The Competition Commission of India (CCI) has announced draft regulations under the 'leniency-plus' regime. Under this regime, enterprises that are already under investigation for being part of a cartel would be encouraged to proactively expose other cartels in which they are participating.
According to analysts, if the proposed regulations are approved, the regulator may lessen a company's fine for involvement in the first cartel by up to 30 per cent in addition to reducing it by up to 100 per cent for involvement in the newly revealed cartel, according to a report by ET.
Nevertheless, the draft regulations stipulate that among other requirements, the corporation must provide the CCI with "genuinely, fully, continuously and expeditiously throughout the investigation and other proceedings" and share critical information about the cartels.
Penalty reduction will be at the discretion of the CCI. Its judgment will be based on a number of variables, such as the applicant's disclosure stage, the caliber of the material submitted by the application seeking leniency, and the proof that the regulator already has.
The possibility that the regulator would discover the recently revealed cartel on its own will also be evaluated by the CCI. "...the Commission shall have due regard to all relevant factors that distinguish the newly disclosed cartel from the existing cartel," the proposed regulations state.
By November 6, stakeholders are asked to provide feedback on the Draft CCI (Lesser Penalty) Regulations, 2023, to the regulatory body.
The draft regulations also provide for a penalty reduction of up to 100 per cent for the person who brings the first critical information related to a cartel bust. The number goes to 50 and 30 per cent for the second and third applicant.
A cartel exists when businesses collaborate with each other instead of competing. Cartels deceive customers and other businesses. They are an impediment to healthy economic growth. Cartels are also known to drive up costs and reduce innovation and investment into a certain sector.