CCI issues draft of ‘leniency plus’ norms to curb cartelisation

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Source: The post is based on the article “CCI issues draft of ‘leniency plus’ norms to curb cartelisation” published in “Hindu Businessline” on 20th October 2023

What is the News?

The Competition Commission of India (CCI) has released draft regulations under the ‘leniency-plus’ regime.

What is a Leniency Programme?

The Leniency programme 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.

Leniency programme is provided under the Competition Act 2002.Under this, Competition Commission of India (CCI) may impose a lesser penalty on a person involved in a cartel if such person has made a full and true disclosure in respect of alleged violations and such disclosure is vital.

What is Leniency plus Programme?

Leniency plus regime was introduced in the Competition (Amendment) Act, 2023.

In this regime, a cartel member cooperating with the Competition Commission of India (CCI) for leniency can reveal the existence of another unrelated cartel during the original leniency proceedings.In return, they receive an additional reduction in penalties.

This strategy is proactive in enforcing antitrust laws and aims to encourage companies already under investigation for one cartel to report other cartels unknown to the competition regulator. 

What is Cartel?

A cartel is a collection of independent businesses or organizations that collude to manipulate the price of a product or service.

Cartels are competitors in the same industry and seek to reduce that competition by controlling pricing in agreement with one another.

Tactics used by cartels include reduction of supply, price-fixing, collusive bidding, and market carving.

The actions of cartels hurt consumers through increased prices and lack of transparency.

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