CCI launches leniency plus regime to curb cartels among companies
A leniency plus regime is already prevalent in many other countries including the UK, US and Singapore.
- Feb 21, 2024,
- Updated Feb 21, 2024 7:00 PM IST
The Competition Commission of India has introduced the leniency plus regime under which cartels of companies under scrutiny can be incentivised with lesser penalty to provide information about other cartels that the regulator does not know about.
“The ‘lesser penalty plus’ mechanism was introduced to incentivise an existing lesser penalty applicant in respect of a cartel to give full, true and vital disclosures about another cartel, hitherto not in the knowledge of the CCI,” the anti-trust watchdog said in fresh regulations.
The applicant will be eligible to receive additional reduction in penalty (as a lesser penalty plus applicant) over and above the reduction in penalty which may be given to it as a lesser penalty applicant in the first cartel. Further, the applicant would also be entitled to receive applicable reduction in penalty in respect of the second cartel as a lesser penalty applicant. “Lesser penalty plus mechanism is expected to give a much required impetus to the current lesser penalty regime in India,” said the CCI.
Neelambera Sandeepan, Partner at Lakshmikumaran & Sridharan Attorneys said the leniency regime in India has led to detection of several cartels in industries such as auto parts and alcobev to name a few, allowing companies to benefit from up to 100% waiver in their penal liabilities. “This provision has resulted in increased enforcement action in other jurisdictions such as the United States. It will be interesting to see the impact in India,” he said.
A leniency plus regime is already prevalent in many other countries including the UK, US and Singapore.
Following the Companies Amendment Act, 2023, the CCI had in October last year come out with the draft regulation on the lesser penalty plus regime.
The Commission received comments from 20 stakeholders from various disciplines. Based on the feedback and on its past experience as well as international best practices on the comments so received, certain changes have been incorporated in the Draft lesser penalty regulations 2023.
The Competition Commission of India has introduced the leniency plus regime under which cartels of companies under scrutiny can be incentivised with lesser penalty to provide information about other cartels that the regulator does not know about.
“The ‘lesser penalty plus’ mechanism was introduced to incentivise an existing lesser penalty applicant in respect of a cartel to give full, true and vital disclosures about another cartel, hitherto not in the knowledge of the CCI,” the anti-trust watchdog said in fresh regulations.
The applicant will be eligible to receive additional reduction in penalty (as a lesser penalty plus applicant) over and above the reduction in penalty which may be given to it as a lesser penalty applicant in the first cartel. Further, the applicant would also be entitled to receive applicable reduction in penalty in respect of the second cartel as a lesser penalty applicant. “Lesser penalty plus mechanism is expected to give a much required impetus to the current lesser penalty regime in India,” said the CCI.
Neelambera Sandeepan, Partner at Lakshmikumaran & Sridharan Attorneys said the leniency regime in India has led to detection of several cartels in industries such as auto parts and alcobev to name a few, allowing companies to benefit from up to 100% waiver in their penal liabilities. “This provision has resulted in increased enforcement action in other jurisdictions such as the United States. It will be interesting to see the impact in India,” he said.
A leniency plus regime is already prevalent in many other countries including the UK, US and Singapore.
Following the Companies Amendment Act, 2023, the CCI had in October last year come out with the draft regulation on the lesser penalty plus regime.
The Commission received comments from 20 stakeholders from various disciplines. Based on the feedback and on its past experience as well as international best practices on the comments so received, certain changes have been incorporated in the Draft lesser penalty regulations 2023.