, has made a full and true disclosure in respect of the alleged violation and such disclosure is vital, impose upon such producer,seller,distributor, trader or service provider a lesser penalty as it may deem fit, then leviable under this act or the rules or the regulations:

Provided that lesser penalty shall not be imposed by the commission in cases where the investigation directed under section 26 has been received before making of such disclosure.

Provided further that lesser penalty shall be imposed by the commission only in respect of a producer, seller, distributor, trader or service provider included in the cartel, who has made the full, true and vital disclosures under this section.

Provided also that the commission may , if it is satisfied that such producer, seller , distributor, trader or service provider included in the cartel had in the course of proceedings,-

  1. Not complied with the condition on which the lesser penalty was imposed by the commission : or
  2. Had given false evidence ; or
  3. The disclosure made is not vital,

And thereupon such producer, seller, distributor, trader or service provider may be tried for the offence with respect to which the lesser penalty was imposed and shall also be liable to the imposition of penalty to which such person has been liable, had lesser penalty not been imposed.


One thing that we need to take from U.S.A. Sherman law is criminalizing of cartel activity U.S.A, Australia and many more countries across the globe have criminalized working of a cartel we need to do that because a cartel hampers the growth of a developing nation like India. Another reason for emphasizing on the US model, as part of this report is that the US DOJ stresses heavily on the use of enhanced investigation tools and processes in order to Effectuate successful detection of cartels. The drafters of Sherman Act were mindful of this and Therefore clearly intended to inculcate effective institutional arrangements and enforcement tools That is generally not available to their counterparts elsewhere in the world. This is one of the major reasons that despite there being in place an attractive antitrust Statute in many jurisdictions including India, the competition authorities generally are faced with A comparatively daunting task while detecting cartels. An important point to cogitate upon is that the civil and criminal enforcement functions the US were combined in the hands of the Attorney General after the enactment of the Sherman Act in 1890. This kind of arrangement is not common in rest of the other jurisdictions. Accordingly, the DOJ Antitrust Division is self-empowered to make its own prosecution Decisions and there is no prerequisite of the local US Attorney to refer the case to a jury or bring It in his own jurisdiction. Elsewhere in the world, the responsibilities for enforcement of civil and criminal cartel Penalties are entrusted with separate bodies. Generally, the civil enforcement and investigational Responsibilities are vested with administrative agency, whereas the responsibility for bringing a Criminal case lies with the public prosecutor’s office. This segregation of responsibilities might. Have some significant consequences. The most important being the dilution of the competition. Agency’s influence vis-à-vis the corporations likely to involve in cartel activities. The obvious Implication of this would be that these public prosecutors would be likely to be more cautious in Bringing criminal sanctions against antitrust conspiracies – given the higher standard of proof, Unfamiliarity with competition law issues, other priorities. If hard-core cartels are considered truly criminal in nature and treated at par with other Criminal offences, then it is crucial that the investigators should be given appropriate tools to Detect and prosecute these criminal activities. Therefore, if these hard core infringements are to be dealt with in the same manner as Other crimes as theft and fraud, it is imperative that the powers to investigate that are usually Available with the police need to be given to the investigating authority in the Commission to Successfully detect these infringements. Since cartel agreements are usually carried out secretly, there is hardly any evidence Available that a crime has been committed. Such crimes can therefore relatively be carried out Perniciously. There is hardly any concern about the outcome of the investigation since the crime May not be detected at all in the first place and therefore never be investigated. This is essentially the underlying objective that such hard-core anticompetitive practices Require rigorous investigation tools in order to maintain a closer scrutiny of the offence being Carried out. Some of the essential features of investigation procedures that need to be revisited With having special regard to discovering cartel offences have been discussed briefly hereunder:[8]


