India’s Competition Commission grants first immunity from cartel fines

Some nine years after obtaining competition law enforcement powers against cartels, the Competition Commission of India (CCI) has granted total immunity from penalties for the first time.

The CCI found that battery-makers Eveready, Nippo and Panasonic Energy India engaged in an eight-year cartel which resulted in a 60% increase in the price of dry-cell batteries since 2010.

Panasonic, the whistle-blower, was granted 100% immunity from penalties.  The CCI also reduced Eveready’s fine by 30% to 1.71 billion rupees (EUR21 million), and Nippo’s fine by 20% to 423 million rupees (EUR5.2 million).

The case is also reported to be the first in which the CCI has formally used its dawn raid powers.

The Competition Act 2002 provides the CCI with the power to impose lesser penalties. If the CCI is satisfied that any member of a cartel has contravened the provisions of the Competition Act, but has made full and true disclosures in respect of the alleged contraventions and such disclosures are ‘vital’, the CCI may impose a lesser penalty than that prescribed under the Competition Act.

The case is a welcome development in competition law enforcement in India and shows that the CCI is prepared to offer leniency in appropriate cases.  However, its infrequent deployment is in sharp contrast to the reliance on the policy in some other jurisdictions.  In contrast, in the EU leniency is probably the single most powerful tool that the European Commission uses to detect and enforce against cartels. 

Leniency will only be attractive if the net benefit to the company of applying for leniency exceeds the real and likely penalty. Yet there is no detailed guidance in India on the likely level of penalty or the potential size of the reduction for leniency, other than the practice that can be discerned in case law.