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Monday, March 22, 2010

Understand when lesser penalty of 100%,50% & 30% may be levied under Competition Act Regulations

Understand CCI (Lesser Penalty)

Regulations, 2009

Regulation 2(1)(b): “applicant” means an enterprise, who is or was a member of a cartel and submits an application as per Schedule for lesser penalty to Competition Commission of India (CCI);

Regulation 2(1)(h): “priority status” means the position of the applicant marked for giving the benefit of lesser penalty in the queue of the applicants;

Regulation 2(1)(i): “vital disclosure” means full and true disclosure of information or evidence by the applicant to CCI, which is sufficient to enable CCI to form a prima-facie opinion about the existence of a cartel or which helps to establish the contravention of the provisions of section 3 of the Act.

Regulation 3. Conditions for lesser penalty. – Applicant shall,

(a) cease to have further participation in the cartel from the time of its DISCLOSURE;

(b) provide VITAL DISCLOSURE in respect of violation u/s.3 of the Act;

(c) provide all RELEVANT INFORMATION, documents and evidence as may be required by CCI;

(d) CO-OPERATE genuinely, fully, continuously and expeditiously throughout the investigation and other proceedings before the CCI; and

(e) NOT conceal, destroy, manipulate or remove the relevant documents in any manner, that may contribute to the establishment of a cartel.

The discretion of CCI, in regard to reduction in monetary penalty under these regulations, shall be exercised having due regard to –

(a) the STAGE at which the applicant comes forward with the disclosure;

(b) the EVIDENCE already in possession of the Commission;

(c) the QUALITY of the information provided by the applicant; and

(d) the entire FACTS and circumstances of the case.

Regulation 4. Grant of lesser penalty. – CCI may decide in the following manner,

(a) The applicant may be granted benefit of reduction in penalty [ONLY IF no other applicant has been granted such benefit by CCI] UPTO 100%, if the applicant is the first to make a vital disclosure,

  • enabling CCI to form a prima-facie opinion regarding the existence of a cartel and CCI did not, at the time of application, have sufficient evidence to form such an opinion:
  • in a matter under investigation and CCI, or the Director General did not, at the time of application, have sufficient evidence to establish such a contravention:
  • no other applicant has been granted such benefit by CCI.

(b) Any subsequent applicant may also be granted benefit of reduction in penalty, if CCI opines that it may provide significant ADDED VALUE to the evidence. “Added value” means the extent to which the evidence provided enhances the ability of CCI

or the Director General, to establish CARTEL as alleged. It shall be in the

following order of PRIORITY STATUS:

(i) if the applicant is marked as second, reduction may be UPTO 50% of full penalty;

(ii) the applicant is marked as third, reduction may be UPTO 30% of full penalty;

Regulation 5. Procedure for grant of lesser penalty. –

(1) an application with material information as per the Schedule, or may contact, orally or through e-mail or fax, the designated authority for furnishing the information (which may be followed by written application subsequently within 15 days).

(2) WITHIN 3 working days, the designated authority shall put the matter before CCI.

(3) CCI shall mark priority status of applicant.

(4) Designated authority shall convey the same to the applicant either on telephone, or through e-mail or fax and shall provide the written acknowledgement.

(5) The evidence will be evaluated and only then the next applicant shall be considered by CCI.

(6) CCI may accept the application on satisfaction or reject the same for want of information after giving an opportunity of being heard.

Source: No. L-3(4)/Reg-L.P./2009-10/CCI dated 13th August 2009


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