CCI should not adopt stringent approach to leniency applications: Experts

Fair trade regulator Competition Commission should not adopt "stringent approach" while dealing with leniency applications from those who come forward to provide information about cartels, say experts.

The Competition Commission of India (CCI) recently passed its third leniency order in Nagrik Chetna Manch vs Fortified Security Solutions and Others.

However, in the present order, the CCI has adopted a more stringent approach with respect to leniency applications, said L Badri Narayanan, Partner Lakshmikumaran & Sridharan Attorneys.

The present order, according to him, is "ideologically contrary to CCI's other orders in wherein the CCI had reduced the penalties of all notwithstanding the fact that information/ evidence on cartel furnished by two of the applicants did not result in 'significant value addition'.

Diljit Titus, Managing Partner, Titus & Co, said the leniency provisions have been in use in the US for long time where the fine depends upon the severity of the case.

"In case of India, the CCI should adopt a structured approach to encourage reporting about cartels as well as ensure compliance of the competition laws," he said.

A leniency scheme was introduced in the Competition Act, 2002 and Competition Commission of India (Lesser Penalty) Regulations, 2009, to help in detection and investigation of cartels.

In the Nagrik Chetna Manch, operators had filed applications for lesser penatly. The CCI reduced the penalty by 50 per cent in case of two operators, 40 per cent in case of one. It also reduced the penalty by 25 per cent for yet another operator. The remaining two operators were not given shown any leniency in penalty.

"The rationale behind introducing leniency programmes was to encourage parties to the cartel to disclose information regarding the same.

"However, CCI through this order has made it clear that any delay in filing of the leniency applications will not be appreciated or entertained by the CCI," opined Narayanan.

In fact, it will lead to a negative presumption against the applicants, he added.