Ed. Note. I’ve decided to start an occasional feature on “Why I Love Antitrust.” This thought popped into my mind when I learned that my good friend Phil Warren was being honored with the California Antitrust Lawyer of the Year Award. Knowing and working with Phil ranks pretty high on “Why I Love Antitrust.” Plus, I figure if I run out of reasons to write about why I love antitrust, it is probably time to retire.

*************************

On Thursday, October 16, 2014 Phillip H. Warren was honored by the Golden State Antitrust and Unfair Competition Law Institute as the Antitrust Lawyer of the Year.  Phil was the Chief of the San Francisco field office of the Antitrust Division from 2002 until very recently. He is now a partner in Covington & Burling’s San Francisco office. Phil led the Division’s San Francisco office during a time when it achieved incredible success. Some of the major international antitrust prosecutions that were brought while Phil led the San Francisco office included commodity chemicals and five different high technology products–DRAM, LCD panels, cathode ray tubes, optical disk drives, and lithium ion battery cells. He also closely supervised all aspects of several major criminal antitrust trials. He oversaw some of the largest and most successful prosecutions in the Antitrust Division’s history, but Phil gave equal attention and support to all of his assigned matters, regardless of the dollar size of the investigations. Under his leadership the San Francisco office obtained more than $2.5 billion in fines. Phil also had a unique position among Chiefs of Antitrust Division offices in that San Francisco was an active office in not only criminal matters, but civil matters as well. He is one smart guy.

Phil joined the Division in 1980 and had many successes as a trial lawyer before he rose up the ranks. But, I am not going to go into all of Phil’s accomplishments and awards. Phil really didn’t want me to post anything about his Antitrust Lawyer of the Year award but relented when I told him that I wanted to start recognizing the accomplishments of career Division attorneys and this would just be the kick-off. Phil’s humility is just one of his exceptional qualities. Phil had earlier opportunities to receive this award but he declined while he was Chief of the San Francisco office. He did not want any personal recognition to take the spotlight off his staff.

I was in many management meetings with Phil. Despite the many successes of his office, Phil was always interested in hearing others’ ideas on investigation, prosecution and management issues. He was like E. F. Hutton. When Phil spoke, people listened. I am sure Phil never made a decision or advanced a position out of any self-interest. His concern was always how to best advance the mission of the Antitrust Division and support the staff that did the work. His love of the institution, and his desire to serve the public and the people who worked in the Division was always evident. The Antitrust Division has always had talented people and I’m sure it always will. Phil’s spirit of service set him apart. I’d like to add a personal tribute I think Phil will appreciate. Of all the exceptional people I have worked with in the Antitrust Division, three stood out for me: John Hughes, the Chief I had the honor to work under for many years in the Philadelphia office; Ralph Giordano, the late former Chief of the New York office; and Phil Warren.  Fantastic lawyers and even better people.

Congratulations Phil!

 

I attended a program on Wednesday night sponsored by the ABA Section of Antitrust Law on “Hot Topics in Antitrust and Criminal Enforcement in the Financial Sector.” The program was hosted by Jones Day in Washington, DC. The program focused on government enforcement in the financial sector with developments in foreign currency exchange (Forex), municipal bonds and LIBOR. A theme of the program was the team effort between the Antitrust and Criminal Divisions of DOJ.

The program was moderated by Mark Rosman, Partner, Wilson Sonsini Goodrich & Rosati. The panelists were:

• Brent Snyder, Deputy Assistant Attorney General, DOJ Antitrust Division

• Daniel Braun, Deputy Chief for Litigation, Fraud Section, DOJ Criminal Division

• Ellen Koplow, General Counsel, TD Ameritrade

• David P. Wales, Partner, Jones Day

The program lasted about an hour after an earlier hour of networking. My impressions of the main points of the discussion are:

