MCA plans to introduce ‘leniency plus’ regime to crack down on cartels
- The Corporate Affairs Ministry (MCA) has notified the introduction of ‘Leniency plus’ regime.
Key Highlights
- It will paving the way for the Competition Commission of India (CCI) to roll out a new Cartel detecting tool that is expected to revolutionise Anti Trus lot enforcement in the country.
- Under the regime, companies under investigation for one cartel would be encouraged to report other unknown cartels to CCI.
- Such a programme helps competition authorities to discover secret cartels and to obtain insider evidence of the infringement.
What is Leniency Plus?
- Leniency plus is a proactive antitrust enforcement strategy
- It is aimed at attracting leniency applications by encouraging companies already under investigation for one cartel to report other cartels unknown to the competition regulator.
- The benefit:
- Reduction of penalty in the first cartel to the person disclosing the information, without prejudice to the company obtaining a lesser penalty regarding the newly disclosed cartel.
- While the Competition Act provides a framework for CCI to deal with leniency or lesser penalty applications, it until recently did not recognise leniency plus.
CCI draft regulation
- CCI had, in the last year, issued draft Lesser Penalty regulations.
- The draft regulations offer leniency applications in an ongoing cartel inquiry the incentive to disclose the details of another unrelated cartel.
- A leniency plus regime is expected to further incentivize applicants to come forward with disclosures regarding multiple cartels, thereby enabling the CCI to save time and resources on cartel investigation.
- This regime is already recognised in jurisdictions like the UK, US, Singapore and Brazil.
Prelims takeaway
- CCI
- Leniency plus