India
Answer ... After forming its prima facie opinion that a prima facie case has been made out based on the information available to it (please see question 3.1), the Competition Commission of India (CCI) will direct the director-general to investigate the matter. Although the director-general is a part of the CCI, he is required to investigate the matter independently without being influenced by the prima facie opinion of the CCI. Typically, the allegations and issues raised in the prima facie opinion will be the focal point of the investigation. However, at times, the director-general may, based on additional information, identify different issues involving other contraventions of the Competition Act or the involvement of more parties in violations of a similar nature. In such a case, the director-general has the power to expand the scope of the investigation.
As part of the investigation, the director-general will issue requests for information to the parties and third parties.
India
Answer ... The director-general orders dawn raids as part of the search and seizure operations. In 2021-22, the CCI conducted three dawn raids followed by two raids in April 2022. The preconditions for a dawn raid are as follows:
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The director-general must apply to the chief metropolitan magistrate, Delhi, for a search warrant. To obtain a search warrant, the director-general must demonstrate that there are reasonable grounds to believe that the target undertaking or person would otherwise not produce the documents and is likely to conceal or remove them. The warrant authorises the officers of the director-general to:
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- enter the place specified in the warrant;
- search the location specified in the warrant; and
- seize all books and records, including electronic records, that he considers necessary for the investigation.
- Further, the director-general must ensure that at least two independent witnesses are present during the search operations.
Investigation units of the director-general conduct dawn raids and such units comprise the officers working on the investigation. Generally, the officers will search the premises of the undertakings suspected to be involved in the cartel activities; this may apply to both companies and individuals. However, if the officers have reason to believe that documents or records are kept at places other than the offices of such undertakings (eg, direct premises); in that case, they may request a search warrant for those premises too.
India
Answer ... The director-general has wide powers of search and seizure under the Competition Act. In exercising these powers, officers of the director-general may:
- enter, with such assistance as may be required, the place or places where such books and papers are kept;
- search such places;
- seize all books and papers - including electronic records such as hard disks, CDs and pen drives - which they consider necessary for their investigation; and
- take statements from any person present on the premises on oath or affirmation.
India
Answer ... While the right to consult external lawyers is not enshrined in statute, the target undertaking can consult its lawyers and request that the officers wait until counsel arrives. However, the officers are not required to do so and will often commence the raid immediately upon arrival.
The target undertaking can request to verify the identity of the officers conducting the raid and to see the search warrant. Further, the officers must provide a copy of the panchnama (a record signed by witnesses regarding the search and a list of documents/assets seized by the officers), statements and a list of the seized material to the undertaking. The undertaking also has a right to call a medical practitioner if any individual feels unwell.
The target undertaking must cooperate with the search and seizure operation.
India
Answer ... Officers of the director-general can seize any document necessary for the investigation, including both physical records and electronic documents, such as hard disks. As mentioned in question 4.3, the director-general can:
- require any person to provide an explanation in relation to any documents, books or records; and
- during the dawn raid, request any person to provide a statement, which can be used against the enterprise during the investigation.
India
Answer ... Companies that suspect or learn that the CCI has launched an investigation should take the following steps:
- Prepare an internal playbook for dealing with dawn raids which includes the steps to be taken by each employee who is expected to engage with the investigation team. These employees should be provided with a checklist for dealing with the investigation.
- Receptionists and security guards should have a directory of employees who should be contacted immediately upon the arrival of a search party. This should include the contact details of the outside counsel engaged to deal with antitrust matters.
- Identifying privileged documents in advance also helps to mitigate the risk of such documents being downloaded or seized during the dawn raid.
It is important to look at the search warrant to ensure that the search does not exceed the scope set out in the warrant (although this scope is generally exhaustive). During a dawn raid, the undertaking should cooperate with the search team. Employees can shadow the search team and should prepare a record of the records and documents seized by the search team. These records should be tallied with the panchnama shared by the search team. To the extent possible, privileged and confidential documents should be identified (only by nature and not by content), and the search team should be notified of the same.
India
Answer ... At the time of directing the director-general to initiate an investigation, the CCI will provide indicative timelines for the completion of the investigation and submission of the director-general’s report to the CCI. These timelines cannot exceed 60 days from receiving the prima facie order. However, these timelines are merely directory. A dawn raid is one of the investigation tools available to the CCI. Therefore, there is no specified timeframe within which the investigation must be completed following a dawn raid. After the dawn raid, and on the evidence gathered during the investigation, the director-general may issue summons to the parties and to certain other third parties to appear before it for a deposition.
After completing the investigation, the director-general will submit his report to the CCI. The CCI may request the director-general to provide a supplementary report if it requires more information.
The investigation report will be shared with the parties, which will be requested to provide their comments/objections to the same. The parties have the right to inspect the documents.
As per the Competition Act, the parties must file their objections within 15 days of receipt of the investigation report. However, this timeline is generally extended at the request of the parties. The CCI follows the principles of natural justice, and the parties are allowed both to make submissions in an oral hearing and to submit their pleadings in writing.
After completing any oral hearings, the CCI has three weeks to decide. This decision is made by a majority vote of the members.
As the report submitted by the director-general does not bind the CCI, its decisions must be taken by way of independent assessment.
India
Answer ... To assess cartel activity, the CCI must establish that there was an agreement (including implicit agreement) between the parties. As mentioned in question 1.1, the Competition Act identifies certain agreements presumed to cause an appreciable adverse effect on competition. Cartelisation activities fall within this presumption. The parties can rebut this presumption by proving that the agreement did not have an appreciable adverse effect on competition.
The following factors are taken into account in determining whether cartel activity has taken place are set out in the Competition Act:
- creating barriers to new entrants in the market;
- driving existing competitors out of the market;
- foreclosing competition by hindering entry to the market;
- accruing benefits for consumers;
- making improvements to the production or distribution of goods or provision of services; or
- promoting technical, scientific and economic development through the production or distribution of goods or provision of services.
India
Answer ... The Competition Act makes no provision for the settlement of cartelisation cases. A proposal on including provisions relating to the settlement of cartel cases has been made but has not yet been placed before Parliament.