India: Cartels

The Indian Competition Act 2002 (the Competition Act) is the law regulating anticompetitive conduct in India, and the Competition Commission of India (CCI) is the statutory authority in charge of competition law enforcement. In preventing practices causing an appreciable adverse effect on competition (AAEC) and to sustain competition in markets, the CCI is aided by its investigative arm, the Office of the Director General (DG). The Competition Act regulates three areas of conduct:

• anticompetitive agreements, including cartels;1
• abuse of dominant position;2 and
• combinations (mergers, acquisitions and amalgamations).3

The CCI is empowered to initiate an inquiry into anticompetitive agreements or unilateral conduct of its own volition, on receipt of any information or on the basis of a reference from the central or a state government or a statutory authority. 4 Any person, consumer or association of persons or consumers can provide information that may trigger an in-depth inquiry. If the CCI establishes the existence of a prima facie case, it directs the DG to carry out an investigation, which culminates in a detailed report. Thereafter, the CCI typically invites the alleged cartelists’ views on the DG’s report and offers them the opportunity to explain their position orally. Finally, if the CCI finds that a cartel exists or an agreement is anticompetitive in nature, it may impose penalties and pass any other orders it deems appropriate. Decisions of the CCI may be appealed to the National Company Law Appellate Tribunal (NCLAT)5 and finally, to the Supreme Court of India (SC).

In this chapter, we review recent trends in cartel jurisprudence and enforcement in India. In the first part, we set out an overview of the substantive law relating to cartels and review the evolving evidentiary standard to prove an ‘agreement’ (a necessary precursor to the existence of a cartel). Second, we consider certain new developments in relation to leniency, computation of penalties, individual personal liability and the concept of ‘single economic entity’ often used by alleged cartel participants that are part of the same group of companies to avoid liability under the Competition Act.

Cartels: an overview of the substantive law

Section 3 of the Competition Act prohibits certain anticompetitive agreements. It deals with two types of anticompetitive agreements: agreements between or among competitors (horizontal agreements, including cartels); and agreements between enterprises or persons at different stages or levels of the production chain (vertical agreements). While section 3 of the Competition Act itself does not expressly categorise these agreements as horizontal or vertical agreements, the language of sections 3(3) and 3(4) of the Competition Act makes it abundantly clear that the former is aimed at horizontal agreements and the latter targets vertical agreements. Cartels are a subset of horizontal anticompetitive agreements and to establish the existence of a cartel, the CCI must find that competitors had entered into an agreement to fix prices, limit supply, share markets or rig bids. Given that agreements can take various forms, the Competition Act has broadly defined the term ‘agreement’6 to mean:

Any arrangement or understanding or action in concert, (i) whether or not, such arrangement, understanding or action is formal or in writing; or (ii) whether or not such arrangement, understanding or action is intended to be enforceable by legal proceedings.

Further, an anticompetitive agreement is one that causes an AAEC in India. To determine whether an AAEC could arise, the CCI balances the possibility of various factors. The first three relate to the negative effects on competition, and include:

• the creation of barriers to new entrants in the market;
• the ousting of existing competitors from the market; and
• foreclosure of competition by hindering entry.
• The remaining three relate to beneficial effects, such as:
• benefits accruing to consumers;
• improvements in the production or distribution of goods or provision of services; and
• promotion of technical, scientific and economic development. 7

Importantly, section 3(3) of the Competition Act provides that agreements entered into by enterprises or persons (including cartels) engaged in trade of identical or similar products are presumed to have an AAEC in India if they relate to:

• pricing – price-fixing agreements, where competitors directly or indirectly fix purchase or sale prices between themselves;
• quantities – agreements between competitors that seek to limit or control production, supply, technical development of markets, investments or provision of services;
• market sharing – agreements between competitors by way of allocation of products, geographies or source of production; and
• bid-rigging – collusive bidding arrangements where competitors eliminate or reduce competition for bids or adversely affect or manipulate the process of bidding.