• While the Criminal Division and Antitrust Division have always had some interaction, Libor marked the first true joint investigation. Attorneys from both Divisions worked hand in hand from conducting joint witness interviews to bringing charges and negotiating settlements. The Forex investigation is proceeding in the same coordinated fashion. The benefits from this cohesion are, among others, increased manpower, broader expertise in analyzing complex markets allowing for a broader range of charges where appropriate; and one “team” for defense counsel to deal with.
• The Libor investigation has resulted in numerous charges to date and the investigation is continuing. There have been no charges yet in the Forex investigation, but DOJ has acknowledged that the investigation is ongoing.
• The Antitrust Division’s Corporate Amnesty Policy apples only to Title 15 violations. But, where Antitrust has issued a corporate leniency letter, the Criminal Division has not and will not “charge its way around the leniency” by bringing fraud charges for the same conduct. On the other hand, the government will push back on efforts to label fraud conduct a Title 15 violation to take advantage of the leniency program.
• The DOJ is taking a closer look at arguments that a corporate guilty plea to a criminal charge will result in an “Arthur Anderson” implosion of the business and possible serious economic consequences to the economy at large. Experience over the last several years has indicated that not every corporate plea is a fatal blow to the enterprise. By way of example, the panel noted that the DOJ has recently criminally charged two foreign banks, Credit Suisse and BNP Paribas, pursuant to plea agreements whereby they pled guilty and paid fines of $2.6 and $8.9 billion (These were not Libor/Forex cases).
• There was a discussion of the consideration DOJ gives to corporate compliance programs when making charging decisions. Mr. Braun stated that the Criminal Division will take into account the corporate compliance program in effect at the time of the offense and any subsequent remedial measures in deciding whether and/or what charges to bring. Braun suggested that in-house counsel is generally the person who can make the most compelling case about the sincerity and breadth of the company’s compliance program. The Antitrust Division does not give credit for compliance programs, which it considers to be “failed” if a violation has taken place. Mr. Snyder did state, however, that Antitrust is considering whether there might be ways to give credit for compliance efforts. (Both Bill Baer and Brent Snyder have given recent speeches addressing the Antitrust Division’s policy on compliance programs (here and here). They are well worth a read. I covered these speeches in an earlier post (here).
• My last takeaway: This was an excellent program and a good way to spend time with the enforcers and defense attorneys practicing in this area.   Food and wine, beer and soft drinks were supplied! But, the programs are also available by telephone. If not already a member, you should consider joining the ABA Section of Antitrust Law  and the committees that sponsored the program:                                                                                  Cartel & Criminal Practice Committee;  Compliance & Ethics Committee and the Financial & Insurance Services Committee

If you have any questions, feel free to give me a call. Thanks for reading.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Today’s guest post is by James Musgrove and Joshua Chad of the leading Canadian law firm, McMillan LLP

************************************

Welcome Back to Canadian Cartel News. Following Volume 1’s primer on Canada’s anti-cartel legislation, Volume 3 provides an overview of the Canadian Competition Bureau’s Immunity and Leniency programs.[1]

Like many of its counterparts around the world, the Canadian Competition Bureau (the “Bureau”) has established immunity and leniency programs to encourage parties to admit their involvement in the commission of Competition Act offences and to cooperate in the subsequent prosecution of such offences. The Bureau has released an Immunity Program Bulletin as well as a Frequently Asked Questions document.  In regard to its Leniency Program, it has also released a Leniency Program Bulletin and a Frequently Asked Questions document.

The Immunity Program allows for immunity from criminal prosecutions to be granted to a party who has committed a Competition Act offence, on the condition that this party is the first person to report the matter to the Bureau and that the person assists the Bureau by providing information for use in prosecuting others that were involved in the same offence. To receive immunity, the applicant must either have disclosed an offence to the Bureau of which the Bureau was not previously aware, or the applicant must be the first to come forward to the Bureau before the Bureau has sufficient evidence to recommend that the matter be prosecuted. The successful applicant receives immunity from prosecutions for itself and its employees, officers and directors. Of note, the Bureau does not give any special treatment or consideration to a party because it has been granted immunity or favourable treatment in another jurisdiction. To be the successful Immunity applicant in Canada, the party must be the first to report the offence to the Bureau.

The Leniency Program offers favourable treatment to subsequent parties that come forward and cooperate with the Bureau in its prosecution of Competition Act offences. The first leniency applicant will typically receive a significantly reduced fine (typically a 50% reduction), as well as immunity for its employees, officers and directors. As well, if the Immunity applicant is unable to fulfill the requirements of the Immunity Program, the first Leniency Program applicant will be able to request immunity. Subsequent leniency applicants will receive lesser reductions in fines, and its personnel are not guaranteed full immunity, but the corporate penalties are less than they otherwise would have been had the party not come forward and cooperated. Moreover, a Leniency Program applicant may be able to receive a further reduction in its fine amount for its leniency-related offence if it also reports to the Bureau information concerning additional Competition Act offences that qualify for the Immunity Program (known as “Immunity Plus”).   [Read more…]

Today’s Guest post is from Markus Röhrig who is a partner at the European law firm Hengeler Mueller. He is admitted to the German and the New York bars. Mr. Röhrig specialises in German and European competition law.  He frequently advises clients with respect to European and German cartel investigations, behavioral issues (abuse of dominance) and merger control cases.

