The Competition Commission of India (Lesser Penalty) Regulations, 20091 have been published in the official gazette. These regulations are the Competition Commission of India’s (CCI) version of the successful leniency programs in the United States and Europe. A key difference with the US and EC model is that ringleaders are not expressly denied the opportunity to make a claim for the 100 percent penalty reduction. The provisions of the Competition Act, 2002 (CA 2002) relating to anti-competitive agreements and prohibition of abuse came into force on 20 May 2009.
Reduction in Fines
Depending on the time of submission of the application and the nature of evidence provided, an applicant could be entitled to a reduction in penalty of 30, 50 or even up to 100 percent.
An applicant would be entitled to a reduction in penalty of up to 100 percent (total immunity) if it is the first to make a vital disclosure:
(i) enabling the CCI to form a prima-facie opinion regarding the existence of a cartel; or
(ii) in a matter under investigation that enables the CCI or Director General to prove the cartel infringement.
Subsequent applicants would be marked as second and third in the priority status and may be granted a reduction of penalty of up to 50 or 30 percent respectively, if the information would provide significant added value to the evidence already in possession of the CCI or Director General.
Procedure for Reduction
The CCI would mark the priority status of the applicant after receipt of an application with material information. Information can be conveyed orally, through email or by fax which would make the applicant eligible for a claim of priority status provided a written application with all information is made within 15 days.
Recent press reports suggest that the government of India has initiated the process to notify the provisions of the CA 2002 dealing with mergers and acquisitions.
Corporations in the United States, Europe and other interested stakeholders with operations in India, or those interested in setting up operations there, are already following the developments of this regime and engaging with the government in consultations with regard to concerns they have about the regulations.
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1. Full text of The Competition Commission of India (Lesser Penalty) Regulations, 2009 is available at: http://www.cci.gov.in/images/media/Regulations/regu_lesser.pdf