Leniency Plus: CCI issues guidance norms for India Inc

Close on the heels of Corporate Affairs Ministry (MCA) notifying the new ‘Lesser Penalty Plus’ provision, the Competition Commission of India (CCI) has issued a new regulation, along with a set of Frequently Asked Questions (FAQs) on lesser penalty regime, to enhance the understanding of India Inc on the new mechanism put in place by the government and competition watchdog.

As a new cartel-detecting tool, the ‘Leniency Plus’ regime (common parlance for lesser penalty plus) has come as a big positive development in the area of antitrust enforcement in the country. The FAQs have gone at length to explain on what Lesser Penalty Plus means, how it is different from Lesser Penalty, and who can apply for Lesser Penalty and/or Lesser Penalty Plus and for what kind of conduct.

It amplifies on the reasons why one should apply for Lesser Penalty/ Lesser Penalty Plus.  The benefits of reduction in penalty for successful applicants of the Leniency Plus programme are also illustrated in the FAQs. Interestingly, the FAQs have clarified that there is no filing fees for applying for Lesser Penalty/Lesser Penalty Plus. Also, one cannot make an anonymous application seeking Lesser Penalty.

It has also been clarified that an enterprise and its individuals may jointly apply for Lesser Penalty and/or Lesser Penalty Plus. The FAQs also delves deep into how applicants can obtain priority status, and what information needs to be provided for seeking a priority status.

CCI clarifies

The CCI has also clarified through FAQs that an application may be withdrawn by the applicant anytime before the investigation report is received in the matter from the Director General. However, the CCI is free to use the information provided by the applicant, except its admission, for the purpose of its proceedings.

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.

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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