The Competition Commission of India (“CCI”) has also brought into effect the implementing framework for this ‘new’ leniency regime.

The new leniency regime i.e., ‘Leniency Plus’, incentivizes an applicant in an on-going case, to blow the whistle on another cartel which is unknown to the CCI, in exchange for further reductions in penalty in the existing case.

The key features of this new regime are:

Further reduction in penalty: Where a leniency applicant in the ‘first cartel’ subsequently makes a full, true and vital disclosure in respect of another or ‘second cartel’, such applicant is eligible for an additional reduction in penalty of up to 30% in the first cartel and a reduction of up to 100% in the second cartel. The full, true and vital disclosure has to be sufficient to enable CCI to make a preliminary or prima facie finding of infringement (i.e., to initiate an investigation into the second cartel).   

‘Admission’ defined: The new regime introduces and defines the term “admission” in Indian competition law, as a “statement or submission by a party that it has indulged in the alleged violation of the provisions of Section 3 of the Act”. Section 3 of the Competition Act, 2002 relates to anti-competitive agreements.

Rejection & withdrawal of application: A leniency application may be rejected if an applicant fails to: (a) provide full, true and vital disclosure; or (b) comply with the conditions for grant of leniency or leniency plus; after such applicant is granted an opportunity of being heard. An applicant may also withdraw its leniency application before the investigation report is submitted to CCI. In such a case, the CCI may still however, use the information provided by the applicant, except the admission itself.

Leniency application includes individuals The benefits of a leniency application will extend to those individuals involved in the cartel on whose behalf the application is filed. 

Confidentiality: Information, documents and evidence submitted by a leniency applicant will be treated as confidential unless (i) confidentiality is waived, (ii) disclosure is mandated by law, or (iii) there has been a public disclosure by the applicant. The investigation wing can also disclose such confidential information to other parties if necessary for the investigation, after recording reasons and obtaining prior approval from the CCI.

The Leniency Plus regime is a welcome step and adds significant strength to the enforcement toolkit of the CCI. The additional reduction of up to 30% in penalties is substantial, and should help in incentivizing and indeed encouraging industry to disclose their involvement in cartels unknown to the CCI, thereby promoting a culture of compliance. The changes brought about by the new regime bring India at par with global jurisdictions.

The CCI has also published ‘FAQs’ in relation to the new leniency regime (which are available here).

Authors: Sonam Mathur & Dinoo Muthappa – Partners and Dhruv Dikshit – Senior Associate.