CII demands incentive measures in competition law

While there are penalties prescribed for companies scuttling competition in the current legal system, the Confederation of Indian Industry (CII) has demanded incentives to firms for instituting competition compliance programmes, in line with the practice in other countries.

In a petition to Parliament's standing committee vetting amendments to the Competition Act, CII said a culture of embedding compliance with the requirements of the competition law in business practices would bring multiple benefits. The chamber is in the process of also presenting these views to the Competition Commission of India (CCI), it said.

"This requires immediate attention so that Indian industry is assured that CCI will consider the competition compliance programmes put in place by companies before determining penalties, as is the practice in most countries," said Chandrajit Banerjee, director general, CII.

CII said there were no provisions in the Competition Act and its allied regulations which set out the criteria to be considered while deciding the amount of fines to be imposed on entities which had infringed competition law. While the Commission's Advocacy Booklet for Competition Compliance indicates that a compliance programme might help enterprises mitigate the level of fines, the Act is silent on details, the chamber said. CII cited international jurisprudence to show how competition authorities across the world had promoted competition law compliance.

It said International Competition Network countries consider existence of anti-trust compliance programmes while fixing monetary penalties for violation of competition law. Similarly, authorities in the developed world encourage companies to implement compliance programmes by granting a reduction in fines when there is a violation despite the existence of a bona fide programme.

In Australia, courts have recognised that an effective compliance programme can be a mitigating factor when assessing penalties in the event of breach of the Competition and Consumer Act. Britain's Office of Fair Trading considers existence or adoption of a compliance programme a mitigating factor. Singapore has issued guidelines on what types of programmes will be considered effective. United States Federal Sentencing

Guidelines say an effective compliance and ethics programme might reduce fines imposed. Italy and Canada also consider existence of effective programmes a mitigating factor.