The draft rules allow the Competition Commission of India to reduce the penalty it imposes on companies in cartels if they also come forward with information about others.
Taking forward the recently enacted amendments to the Competition Act, the Competition Commission of India (CCI) has released draft regulations on lower penalty as part of the leniency plus regime. The provisions are aimed at incentivising persons or cartels already under scrutiny to provide information about other cartels the regulator does not know about.
A significant aspect of the draft regulations is that in addition to business enterprises and their individuals, it has said that trade associations may also apply for leniency.
The Competition Act already had a provision, Section 46, that allowed it to impose lesser penalties on whistleblower companies that were part of a cartel if they “made a full and true disclosure in respect of the alleged violations and such disclosure is vital”. This will now be bolstered by the “lesser penalty plus” system, if the new rules are finalised.
Under new rules, a person who has already applied for a lesser penalty with respect to one cartel will be incentivised to provide more information about a second cartel. The reduction in monetary penalty could be as much as 30 per cent in case of the first cartel and 100% in case of the second cartel.
Significantly, the draft regulations have also promised complete confidentiality by the CCI and its Director General about the identity of the applicant as well as the information disclosed.
The draft regulations attempt to expand the reach of the leniency programme with the aim of enabling the CCI to bust more and more cartels or bid rigging cases, an expert said. A leniency plus regime is already prevalent in many other countries including the UK, US and Singapore.
The regulator has sought public comments by November 11.
Earlier, CCI Chairperson Ravneet Kaur noted at the 8th BRICS International Competition Conference held in New Delhi that leniency programs are wider tools for uncovering and dismantling cartels by incentivising self-reporting and cooperation.They illuminate the secretive operation, provide critical insider information and enable swift action against anticompetitive activities.
“Continuous improvement and adaptability in leniency programs is essential for us to keep evolving as the cartels change their tactics over time,”
stressed CCI Chairperson.
Source: Business Today
