LI Network
Published on: November 01, 2023 at 00:01 IST
The Competition Commission of India (CCI) has unveiled the draft CCI (Lesser Penalty) Regulations, 2023, dated October 16, 2023, and is now welcoming input from stakeholders.
This development follows the amendment of the Competition Act in 2023, which introduced the ‘Leniency Plus Framework.’
Under the Leniency Plus program, companies that are already under investigation can provide ‘full, true, and vital disclosures’ regarding the existence of a second, previously unknown cartel to the CCI.
For the first cartel, each leniency applicant can receive a penalty reduction of up to 30%.
When it comes to second cartels, the initial applicant to make a vital disclosure may be eligible for a complete 100% reduction in penalties. Subsequent applicants, namely the second and third, may qualify for reductions of up to 50% and 30%, respectively.
“This is a significant development as, traditionally, only horizontal anti-competitive agreements between businesses engaged in identical or similar trade would be captured under the ambit of a cartel. The Amendment Act provided a statutory basis to fix liability on facilitators of cartels, and the draft regulations take that to a logical end,” commented Nitika Dwivedi, a partner at Shardul Amarchand Mangaldas & Co.
Applicants for this process can be either companies or individuals who are current or former members of the cartel. Such applications can be submitted before the CCI receives the investigation report from the Director General (DG) regarding the first cartel.
The procedures for granting Leniency Plus will follow the guidelines outlined in Schedule II of the Draft Regulations. Furthermore, applicants under the Draft Regulations will have the option to withdraw a leniency application.
It is noteworthy that CCI will exercise discretion in deciding on penalty reductions based on the quality and timeliness of the information provided by the applicant. The commission will also take into consideration whether they already possess any evidence, as well as the overall facts and circumstances of the case.
In light of these developments, stakeholders are invited to submit written comments on the Draft CCI (Lesser Penalty) Regulations 2023 within 21 days from October 16, 2023, to November 6, 2023.
