Taking a lenient approach to leniency

Leniency programmes have been adopted by several competition authorities as the most effective tool to detect and deter cartel conduct. A study of 52 European Commission decisions adopted between 1 May 2004 and 1 May 2014 found that in 94% of cases, at least one party had applied for leniency.

In comparison to more mature jurisdictions, the domestic leniency programme is nascent. Although no filings were made in the first years of the leniency policy, there has been a steady rise in the number of leniency filings since the Competition Commission of India (CCI) issued its first decision in 2017. To date, the CCI has issued 10 decisions in which benefits under the leniency regime have been granted to disclosing parties.

The competition law framework gives wide discretion to the CCI in administering leniency, as shown in section 46 of the Competition Act, 2002, which reads as “The commission may, if it is satisfied …”. The lack of clarity in the exercise of this discretion lay behind the initial hesitation in offenders approaching the CCI under the Lesser Penalty Regulations. However, there has been an uptick in the number of leniency decisions in the past few years.

Other jurisdictions envisage varying rules for the application of leniency. Some adopt a winner takes all approach with immunity restricted to the first claimant, and with no benefit for subsequent applicants. The domestic regulatory framework, however, not only encourages first applicants to file for leniency by offering up to 100% reduction of fine, but also allows up to 50% reduction in fine to the second applicant, and up to 30% to subsequent applicants. In the Nagrik Chetna case, the CCI granted reductions in penalty to four leniency applicants.

Karan Chandhiok is a partner and Ruchi Khanna is an associate at Chandhiok & Mahajan.

Chandhiok & Mahajan
C-524, Defence Colony
New Delhi – 110 024
India

Mumbai | Bengaluru
Contact details
Tel: +91 11 4163 0033
Fax: +91 11 2433 9075
Email: office@chandhiok.com