Competition Commission announces leniency for those giving information on cartels
The Competition Commission said leniency will be shown to those companies and individuals coming out with information on cartels and anti-competitive agreements while protecting their identification
New Delhi: Encouraged by the general response on its Rs6,300-crore penalty in the cement cartel case, the Competition Commission of India (CCI) on Tuesday said leniency will be shown to those companies and individuals coming out with information on cartels and anti-competitive agreements, reports PTI.
"It is right time that we reach out to people and encourage them to come out with information on more cartels," said Ashok Chawla, Chairman, CCI.
Pointing out the Competition Act provides for 'leniency programme' for those who help CCI tackle the 'pernicious practise of cartelisation', Chawla said: 'nobody has used it so far'.
Just last month, the CCI slapped a hefty Rs6,307-crore penalty on 11 cement companies, including ACC, Ambuja Cements, Ultratech and Jaiprakash Associates for price cartelisation. The fine was fixed at 50% of their profit during 2009-10 and 2010-11.
While the order drew flak from cement companies, which plan to appeal before the Competition Appellate Tribunal (COMPAT), the CCI has largely been welcomed for the bold step.
In an advertisement in major newspapers today, the CCI announced a leniency programme 'for enterprises/individuals who disclose their role in a cartel and co-operate with subsequent investigations'.
CCI also assured the identification as well as information obtained would be kept confidential.
"In the advanced jurisdictions, cartels are prosecuted based on evidence obtained through leniency provisions... evidence of meetings, phone calls, and other mechanisms."
"...Exchanging information is more substantial than relying on economic and circumstantial evidence..A whistle blower can provide documented evidence," said Ram Tamara, Director, Nathan Economic Consulting India.
He added that in the case of the European paraffin wax cartel, five wax producers had applied for leniency and provided details on cartel meetings and other communications.
As a result, he said, the European Commission got evidence enough to establish that a cartel operated for over 10 years.
Senior advocate and competition law expert OP Dua said "The CCI needs to device guidelines for the the leniency programme on the lines of OECD's guidelines on fighting cartels and leniency programmes".
The CCI, which became fully functional in May 2009, is empowered by an Act of Parliament to take up cases relating to violation of section 3 and and 4 of the Competition Act, pertaining to anti-competitive agreement and abuse of dominant market position, respectively.