(a) General Powers of Search and Seizure

For any investigation to be carried out effectively, it is absolutely essential to provide the Investigating agency with powers of search and seizure. Evidence is required to connect a Suspect with the commission of an offence. In the case of hard-core cartels, evidence could be in The form of documents such as minutes of meetings, e-mails, diary entries etc. An examination of Scene of crime is the greatest hub in order to collect such evidence. For instance, meeting Between the “competitors” could have taken place at hotel rooms and the records of the bookings Of these rooms might be useful in proving that the meetings actually took place. In order to ensure that the evidence is not tampered with, it is important that the Investigating authority is given certain powers with respect to search and seizure. For e.g. the Investigating authority should be given the power to conduct unannounced searches. This should Be done in order to minimize the opportunity to destroy the evidence and the possibility to Interfere with witness. With respect to seizure of documents, the investigating authorities should Be given the power to seize original physical documents and also documents from electronic Sources of storing including computers, telephones, and portable tablets. The information sought From these devices will help them uncover plethora of secret information with respect to any ongoing or potential cartels.

(b) Power to Search Private Homes

According to the Irish Competition Authority, individuals play a pivotal role in the Commission of cartel offences. It is in fact the individuals who are running the corporate Undertaking involved in any anti-competitive practice. Therefore, according to the authority, These individuals who act as facilitators in the cartel offence ought to be prosecuted equally for. Abetting the price-fixing crime.

In order to establish the liability of these individuals, it is necessary that the investigating Authorities are vested with the powers to search their private homes. These searches could be an Equally enriching source of evidence in cartel detection investigations. It is safe to assume that if Such searches would not be allowed, conviction of some individuals would not be carried out. Owing to lack of coherent evidence. However, it should also be borne in mind that such searches should only be carried out in Exceptional circumstance. That is to say when there are reasonable grounds of suspicion about The individual having been part of the alleged activity or about the evidence being available at That premises.

(c) Powers of General Detection

Apart from the abovementioned techniques, there are many other aspects that are Essential while conducting a criminal investigation. These can vary from taking witness Statements to interviewing suspects. The Investigating Authority might at times need to gather Information from secondary sources such as telephone companies (in order to obtain evidence of Telephone records between suspects), banks (in order to keep track of financial records of the Suspects). Proactive investigation techniques such as electronic surveillance in the form of wire Or phone tapping could also be deployed although doing this might invoke certain constitutional issues.[9]


Though cartel is not a famous topic yet it was an interesting piece to work on. Cartel can be detected if CCI try to make stricter norms for penalties and easier form for their detection this will not only save the economy from business tycoons. CCI should be vested with more power so that they can charge a heavy penalty on running and operational cartels; moreover they should investigate research for a cartel with more stringent ways. Lastly and most importantly a mixture of eminent economists and lawyer’s should work together in making cartel and competition laws more powerful in India. It is well to recognize that in fighting cartels, what is important is strong investigative machinery, supported by mutual assistance agreements with other countries in investigating such organizations and sharing information of the operations of cartels. The European community is a good example in combating cartels through, among other tools, severe fines.






























* DamodaramSanjivayya National Law University

[1] P RamanathaAiyar ,Concise law Dictonary170(Lexis NexisButterworthsWadhwa, Nagpur)

[2]Cartels only have negative impact upon the consumers benefit  , Available at: (visited on 25 august 2013)


[3]Karan gupta, “Anti cartel enforcement”, 3CLC25 (2012).


[4] Issues of Cartels , Available at: Visited on 26 august 20123)


[5]  Cartels , Available at: ( Visited on 26 august 2013)


[6] T Ramappa ,Competition Law in India(Oxford india paperbacks)

[7] U P Mathur ,Guide to competition law, 570(Lexis NexisButterworthsWadhwa, Nagpur)

[8]Kush Makkar, Combating Cartels in India (2013) (Unpublished Ph.D. dissertation, Jindal Global law


[9]Heating Oil, Ford Car Dealers and Citroën Car Dealers cartel cases, the Irish Competition Authority uncovered

evidence that meetings of all three cartels had taken place in numerous hotels throughout the State. In the Heating

oil case, evidence available


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