Answer ... India has a leniency programme for cartels. The leniency programme is governed by the CCI (Lesser Penalty) Regulations, 2009, which set out the procedure for applying for leniency and the quantum of reduction that can be granted to informants based on the priority recognised by the Competition Commission of India (CCI). In recent years, most cartel investigations have originated from leniency applications.

At present, three types of informants can apply under the leniency programme:

• applicants that are the first to make a vital disclosure that leads the CCI to make a prima facie opinion on the existence of a cartel;
• applicants that make a vital disclosure that assists the CCI in establishing the existence of a cartel during an ongoing investigation in which the CCI or the director-general had insufficient evidence to prove the anti-competitive conduct of members suspected to be part of the cartel; and
• applicants that disclose information after the above two categories of informants, but which nonetheless make significant value addition to the evidence already in possession of the CCI or the director-general that helps to establish the cartel’s existence.

Applicants in the first two categories may request a 100% penalty waiver. At the same time, applicants in the third category may also receive a specific reduction in the penalty, depending on the priority recognised by the CCI.

Answer ... As mentioned in question 5.1, leniency applicants may benefit from a reduction of up to 100% of the penalty levied by the CCI:

• The first mover may obtain a penalty reduction of 100%;
• The second applicant may receive a penalty reduction of around 50%; and
• The third and subsequent applicants may benefit from a penalty reduction of about 30%.

While the CCI generally grants a 100% reduction to the first applicant, this reduction is not a matter of right and depends on several factors, such as:

• the information already available to the CCI;
• the stage of the investigation (if the information is being provided for an existing investigation); and
• whether the information is considered a vital disclosure by the CCI.

For example, in a recent case, the first applicant for leniency received an 80% reduction in the penalty, as it had approached the CCI after the investigation had already been ordered.

One factor recently taken into account by the CCI in determining the quantum of reduction was ‘leniency plus’, where the applicant disclosed the existence of another cartel. While ‘leniency plus’ has not been statutorily recognised, the CCI considered the legislative intent (as reflected by proposed reforms to the Competition Act) to introduce leniency plus when determining the quantum of reduction.

Answer ... A leniency application begins with an informal discussion with the CCI concerning the provision of evidence on the cartel activity. This discussion can be initiated either orally or in writing by email or fax and is the first step towards securing the party’s place in the lenience queue. Based on this discussion, the CCI will revert to the applicant providing priority markers. The applicant must then provide a written application for leniency along with the required information within 15 days.

The CCI will not evaluate the information supplied by subsequent applicants until it has assessed the information provided by the first applicant. Given that the penalty reduction is directly linked to the substance and value of the information provided to the CCI, it is essential to be ranked higher in the queue so that the information supplied will be evaluated on a priority basis.

Answer ... A leniency applicant must cease its participation in the cartel activities from the date of disclosure (unless directed otherwise by the CCI). As the penalty reduction is intrinsically linked to the value of the information provided, the applicant must provide vital disclosures and relevant information or evidence directed by the CCI. Full and bona fide cooperation with the investigation is a prerequisite.

Further, the applicant must also provide the names of the individuals who have been involved in the cartel on its behalf and for whom such an applicant seeks a lesser penalty.

Generally, the identity of the applicant and the information supplied by it are kept confidential. The director-general may disclose the information shared by the applicant in some instances if such disclosure is essential for the investigation. However, the director-general must record his reasons for such disclosure in writing and seek prior approval from the CCI.

Answer ... There is no separate leniency programme for individuals. Any person (including an individual) can apply for leniency under the Lesser Penalty Regulations.

If an enterprise is filing a leniency application, it must mandatorily disclose the names of the individuals who have been involved in the cartel on its behalf.

Answer ... Yes. The CCI has discretionary powers to deny leniency if the applicant does not adhere to the leniency conditions or does not fully cooperate with the CCI.