In an industry-friendly move, the Competition Commission of India (CCI) will soon roll out draft regulations on “Leniency Plus” programme —a new cartel detecting tool —that would encourage companies already under investigation for one cartel to report other cartels unknown to the competition regulator.

The “Leniency Plus” regime was part of the Competition (Amendment) Act 2023, which received Presidential assent in April this year.

The proposed draft “Leniency Plus” regulations will come on the heels of CCI rolling out draft norms for “commitment and settlement” and separate norms for comprehensive changes in the Combinations regulations.

Also Read | Competition law infringements: CCI to issue norms for stricter penalties 

A leniency plus regime is expected to further incentivise applicants to come forward with disclosures regarding multiple cartels, thereby enabling the CCI to save time and resources on cartels investigation. This will result in faster market corrections, experts said.

CCI’s experience of enforcing leniency regime has been encouraging. Now the competition watchdog is moving one step ahead with the introduction of “Leniency Plus” programme.

This “leniency plus” regime is already recognised in jurisdictions like the UK, US, Singapore and Brazil.

It remains to be seen as to how the regulations for “Leniency Plus” would finally get fashioned in India. 

Since leniency doesn’t offer protection against damage claims by third parties, it remains to be seen if leniency plus will remain as attractive once the private damages regime develops fully, experts noted.

WHAT IS LENIENCY PLUS?

The current Competition Act 2002 already has a leniency programme, which allows companies that provide sufficient information about a cartel in which they have participated to receive partial immunity from penalty. Such a programme helps competition authorities to discover secret cartels and to obtain insider evidence of the infringement. 

Under the existing leniency (lesser penalty rule) framework, CCI may impose a lesser penalty on a person involved in a cartel if such person has made a full and true disclosure in respect of alleged violations and such disclosure is vital.

Now the Indian authorities are going one step further through the proposed introduction of “Leniency Plus” programme.

Under ‘Leniency Plus’, a cartelist who is cooperating with CCI for leniency, can disclose the existence of another cartel in an unrelated market in the course of original leniency proceedings in exchange for an additional reduction in penalty.

Leniency Plus is a proactive antitrust enforcement strategy 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 that would entail from such disclosure is reduction of penalty in the first cartel to the person disclosing the information, without prejudice to the company obtaining lesser penalty regarding the newly disclosed cartel.

Leniency programmes play an instrumental role in assisting competition authorities in detecting, investigating and prosecuting hard-core cartels. 

Cartels are recognised as the most egregious violation of competition law and accordingly, it has been the focus of competition enforcement. 

It is indisputable that competition authorities face significant obstacles in detecting and prosecuting cartels since they operate under a cloak of secrecy. With a view to dealing with such challenges, most jurisdictions have developed leniency programmes. 

While the Competition Act provides a framework for CCI to deal with leniency/ lesser penalty applications, it till recently did not recognise leniency plus. 

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