Oct 27, 2023

CCI Introduces Draft Regulations on Lesser Penalty

When the Competition (Amendment) Act, 2023 (‘Amendment Act‘) was introduced earlier this year, it introduced various new provisions including ‘lesser penalty plus’ regime in the existing leniency framework of the Competition Act. The ‘lesser penalty plus’ model allows a leniency applicant to provide ‘full, true and vital’ disclosure with respect to an undisclosed cartel to obtain additional benefit of grant of lesser penalty with regard to both, the first cartel and the newly disclosed cartel.

On October 16, 2023, the CCI published draft regulations[1] on lesser penalty to incorporate and implement these amendments into the CCI’s existing leniency framework. The draft regulations aim to provide regulations on the procedure for grant of lesser penalty and ‘lesser penalty plus’ (including the form, contents, procedure, and withdrawal of application).

The two key amendments introduced in the draft regulations are:

Expansion of Definition of ‘Applicant’: The Amendment Act expanded the scope of a cartel to include entities involved at different levels of a value chain (i.e., non-competing entities) participating or intending to participate in a horizontal agreement. In line with this, the CCI has also expanded the scope of an applicant (i.e., an entity that can approach the CCI with ‘full, true, and vital’ disclosures of a cartel) to an enterprise/ person or their associations if it/they participate or intend to participate in the furtherance of such cartel, even if they are not engaged in identical or similar trade.

‘Lesser Penalty Plus’: According to the draft regulations, an applicant that’s already made ‘full, true, and vital’ disclosure of a cartel (‘Cartel 1’), may be entitled to receive additional reduction in monetary penalty if they also provide ‘full, true, and vital’ disclosure regarding another cartel such that it allows the CCI to become aware of a newly disclosed cartel (‘Cartel 2’). If these requirements are met, the applicant is entitled to receive: (i) up to 100% reduction in penalty regarding Cartel 2 (this is consistent with the existing leniency regulations); and (ii) up to 30% reduction in penalty regarding Cartel 1.

The CCI has invited stakeholders to submit their written comments to these regulations no later than November 06, 2023. Notably, the CCI has also published draft regulations inviting stakeholder comments to incorporate other amendments[2] in the Amendment Act.

[1] The Competition Commission of India (Lesser Penalty) Regulations, 2023.

[2] Please see our Client Alerts on these amendments at: Draft Regulations on Offering Antitrust Commitments and Settlements in India and CCI Publishes Draft of Revised Combination Regulations for Public Consultation.




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