Calculation of fines for cartel conduct In a decision dated October 29, 2013, the Indian Competition Appellate Tribunal has clarified the amount of fines that the Competition Commission of India ("CCI") can impose for cartel conduct. Section 27(B) of the Competition Act, 2002 gives the CCI the power to impose a fine of no more than 10 percent of the turnover for the last three preceding financial years, or of up to three times of its profit, whichever is higher.
In the case of a cartel entered into by manufacturers of aluminum phosphide tablets, the CCI imposed a fine of nine percent of the average turnover. The total turnover of the defendants was used as a basis to calculate the fine, even if the products subject to the cartel agreements only represented a fraction of their total turnover. The defendants appealed to the Competition Appellate Tribunal, which decided that the turnover achieved in relation to the products subject to the cartel should be used as a basis to calculate the fine, and not the total turnover of the company.
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