While considering such agreements, the CCI examines the evidence at hand and determines whether a horizontal agreement or a cartel exists. Once a cartel or horizontal agreement is found to exist, it is presumed to cause an AAEC. This presumptive rule though does not apply to efficiency-enhancing joint ventures.8 Similarly, the Competition Act provides for the right of any person to:

• impose restraints and reasonable conditions to protect their intellectual property rights; and
• to export products from India, provided that the agreement exclusively relates to the production, supply or distribution of the products for such export.9

The provisions of section 3(3) of the Competition Act effectively make it incumbent upon the alleged cartel participants to establish that their conduct did not result in an AAEC. An analysis of the CCI’s decisions suggest that this burden has proven to be an onerous one, and alleged cartelists have rarely succeeded in rebutting such a presumption. Therefore, typically once a cartel agreement is found to exist, the focus quickly shifts to the quantum of penalty that the CCI may impose on cartel members. In fact, the erstwhile appellate authority, the Competition Appellate Tribunal (COMPAT), in National Insurance Company Limited v CCI10 clearly stated that the presumption under section 3(3) of the Competition Act takes away the applicability of ‘rule of reason’ once the CCI establishes an anticompetitive agreement (ie, the ability to rebut the presumption that there is an AAEC). It further states that presumption in a substantive law is ‘irrefutable and conclusive’.

The CCI also has the power to search and seize documents and to collect evidence through ‘dawn raids’ in order to establish the existence of a cartel agreement through direct evidence.11

Changes to the leniency regime

Reliance on leniency programmes is common in several mature competition jurisdictions. Similarly, the CCI’s own leniency programme is aimed at inducing cartel participants to break rank and provide information against their fellow cartelists under the Competition Commission of India (Lesser Penalty) Regulations 2009 (the Lesser Penalty Regulations). They would do this by admission of participation in such anticompetitive conduct and thereby benefit from the reduction of the penalty that could potentially be imposed on them. It is public knowledge that a number of leniency applications have been filed with the CCI. In January 2017, the CCI issued its first order under the leniency regime in a case involving bid-rigging for tenders relating to the supply of fans to the Indian Railways (Brushless DC Fans case).12 The CCI considered evidence supplied by one of the parties by way of a leniency application and granted a reduction in penalty of 75 per cent to the leniency applicant for having assisted the CCI in coming to a conclusion that section 3(3) of the Competition Act was violated. The reason the leniency applicant did not get a full 100 per cent reduction in penalty was because the investigation had already commenced by the time the leniency was filed and the CCI already had some evidence against the cartel participants.

Shortly after this decision, the CCI passed certain amendments to the Lesser Penalty Regulations (Amendment)13 aimed at streamlining and strengthening its leniency programme by attracting better-quality evidence through leniency applications, and ensuring that it expends lesser resources.

The Amendment broadly expands the scope of the Lesser Penalty Regulations by allowing individual whistle-blowers to approach the CCI with evidence on collusion. It brings in an additional requirement for an enterprise applying for leniency to also furnish details of individuals who have been involved in the cartel on their behalf. As a result, applicant enterprises will now be subject to the onerous requirement of interviewing employees and former employees in respect of the contravening conduct. Having said that, earlier, lack of clarity on whether individual employees could benefit from the leniency regime was one of the reasons why enterprises were not forthcoming in seeking the benefit of the Lesser Penalty Regulations. The Amendment marks a welcome development, and now, enterprises will be able to seek lesser penalties for itself as well as for the individuals who may have contributed to a cartel. The Amendment also abolishes the earlier cap on the number of leniency applicants who could benefit from the penalty waiver (ie, three) and allows the CCI to grant immunity to more than three applicants, each eligible for a penalty waiver for up to 30 per cent.

Finally, the Amendment has introduced significant changes to the provisions on confidentiality by allowing the DG to disclose information under the Lesser Penalty Regulations to other parties for the purposes of the investigation if it ‘deems necessary’. However, if the applicant does not consent to such disclosure, the DG will have to necessarily:

• record its reasoning for disclosure in writing; and
• seek the approval of the CCI.