*****************************************************************

When Regulation No. 1/2003 celebrated its tenth anniversary earlier this year, Vice President Almunia announced that the European Commission (EC) would launch an initiative to review how the enforcement system has performed and to explore further improvements. In July 2014, European Commission published a report which sets out a thorough analysis of the enforcement activities of the EC and the National Competition Agencies (NCAs) in the past ten years and a number of proposals to enhance antitrust enforcement in the EU in the years to come. The EC is currently engaged in discussions with stakeholders.

The EC’s objective is to create a genuinely common area for antitrust enforcement in Europe. In its report, the EC submits several proposals to achieve that goal. These include, first, enhancing procedural convergence. According the EC, some NCAs lack fundamental enforcement powers such as, e.g., the power to inspect the premises of private individuals or the ability to effectively collect electronic evidence. Second, the report finds that there is scope to harmonize and enhance the effectiveness of sanctions for antitrust infringements. Amongst other things, the report specifically mentions that all NCAs should be able to apply the concept of parental liability and economic succession, as established by the European courts, and that a uniform rule on the legal maximum of administrative fines for antitrust infringements would be desirable. The report also stresses that the achievements made in terms of leniency policy need to be secured. The third area which the report addresses is highly controversial in the EU, namely the role which sanctions on private individuals –especially criminal sanctions– should play in antitrust enforcement. The report points out, rightly I believe, that such sanctions can work as a disincentive for companies to seek leniency.   [Read more…]

Since I began practicing antitrust law a very long time ago I have observed two significant developments. First, antitrust law is called competition law in other places around the world and today there is increasingly robust global competition law enforcement.   The second development: economists now have more and larger parties at the ABA Antitrust Spring meeting.

Given the first development, Concurrences Journal, in partnership with the New York University School of Law, is holding its inaugural conference “Antitrust in Emerging and Developing Countries” on Friday, October 24, 2014. This one-day conference (8:30am to 6:30pm) features speakers from China, Brazil, Mexico, South Africa, among other jurisdictions. Keynote speakers include:

• Eleanor M. Fox, Professor at NYU
• Santiago Levy Algazi, Vice President for Sectors and Knowledge at the IADB
• Dennis Davis, Judge of the High Court of Cape Town
• William E. Kovacic, Professor at GW University
• Frank Fine, Executive Director, China Institute of International Antitrust and Investment
• Blanca G. Rodriguez, DG Comp
• Randolph W. Tritell, FTC

There is a detailed program and complete list of speakers on the program website.

The conference should provide interesting insights into similarities and differences among enforcement agencies around the globe. One panel I am particularly interested in is: Dominance and Abuse: What’s the Problem; What are the Remedies?   Hopefully the auto parts cases will be discussed.   The U.S. and other jurisdictions are bringing many cases against the auto parts manufacturers. These have been classic per se horizontal price-fixing/bid rigging cartel cases. But, India and China have just brought large auto parts cases as well. These appear to be quite different. There was no charge of horizontal collusion. Instead the cases involve “abuse of dominance” in the way auto parts manufacturers control distribution and pricing of parts for their product. The very headline “India Charges 14 Auto Makers with Abuse of Dominance” is a little puzzling to U.S. trained competition lawyers.  The fact that there are 14 automakers would seem to doom any “dominance” charges.  But, the companies were fined a whopping $420 million collectively. “The car companies charged arbitrary and high prices for their spare parts” through their monopolistic control, the Competition Commission of India said in a statement.  The car companies were also found to be “distorting fair competition” by using their dominant position to protect their market for repair services.  How were these decisions made? On what evidence? What were the economic theories regarding interbrand versus intrabrand?  Were these distinction recognized?   The “Antitrust in Emerging and Developing Countries” conference sounds like a good place ask these and other questions.

 

 

I was recently a speaker at both the Society of Corporate Compliance and Ethics conference in Chicago and the Ethics and Compliance Officer Association conference in Atlanta. I learned a lot from the members and my fellow panelists, Tim Bridgeford of Tyco and Doug Tween of Baker & McKenzie.  One theme of both panels, and the theme of this post, is the need for an effective antitrust ethics and compliance program. In the competition for compliance dollars, and C-suite attention, it is important to be able to effectively make the case for devoting resources to antitrust compliance.  And the case is compelling, even though the Antitrust Division does not credit a company for having a compliance program if a price-fixing violations occurs.

