Lord Denning observed, “People who combine together to keep up prices do no shout it from the house tops. They keep it quiet. They make their own arrangements in the cellar where no one can see. They will not put anything into writing nor even into words. A nod or wink will do”. Cartels are agreements between enterprises that work in secrecy and aim to exploit market power and disrupt free and fair competition in the market. Since cartels are so bad for an economy, it becomes imperative to have a system in place so as to keep them in check. This is where the Leniency Programme i.e. The Competition Commission of India (Lesser Penalty Regulations) 2009, steps in. The Leniency Program helps to detect these cartels as they provide incentives in the form of reduction in the grant of penalty to the cartel members, in case they come ahead and disclose the existence of the cartel. It can be said to be a type of whistle-blower protection, wherein the members are given benefit in the form of reduced penalty if they come ahead and give full, true, and vital disclosure/ information about the cartel.
This paper aims to study the Leniency Program in India in detail while further critically analyzing the loopholes present in the same. The Leniency Regulations were amended in 2017, the same amendments shall be discussed and their impact and success/failure shall also be analyzed in the paper. There is a presence of a lot of vague concepts in the regulations, like the usage of the term “added value” when it is not clear what added value includes. Another is the usage of the term “may be” instead of “shall be” for grant in reduction of the penalty, which makes the regulations less certain and goes against the very purpose for which the regulations were enacted. It gives undue discretionary powers to CCI to decide the quantum of penalty to the leniency applicants. The same shall be discussed and analyzed along with a way ahead to solve them in form of recommendations and suggestions.