The Amendment appears to be intended to ensure that the parties against whom a negative finding may be made are afforded a fair opportunity to controvert evidence and allow the DG to test such evidence, or collect further evidence, by putting it across to other parties. Until now, the identity of an applicant seeking immunity, as well as the evidence submitted by it under the Lesser Penalty Regulations was not permitted to be disclosed by the DG or the CCI – unless such disclosure was required by law, was consented to by the applicant, or such information was publicised by the applicant itself. The Amendment dilutes this provision, and grants the DG the flexibility to disclose such information to other parties. The Amendment also allows for file inspections by parties to information submitted by leniency applicants and this notably overrides the confidentiality provision of the Lesser Penalty Regulations. Accordingly, the non-confidential version, which redacts non-public commercially sensitive information and business secrets, becomes available for inspection by parties.

Significant uncertainty still exists in relation to the quality of evidence that needs to be adduced by leniency applicants to qualify for a reduction in penalty. One must be mindful that the Lesser Penalty Regulations themselves indicate that the CCI has been vested with discretion while considering the evidence submitted by applicants and determining whether to grant them the benefit of penalty reduction.14 Given that there have not yet been any significant decisions that have established the existence of cartel agreements through direct evidence collected through leniency applications (other than the case mentioned above) or through dawn raids, the CCI has relied on a variety of indirect or circumstantial evidence alone to determine the existence of a cartel agreement.

Evolving nature of the evidentiary standard to establish an ‘agreement’ under the Competition Act

In view of the wide-ranging scope of the term ‘agreement’, the law governing cartels in India has seen an immense change since the enforcement of the Competition Act. The policy justification for such a broad definition, which intentionally covers any form of understanding among cartel participants, also ties into the fact that cartels rarely exist in explicit contractual form and it is difficult to find direct evidence in investigations of this kind. As a result, the CCI tends to rely on various forms of circumstantial evidence, which is by nature more attainable (though not exact) to prosecute cartels. However, we also note that on appeal, the COMPAT has tended to test whether the use of such circumstantial evidence indeed establishes the existence of a cartel.

The CCI’s early cartel decisions considered the evidentiary standard required for establishing the existence of an agreement as being similar to the ‘beyond reasonable doubt’ approach used in criminal and other penal proceedings. In the Deutsche Bank case,15 the CCI held that the existence of an agreement must be established ‘unequivocally’ and cannot be conjectured or circumstantially adduced. However, this position has been diluted over time. In the Tyre Cartel case,16 while referring to its finding in the Deutsche Bank case, the CCI stated that it in no way suggests that an agreement can be established only through direct evidence and that circumstantial evidence is of no less value than direct evidence as the law does not make any distinction between the two. The CCI adopted a ‘but for’ test of evidence and held that the existence of an explicit agreement is not required and this can be inferred from the intention or conduct of the parties, where such conduct cannot be explained but for some sort of anticompetitive agreement. Similarly, in the Soda Ash Cartel case,17 the CCI observed that in the absence of a plausible alternative explanation, coincidences may constitute evidence of the existence of an agreement and thereby concluded that it may rely on the benchmark civil standard of ‘preponderance of probabilities’. Accordingly, a review of CCI’s decisions in cartel-related cases indicates that while it started its enforcement endeavours by adopting the relatively higher ‘beyond reasonable doubt’ standard of proof, over the years, it seems to have veered towards the ‘balance of probabilities’ test.18

Given that direct documentary evidence is rarely found in cartel investigations, the CCI has increasingly placed reliance on various types of circumstantial evidence alone to establish the existence of an agreement. The CCI often examines economic evidence, such as the nature of the industry, the number of players in the market, the level of market concentration, parallel movement of prices, trends in production and dispatches, capacity utilisation, cost structures, and variations in profit margins across firms, while carrying out cartel inquiries. The CCI also relies on conduct-based evidence, including evidence of meetings between competitors, similar or identical bidding prices, membership of trade associations, any history of cartelisation and suspicious information exchange. This has resulted in an onerous burden being placed on defendant companies which find that the CCI has ‘established’ the existence of an agreement between competitors, purely on economic inferences and conduct-based circumstantial evidence alone.