Antitrust compliance has been overshadowed somewhat by FCPA compliance. For example, we were the only panel on antitrust compliance at the conferences. There were many FCPA related programs. One reason for this disparity is that the Criminal Division has given extensive guidance on what constitutes an effective compliance program. The Antitrust Division by contrast, while stressing that antitrust compliance programs are essential, has declined to offer guidance.  Another key factor may be that in the FCPA world a company may avoid criminal prosecution if it had an effective compliance program, or may at least have the compliance program taken into account in its penalty if it is prosecuted. On the other hand, the Antitrust Division does not give credit for a preexisting antitrust compliance program.

The Antitrust Division, which rarely makes public comments about compliance programs, addressed the issue in two recent speeches. Brent Snyder, Deputy Assistant Attorney General for Criminal Enforcement gave a speech: Compliance is a Culture, Not Just a Policy.  Snyder referred to Chapter 8 of the United States Sentencing Guidelines as providing “guidance for minimal requirements of an effective compliance and ethics program. The Guidelines set out several common-sense principles that, when applied, increase the likelihood that a compliance program will be effective.”  Snyder also referred to competition compliance guidance given by the International Chamber of Commerce in The ICC Antitrust Compliance Toolkit.

A day later on September 10, 2014, Bill Baer, Assistant Attorney General for the Antitrust Division gave a speech: “Prosecuting Antitrust Crimes.” Baer reiterated the Division’s long held position that it is highly unlikely that a company can get credit for a failed compliance program: “The fact that the company participated in a cartel and did not detect it until after the investigation began, makes it difficult for the company to establish that the compliance program was effective.”

There is much more to both of these speeches as discussed in an earlier Cartel Capers post.  And, there is much better news north of the [American] border. Canada has announced draft guidelines on compliance programs that offer credit to a company for instituting a robust and compliance and ethics program—even if, in certain circumstances, there has been a breach. These important guidelines have been published for public comment and can be found here.

Despite the Division’s position on compliance programs, there are compelling reasons why a company should have an antitrust/competition compliance program. We discussed some of these during our panels:   [Read more…]

Today’s post is from Mauro Grinberg who is a partner at Grinberg Cordovil in Brazil.   Mr. Grinberg is one of the leading competition lawyers in Brazil and is a former Commissioner of CADE, the Brazilian antitrust agency.

*****************************

Cartels and Leniency in Brazil

Cartels have obviously been violations of the Brazilian Law but, due to low and unfruitful enforcement, most of the Brazilian businesses were not very worried about it. Moreover, the economic policies until the mid and late 90s were to call the members of a certain market and talk to them altogether in order to make them lower the prices of certain goods. It happened with cars, tires, milk, coffee, etc. Now we can see that most cartels were sort of “sponsored” by the Government.

Of course this has changed and a landmark decision was issued in 1999 by the Brazilian antitrust agency, Conselho Administrativo de Defesa Econômica (CADE) against the three producers of sheet steel. The scenario was so blurred at that time that the three CCOs of the companies traveled together from São Paulo to Brasília where they held a meeting with the authority in order to communicate that they have raised their prices due to the inflation rate. They intended to have the blessing by the authority, as it had always happened and they had no means to know it would be different this time. And it was. An investigation was opened and they were accused of conducting a cartel and convicted in 1999. Needless to say, the companies went to Court against such conviction but there is not a definitive decision after 15 years.

Since then, things have changed dramatically and now it is clear for the big business that cartels are against the law; usually they know quite well the “do´s” and “don´t’s” list. The fact that in most of the markets there are foreign companies, used to the antitrust law in their countries of origin, helps a lot. Also, these companies are keen to implement compliance programs which not only are educational tools but also help to detect violations of the law.

From here we go to the leniency program, where these violations can be uncovered and reported (and in most cases are). In the past it would be difficult to imagine the existence of whistleblowers in Brazil, due to some behavioral traditions. Not anymore, maybe because of the foreign business culture which has been inoculated in our culture but also because of the growing consciousness of the illegality. Of course the incentives play an important role.

However, it is so far very clear to the observer that the vast majority of the leniency agreements happens in markets that bear the participation of foreign companies. Brazilian business is still skeptical about leniency. But this also may change because the authorities are now going after middle markets and trade associations (including those joining doctors, dentists, real estate agents, etc.) in which apparently compliance programs are not even thought of. Gas stations, mainly in small towns, are facing cartel accusations, often with evidence showing that no one was very worried about being caught.

