In a recent Cartel Capers post, I wrote about the first instance where the Competition Commission of India granted 100% immunity from a fine under the CCI’s leniency provisions (here).  Below is some additional important information on the case provided by the New Delhi, India Iaw firm of Luthra & Luthra.

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Luthra & Luthra Guest Post:  CCI on leniency[1]

In its second decision based on a leniency application, the CCI held Eveready Industries, Indo National, and Panasonic Energy India Co. guilty of cartelizing in the market for dry cell batteries along with the Association, which was found to facilitate the cartel. Complete immunity from the fine was granted to Panasonic (and the six employees found to be involved), being the first leniency applicant,[2] and based on which the investigation was opened. The office of the Director General of Investigation carried out raids on the premises of all three companies. Following the raids, Eveready and Indo National also decided to file leniency applications, in that order, shortly after the raid. The Association, for some odd reason, decided to contest the charges.

Since all the manufacturers applied for leniency, the tussle was mainly for securing the maximum reduction in penalty possible based on the nature of their respective disclosures and the vitality of the evidence presented. With respect to Eveready and Indo Nat, the Commission observed that the evidence seized by the DG during the dawn raid was independently sufficient to establish the cartel and the additional evidence submitted by them post the raid did not result in ‘significant value addition.’  However, considering they had provided genuine, full, continuous and expeditious cooperation during the course of investigation, the CCI granted Eveready (and their office bearers) a reduction of 30 per cent and Indo National (and their office bearers) a reduction of 20 per cent in the total leviable penalty. The Association of course received no such reduction.

The big negative – the CCI discloses a disturbing amount of detail in its order, including the names of the certain customers; description of specific pieces of evidence such as emails, their senders and recipients, dates and contents; and the extent of overcharge.

Confidentiality is of extreme importance to leniency applicants who run the risk of follow-on civil damages claims and reputational loss. Without broad and robust confidentiality protection, potential leniency applicants may be deterred from coming forward to report cartel activity. Publishing details as the CCI has done could potentially attract numerous claims, which in-turn would act as a huge disincentive for future applicants seeking leniency. This is more so for global cartel participants, who may face claims not only in India but in other jurisdictions.

Third party access to leniency documents is another sensitive topic and it remains to be seen whether, and to what extent, the CCI will allow access to potential claimants.

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[1] This post does not constitute legal advice.  Should you require any assistance or clarifications, please feel free to contact the Competition Law Team at [email protected] or any of the contacts listed alongside. CONTACTS: Gurdev Raj Bhatia, Partner – Head Competition Law; Abdullah Hussain Partner; Kanika Chaudhary Nayar, Partner.

[2]  Under Section 46 of the Act and the CCI’s Lesser Penalties Regulations, 2009.