In view of the COMPAT’s position on the presumption under section 3(3) of the Competition Act being ‘irrefutable’ (as outlined above), companies are likely to be found violating section 3(3) once the CCI proves the existence of an agreement and they do not necessarily get an opportunity to prove that the agreement does not result in an AAEC. The lowering of the evidentiary standard coupled with the acceptance of circumstantial evidence alone to establish the existence of an agreement has made cartel defence increasingly challenging. Not only does the CCI routinely base its findings on selective and fragmented circumstantial evidence, certain decisions reveal that the nature and quality of evidence used by the CCI to prove the existence of an agreement have increasingly been watered down over the past few years. For example, in the Container Manufacturers case,19 the CCI concluded on the balance of probabilities that an agreement existed by relying on two pieces of circumstantial evidence: similar bids were submitted despite a variance in cost structures among container suppliers; and the fact that at least 10 of the container suppliers had common board members. Despite the lack of any direct evidence of an express agreement, the CCI found that the circumstances facilitated the possibility of information exchange. As a result, the CCI concluded that there was an agreement between the container suppliers. The CCI’s practice marks a departure from the settled principle that evidence adduced, even if circumstantial, needs to be considered in light of the ‘totality of circumstances’ applicable to the particular case, and not piecemeal.20

In terms of procedural aspects, the COMPAT has found several decisions of the CCI to be not complying with due process requirements. For example, in the Cement Cartel case,21 the Airline Fuel Surcharge case22 and the Air Cargo case,23 without examining the substantive merits of the matters, it remanded the cases and directed that the CCI reconsider its respective decisions afresh due to procedural improprieties at the time the cases were being heard by it. Further, the CCI’s approach to circumstantial evidence has been regularly contested before the COMPAT, which has set far more exacting standards on the nature of the evidence used to find the existence of a cartel agreement. For example, in the Andhra Pradesh Films case,24 the COMPAT took exception to the evidence relied on by the CCI to come to a finding of a violation of section 3(3) of the Competition Act. The COMPAT expressly observed that CCI had mechanically agreed with the conclusions of the DG without independently applying its mind to the material on record. It also found that this contravention was arrived at without requiring the complainant in the particular case to show that there was, in fact, anticompetitive conduct by the alleged cartelists. Similarly, in the Shoe Cartel case,25 the COMPAT held that merely quoting similar or identical rates by shoe manufacturers with respect to the tender floated by the Director General (Supplies & Disposals) did not amount to cartelisation. Setting aside the order, the COMPAT observed that the CCI failed to appreciate other essential factors specific to the relevant market and had made incorrect assumptions on the basis of the ‘plus factors’ (such as past conduct) in coming to an erroneous conclusion of bid-rigging. This demonstrates that the COMPAT is inclined to apply a more robust approach to analysing evidence before it, even while the CCI on the other end has demonstrated an increasing tendency to use largely circumstantial evidence as the basis for finding the existence of a cartel.

Most recently, in the GlaxoSmithKline case,26 one of the factors that the CCI relied on was the DG’s finding that the representatives of GlaxoSmithKline and Sanofi had signed a register with a black pen and simultaneously visited the office of the Government Medical Store Depot, but the COMPAT set aside the decision noting that this cannot lead to an inference of collusion. The COMPAT observed that there was no evidence of any direct or indirect meeting between the two appellants. It also noted that the bids and the quantities quoted by them were not identical. As a result, overall there was insufficient evidence of collusion. Further, in M/S Faiveley Transport (India) Pvt Ltd,27 the COMPAT observed that in an oligopolistic market, the identity of price quoted by the bidder was not an unusual feature, since the players in a limited market are aware of the price quoted by other players. It was, therefore, a normal practice to quote the same price in response to the tender and consequently, there was no evidence of collusion.

Accordingly, these developments suggest that in addition to adhering to the principles of natural justice, the COMPAT requires the CCI to apply a stricter burden of proof to establish the existence of a cartel agreement, and ‘fragmentary and sparse’ evidence alone might not be sufficient for a finding of guilty conduct. It is yet to be seen whether the NCLAT will follow the same approach as the COMPAT. Further, the COMPAT has also repeatedly clarified that any penalty imposed by the CCI should be on the basis of the ‘relevant turnover’ and this view has been recently upheld by the SC.

