Corporate Cartels and Leniency Programs in India

ABSTRACT

Corporate cartels are detrimental to market competition since they tend to foster practice contrary to this principle: price-fixing, market allocation, and sometimes bid-rigging. In India, such conduct is prohibited by the Competition Act, 2002. Detecting cartels is very difficult owing to their clandestine nature. Noteworthy here is the fact that to overcome this problem, the Competition Commission of India (CCI) has resorted to a Leniency Program through which a cartel member is encouraged to voluntarily reveal valuable information in return for some mitigation of penalty. Thus, the present research paper tries to crystallize the conceptual framework of cartels in India and critically assesses the leniency regime in terms of date of enactment and efficiency while delving deep into important case laws where an awarding of leniency played a pivotal role. It also draws an international comparison of India’s model vis-à-vis the best, identifies problems involved and gaps in enforcement. The paper finally suggests improvements to the leniency program so that it may become stronger for the detection and deterrence of cartels and, thus, for the growth of a fair and competitive market economy.