India plans to introduce "Leniency Plus" programme, an antitrust enforcement strategy

India plans to introduce "Leniency Plus" programme, an antitrust enforcement strategy

Proposed model will encourage firms under probe to give info on groups unknown to CCI India plans to introduce a "Leniency plus" programme — a new cartel detecting tool —that would encourage companies already under investigation for one cartel to report other cartels unknown to the competition regulator.

A "Leniency plus" programme set out to encourage companies already under investigation for one cartel to report other cartels unknown to the competition regulator. India is planning to introduce this new cartel detecting tool as a part of the recent Competition (Amendment) Bill 2022 introduced in the Lok Sabha.

This "leniency plus" regime is already recognised in jurisdictions like the UK, USA, Singapore and Brazil.

Background

India already has a leniency programme under the current Competition Act, 2002 which allows companies that provide sufficient information about a cartel in which they have participated to receive partial immunity from penalty. Such a programme helps competition authorities to discover secret cartels and to obtain insider evidence of the infringement.

However, under the existing leniency (lesser penalty rule) framework, the Competition Commission of India (CCI) may impose a lesser penalty on a person involved in a cartel of such person has made a full and true disclosure in respect of alleged violations and such disclosure is vital.

Taking a step further, Indian authorities has proposed the introduction of "Leniency Plus" programme, under which a cartelist who is cooperating with CCI for leniency can diclso the existence of another cartel in an unrelated market in the course of the original lenience proceedings in exchange for an additional reduction in penalty.

This programme is aimed at attracting leniency applications by encouraging companied already under investigation for one cartel to report other cartels unknown to the competition regulator.

The benefit that would entail from such disclosure is reduction of penalty in the first cartel to the person disclosing the information, without prejudice to the company obtaining lesser penalty regarding the newly disclosed cartel.

Leniency programmes play an instrumental role in assisting competition authorities in detecting, investigating and prosecuting hard-core cartels.

An additional reform embarked upon the Competition (amendment) Bill is that leniency applicants have an option to withdraw lesser penalty applications. There are no provisions under the existing regime pertaining to withdrawal of lesser penalty application. It may happen that certain enterprises apply for a lesser penalty application at the beginning of discovery of internal documents, yet, pursuant to a detailed internal investigation, the enterprise may learn that there has been no contravention of the law.