India Notifies Leniency Plus System to Crack Down on Cartels

India Notifies Leniency Plus System to Crack Down on Cartels
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The leniency plus system for detecting cartels under the recently amended competition law came into force in India on 20 February, stated the Ministry of Corporate Affairs.

In India, the Lesser Penalty regime/LPR entails a reduction in the penalty imposed by the CCI for the contravention of specific provisions within the Competition Act, 2002. This reduction serves as an incentive for violators to voluntarily disclose information, documents, and evidence related to cartel conduct, in exchange for a decreased penalty.

Under the Leniency Plus provision, an applicant with an existing Lesser Penalty application who provides full, truthful, and crucial disclosures regarding the presence of a second cartel may qualify for an additional reduction in monetary penalties of up to 30 percent for the first cartel. Moreover, the applicant may receive a penalty reduction of up to or equal to 100 percent for the newly disclosed cartel.

The penalties imposed by the CCI can be substantial, reaching up to 10 percent of turnover or income for the last three financial years, or even higher multiples in cartel cases.

The draft rules were published by the Competition Commission of India (CCI) in 2023 following the enactment of amendments to the Competition Act.

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 earlier an application for Lesser Penalty is filed, the higher its Priority Status and the greater the potential reduction in penalty. Similarly, since Lesser Penalty Plus benefits are granted to only one applicant per newly disclosed cartel, early application enhances the chances of availing such benefits.

Similar leniency programs exist in many countries, including Singapore, the US, the UK and Brazil.

Sources: PaRR, India Briefing

India 

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