It is to think that both compliance and leniency programs will soon be used by these groups. Meanwhile, however, there has not been a strong awareness of the illegality of competitors acting together. A lot more of advocacy is needed to get to such point; in the meantime, conflicts are arising and will arise facing these groups and their illegal methods.

A remark about the role of Courts is important here. In Brazil any decision or act by the Public Administration (including the antitrust authorities can be taken to and questioned by the Courts. The antitrust authority tried to argue that the Courts could only review procedural matters but was not successful. Although Courts recognized that this is a Constitutional guarantee for the parties, we must understand that the system in Brazil is very slow, mainly when dealing with antitrust law, which is rather new in Brazil. We can understand that Judges are pretty much used to arguments related to the due process of law but not so much when it comes to antitrust law. It is, we hope, a question of time.

Competition Policy International (CPI) recently published a collection of articles relating to the FTAIA and the Motorola Mobility case. I was pretty excited to have an article in the collection that included distinguished authors such as Professor Eleanor Fox. CPI is a subscription-based service, but this is the blurb introducing the issue:

In Motorola Mobility, the Seventh Circuit is readying to rehear a lawsuit that will (hopefully) clarify the extent of U.S. antitrust law’s reach outside of the United States. The issue concerns the Foreign Trade Antitrust Improvements Act, which was ostensibly passed to clarify the reach and limits of the Sherman Act for U.S. companies doing business abroad. However, given divergent court opinions, matters have become quite messy. This issue will bring you up to date on the history, the issues, and the significant ramifications at stake. As Eleanor Fox writes in her article, this situation raises the possibility that “U.S. law is in danger of creating a void in the reach of U.S. antitrust law to reprehend anticompetitive acts by foreigners abroad destined to raise the price of goods and services to U.S. consumers.”

Summary

In my article (here) I make the following points:

• The FTAIA ought to be repealed. The FTAIA was passed in 1982 primarily to provide immunity to U.S. exporters to engage in anticompetitive conduct as long as it was directed at foreign markets. The world has changed since 1982 and such immunity is now obnoxious.
• The comity concerns of foreign nations who have filed amicus briefs arguing that Sherman Act jurisdiction should not extend to overseas sales of components are not frivolous. Many, perhaps most, products purchased by U.S. consumers contain components that were made, purchased and assembled overseas.
• The court should find that the FTAIA requirements of “direct, substantial and reasonably foreseeable effect” on U.S commerce were met on the facts in Motorola Mobility.  This would allow the Antitrust Division to prosecute foreign component cartels as it did in the LCD panel matter. The executive branch has a strong incentive to weigh the comity concerns of foreign nations before proceeding.  The Antitrust Division has “skin in the game” of fostering international cooperation, and in fact no foreign government has objected to the Division’s criminal prosecution of both foreign companies and foreign executives in the LCD panel investigation.
• The direct purchaser rule of Illinois Brick and related cases, however, should apply to civil damage actions brought by U.S consumers. If a company, or consumer, has elected to make purchases overseas to take advantage of various favorable circumstances and/or laws, it is not unreasonable to require that they pursue damage actions in the jurisdiction where they elected to make the purchase.

[Read more…]

Today’s post by James Musgrove, Jun Chao Meng and Joshua Chad of McMillan LLP. is about an important development in Canada in the treatment of corporate compliance programs.

********************************************************************************************************************

On Thursday, September 18, the Canadian Competition Bureau (Bureau) released a Draft Updated Corporate Compliance Bulletin. The Bureau’s Corporate Compliance Bulletin was first released in 1997 and was most recently updated in 2010. The new Draft Bulletin is available for public consultation until November 17, 2014.

While the Draft Bulletin contains a number of updates, the most significant change is the creation of an incentive program that offers reduced fines for leniency program participants who have credible and effective corporate compliance programs. In both the Draft Bulletin and in remarks by the Commissioner of Competition (Commissioner) on September 18, the Bureau made clear that the mere pre-existence of a program will not automatically garner a company favourable treatment. However, the Bureau proposes that where a company has a credible and effective corporate compliance program the Bureau will recommend to the Court and to the Public Prosecution of Canada (PPSC) that the company receive a reduced fine in connection with an application under the Bureau’s Leniency Program. This proposed approach would make the Bureau one of the few worldwide competition authorities to reward companies for having effective compliance programs, even when those programs have failed.   [Read more…]

Today’s guest post is by Avinash Amarnath, who is with the Indian law firm Vinod Dhall and TT&A.  [Mr. Vinod Dhall was a member and acting  chair of the Competition Commission of India from 2003-2008.]  Avinash writes often on competition law developments in India and we are fortunate that he will be a guest contributor.

