Full penalty waiver for ‘cartel’ whistle-blowers

Anti-trust or competition regulators worldwide have a tough task nailing down cartels since there is little information available in the nature of written agreements between companies that indulge in such behaviour. The leniency provisions,which empower the regulator to waive penalties on whistle-blowers,have come handy for regulators in other jurisdictions in the recent past.

According to regulations notified by the CCI mid-August,even whistle-blowers subsequent to the first applicant would be exonerated up to or equal to 50 per cent of the full penalty if they provide information. Such information must add value to evidences already in possession,the regulations for lesser penalty say.

The lesser penalty provisions would encourage companies to provide vital and true information to the competition watchdog and help it form prima facie opinion in the case,an official said. The whistleblower would have to,however,cooperate till the final proceedings,he added.

The persons seeking benefit of lesser penalty under Section 46 will have to give vital information,documents,evidences to the CCI and also cease to further participate in the cartel from the time of disclosures.

Vital information is defined as full and true disclosure of evidence,sufficient to enable the commission to form a prima facie opinion about the existence of a cartel.

The third applicant too could be granted reduction of penalty up to or equal to 30 per cent if it adds value to the existing evidences.

For seeking the benefit of lesser penalty,companies have to send all evidences relating to the existence of a cartel with an application. Unless the evidence submitted by the first applicant has been evaluated,the next applicant will not be considered by the CCI. If the commission feels that the information provided is not true and complete,it may reject the application.