Incentivise companies that put in place systems and processes to ensure compliance with the norms spelled out in the Competition Act,2002,and consider it as a factor before deciding the quantum of penalty,India Inc has told the parliamentary panel examining the amendments to competition laws.
The idea to put in place a structure in every listed company which then aligns the company’s activities with the competition laws was first floated by Ashok Chawla,chairman of the Competition Commission of India (CCI),in his meeting with chief executives of leading companies in December.
However,the Confederation of Indian Industries (CII) has recommended the inclusion of incentives to enterprises for instituting competition compliance programmes as part of its suggestions to the parliamentary standing committee on finance,which is reviewing the Competition (Amendment) Bill,2012.
In a statement,the CII said the commission should consider framing penalty guidelines which could include existence of compliance programmes as a mitigating factor while calculating fine on an infringing enterprise.
This requires immediate attention so that the Indian industry is assured that the Competition Commission of India will consider the competition compliance programmes put in place by companies,before determining penalties,as is the practice in most countries, CII director general Chandrajit Banerjee said in a statement.
The CII said the creation of a compliance system will provide enterprises the advantage of enabling early detection of violation and help India Inc take preventive steps.
Incentives for creating such a system by the CCI will also help companies avoid fines or mitigate the level of fines,apart from pre-empting the possibility of concluding potentially void agreements and reduce costs and negative effects of litigation and regulatory intervention.
The commission,which keeps a tab on unfair business practices in the market place,has in recent times imposed substantial penalties on various companies and trade associations for violation of competition rules.
The CII observed that Indias Competition Act is silent on how competition compliance systems may help a firm reduce the quantum of fines.
There are no provisions under the Competition Act and its allied regulations which set out the criteria that are to be taken into consideration while deciding on the quantum of fines to be imposed on entities which have infringed the competition law, it said.
One of the suggestions is the CCI should consider laying out guidelines on a competition compliance programme.