**************************************************************************************************************************************

Introduction to Indian cartel law

Let me start by saying what a pleasure it is to be writing for readers of Cartel Capers and thank Bob for making me a part of this wonderful initiative. Given that competition law in India is relatively new, I thought it might be useful to give a brief overview of Indian cartel law in my first post.

To further its policy on liberalisation, privatisation and globalisation of its economy, India enacted its modern competition law (known formally as the Competition Act, 2002) in 2002. The provisions on cartels, vertical agreements and abuse of dominance came into force in May 2009. The agency vested with the enforcement of the competition law is the Competition Commission of India (CCI) with an appellate tribunal (COMPAT) to hear appeals from decisions of the CCI.

While India’s cartel law is inspired by the law in more evolved jurisdictions such as the European Union (EU) and the United States (US), the Indian cartel law is not a word for word copy from either of these laws and is a unique hybrid of the EU and US law. The Indian law on anti-competitive agreements is structured in a three-fold manner. First, Section 3(1) contains a general prohibition on all agreements that cause/likely to cause an appreciable adverse effect on competition (AAEC) in India. Second, Section 3(3) of the Indian statute declares that horizontal agreements between competitors in the nature of price-fixing, limitation of output, market sharing or bid rigging will be presumed to cause an AAEC. However, as clarified by the CCI in several of its decisions, parties can rebut this presumption if they are able to show that certain pro-competitive efficiencies outweigh the anti-competitive effects. This is similar to the ‘restriction by object’ approach adopted in the EU for cartels of the most pernicious kind. Section 3(3) also covers decisions of trade associations and has an exemption for efficiency enhancing joint ventures. Third, under Section 3(4), vertical agreements will be assessed on a ‘rule of reason’ approach to ascertain whether they cause or are likely to cause an AAEC in India.

It appears that horizontal agreements not falling under the specific categories listed in Section 3(3) such as standardization agreements and R&D agreements will be assessed on a ‘rule of reason’ approach under the general prohibition under Section 3(1). The CCI in a recent decision (Ramakant Kini v. Hiranandani Hospital) clarified that there could be agreements that did not fall under Section 3(3) or Section 3(4) and such agreements could still be caught by the general prohibition under Section 3(1).

A peculiar feature of the Indian competition law is that the factors to be taken into account while conducting the competition analysis (i.e., the test of AAEC) are specifically mentioned in the statute.

The definition of the term ‘agreement’ under the Indian statute is wide and includes even a mere understanding or action in concert. Whether this covers the concept of a ‘concerted practice’ as defined in the EU is still unclear. The CCI and the COMPAT have clarified that a finding of an agreement can be based on circumstantial evidence alone and that the evidentiary standard of proof for finding an agreement is a preponderance of probabilities. They have further clarified (in line with position in the US and EU) that mere price parallelism is insufficient to constitute evidence of an agreement and some “plus factors” have to be shown to prove an agreement.

Although the CCI has a “whistleblower”/”leniency” program for cartels, there have been very few leniency applications primarily due to lack of awareness about the program. Most cartel decisions of the CCI have arisen out of complaints by customers/other affected parties or initiation of investigations by the CCI of its own motion.

As far as procedure is concerned, at present, the Director-General’s office (the investigative wing of the CCI) is empowered to conduct dawn raids with the approval of a magistrate. A proposed amendment to the statute seeks to vest this power of approval with the Chairperson of the CCI.

Penalties for cartels under the statute can be up to 10% of the company’s turnover or up to 3 times its profits. Percentages in cartel cases are generally high. In the Cement cartel decision, the CCI imposed a fine of twice the profits of the companies. In a rather contentious recent decision, the COMPAT held that penalties can be imposed only up to 10% of the ‘relevant turnover’ i.e, the turnover arising from the products/services which were affected by the cartel. However, since then the COMPAT itself seems to have receded from this position. There are provisions in the statute for imposing fines on individuals within the company who were responsible for the cartel and these have been used against the members of a chemist and druggist association in a recent case. However, the Indian statute does not provide for criminal sanctions against individuals.

I’ve tried my best to capture all relevant aspects of the cartel law in India in this post. There may be some omissions of course and I’m happy to try to answer any questions that readers may have.   [email protected].