The Hindu Business Line : Amnesty proposed for ‘whistle blowers’ in a cartel

If a company which is party to a cartel breaks away and comes clean with information, there would be a leniency provision for them. – Mr Vinod Dhall

Richa Mishra
Moumita Bakshi Chatterjee

New Delhi, July 4 In a bid to incentivise ‘whistle blowers’ in a cartel, the Competition Commission of India (CCI) has proposed 100 per cent amnesty for the company which approaches the authority first with vital information on cartelisation.

Sectors such as cement, steel, tyres, shipping, and aviation have come under scanner in the past over instances and allegations of cartelisation.

Such a leniency provision would help break cartels, while protecting the interests of the company as well as the consumer.

Mr Vinod Dhall, acting Chairman, CCI, told Business Line that “in our proposed draft regulation we have provided that if a company which is party to a cartel breaks away and comes clean with information, there would be a leniency provision for them”.

The company which approaches the commission first would get cent per cent benefit for the disclosure while the second party would get 50 per cent leniency, followed by 30 per cent and 10 per cent for the subsequent ‘whistle blowers’ in a cartel. The Competition Act provided that if a company approached the commission and gave full disclosure, the entity would be eligible for amnesty which would be provided for through regulations to be laid down by the body.

The penal provision in the Competition Act for those found indulging in a cartel is currently stiff. It stipulates a penalty of up to three times of the profit or 10 per cent of the turnover whichever is higher for each year of duration of cartel, for each member. While working out the leniency provision, the commission had two issues to handle – how to deal with multiple parties coming to CCI with information on cartel, and to ensure that the amnesty is not discriminatory in nature.

A company breaking away from the cartel can e-mail to the commission on the information it holds without disclosing its identity. Based on the information, the commission will examine whether this is already available with the commission or is it a value addition. If the commission is satisfied, the informant signs an agreement with the CCI and discloses its identity.

How does the commission decide who is the first whistle blower? He said the e-mail would help in establishing the party that was first to approach the commission on the issue. Subsequent whistler blowers would have to bring new information to the table in order to get amnesty.

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