Answer ... Yes, there is a leniency programme in India. According to Section 46 of the Competition Act, the Competition Commission may impose a lesser penalty if an enterprise engaged in a cartel makes a full and true disclosure to establish a violation of Section 3 of the act. However, leniency cannot be granted in cases where the leniency application is made after the director general has submitted the investigation report to the commission.
The Competition Commission of India (Lesser Penalty) Regulations, 2009 lay down the provisions which govern the leniency programme. Any enterprise which is a part of a cartel can approach the commission with a leniency application admitting its participation in the cartel. Individuals for whom a lesser penalty is sought should also be mentioned in the leniency application.
The essential conditions to qualify for a lesser penalty are as follows:
- stopping participation in the cartel unless otherwise directed by the commission;
- providing vital disclosure;
- providing all evidence required by the commission;
- cooperating fully, continuously and expeditiously with the commission; and
- not concealing or manipulating any evidence.
Answer ... The Competition Commission may grant a penalty reduction of up to 100% to the first leniency applicant that makes a ‘vital disclosure’ by submitting evidence which helps to establish a contravention of the Competition Act. Subsequent applicants that provide ‘significant added value’ to the evidence are granted penalty reductions of up to 50% (second applicant) and 30% (third and subsequent applicants).
The commission will consider the following factors when deciding on the reduction:
- the stage at which the leniency application is filed;
- the evidence already in the possession of the commission;
- the quality of the information provided (added value); and
- the entire facts and circumstances of the case.
Answer ... The key steps involved in a leniency application are as follows:
- Approach the Competition Commission to furnish evidence in relation to a cartel. This can be done orally, or by fax or email.
- File a marker letter to mark the priority status.
- File a detailed leniency application with all evidence in writing within 15 days of filing of the marker letter (unless additional time has been granted by the commission).
- Respond to various information requests of the director general during the investigation.
- Continue to cooperate with the commission and add value to the investigation by providing any new evidence not included in the leniency application.
At the end of the process, based on the cooperation or evidence provided, the commission will decide on the quantum of penalty, including any lenient treatment, which should be granted to an enterprise or individual.
Answer ... A leniency applicant has the right to:
- approach the Competition Commission orally, or by fax or email, to furnish evidence on a cartel and to mark the priority status before filing a detailed leniency application in writing;
- receive a written acknowledgement of receipt of the application along with priority status;
- know whether the leniency application has been accepted or rejected;
- be heard before the leniency application is rejected; and
- claim confidentiality on its identity and information, documents and evidence submitted as part of the application.
A leniency applicant has the obligation to:
- cease its participation in the cartel unless otherwise directed by the commission;
- provide vital disclosure in respect of contravention of Section 3 of the act;
- provide all relevant information, documents and evidence as may be required by the commission;
- cooperate genuinely, fully, continuously and expeditiously throughout the investigation;
- not conceal, destroy, manipulate or remove documents that may contribute to the establishment of a cartel;
- provide the names of individuals who have been involved in the cartel on its behalf; and
- comply with any other conditions imposed by the commission.
Answer ... The leniency programme is also open to individuals. There is no separate programme for individual whistle-blowers.
Employees and former employees can benefit from a leniency application filed by their employer. If the applicant is an enterprise, the leniency application must mention the names of individuals involved in the cartel on its behalf and for whom a lesser penalty is sought.
Answer ... Yes, a leniency application can be rejected by the Competition Commission if any of the conditions to qualify for a lesser penalty are not complied with by the applicant. However, the commission must give the applicant an opportunity to be heard before rejecting the application. If a leniency application is rejected, the commission is free to use the evidence provided by the applicant to establish a violation of the act.