Penalty calculation and ‘relevant turnover’

Under section 27 of the Competition Act, the CCI can impose a penalty of up to three times the profit or 10 per cent of the turnover of each participating enterprise for each year of continuance of a cartel agreement, whichever is higher. While the CCI has not framed any guidelines or offered any sort of guidance on calculating penalties, in May 2017, the SC settled a critical issue in India’s competition law jurisprudence which was heavily debated before the COMPAT in all appeals against the CCI’s decisions imposing penalties on parties. In Excel Corp Care v CCI & Ors,28 the SC pronounced its decision in an appeal filed by the CCI contesting the COMPAT decision to limit the penalty levied on multi-product companies to the turnover arising from/attributable to the relevant product alone that is found to be the subject matter of contravention, ie, the ‘relevant turnover’.

The SC held that the imposition of penalty adopting the criteria of ‘relevant turnover’ will be ‘more in tune with the ethos of the Competition Act and the legal principles which surround matters pertaining to imposition of penalties’. The SC decision is based on what it considered would be an ‘inequitable’ and ‘disproportionate’ outcome, if the penalty was imposed on the total turnover of the company. Notably, the SC observed:

• the concept of total turnover may bring out inequitable results with respect to the burden of penalty to be paid by enterprises as some enterprises may be ‘single product enterprises’ and others may be ‘multi-product enterprises’;
• there seems to be no justification for including other products of an enterprise for the purpose of imposing penalty when the agreement leading to contravention of section 3 involves only one product; and
• the doctrine of ‘proportionality’ would suggest that the SC should lean in favour of ‘relevant turnover’. There is no doubt that the aim of the penal provision was to ensure that it acted as a deterrent for other enterprises; however, a position that would deviate from ‘teaching a lesson’ to the violators and lead to the ‘death of the entity’ itself, could not be countenanced. If the criteria of total turnover of a company were adopted, it would bring about shocking results that could not be comprehended under the rule of law.

In a separate concurring judgment, Justice Ramana provided a two-step methodology for calculating a penalty.

• Step 1: determination of relevant turnover – the relevant turnover should be the entity’s turnover pertaining to products and services that have been affected by a contravention.
• Step 2: determination of appropriate percentage of penalty based on aggravating and mitigating circumstances.

As a final step, the penalty imposed should not be more than the overall cap of 10 per cent of the entity’s relevant turnover. The guidelines laid out by the SC will help to eliminate the application of disproportionate penalties on enterprises and demonstrate appropriate mitigating circumstances for imposition of a lesser penalty. Separately, the CCI has also initiated proceedings against several individual office bearers and imposed penalty on them for having participated in cartel activity.

Individual personal liability

Section 48 of the Competition Act specifically empowers the CCI to initiate proceedings for levy of penalty against individual officers of a corporation found guilty of infringing the provisions of the Competition Act. First, the CCI can prosecute every individual who was in charge of, and was responsible for, the conduct of the business of the company at the time of contravention of the Competition Act. However, if the individual is able to prove that the contravention was committed without their knowledge or that they had exercised due diligence to prevent the contravention from being committed, then they would be exempt from personal liability. Second, if it is proved that a contravention has taken place with the consent, connivance or negligence of any director, manager, secretary or other officer of such company, then such individual shall also be deemed to be guilty of that contravention and proceeded against accordingly.

Individual personal liability is civil in nature and the initiation of proceedings to penalise individual office bearers is CCI’s prerogative. The penalty for cartels under section 27 of the Competition Act is wide enough individuals as well. Past decisions of the CCI indicate that after passing an adverse order against an individual under section 48, the CCI has imposed penalties up to 10 per cent of the average income of the concerned individual during the preceding three financial years.29 In the Brushless DC Fans case, the CCI reduced the penalty imposed on the officer bearer of the first leniency applicant by 75 per cent, on account of the first marker position awarded to the company and its active cooperation during the investigation process. While the CCI continues to aggressively penalise individuals involved in anticompetitive conduct, it could possibly reduce penalties in cases involving leniency applications or where there are mitigating circumstances.

Scope of the ‘single economic entity’ defence

Cartel jurisprudence in India has also witnessed the CCI consider the concept of the ‘single economic entity’ in many decisions. This concept is particularly relevant given the presence of numerous conglomerates in India: a number of entities may well be part of the same ‘group’ as defined under explanation (b) to section 5 of the Competition Act.30

The CCI considered the principle of a ‘single economic entity’, for the first time, while examining the existence of an anticompetitive vertical agreement in the Lamborghini case. 31 In this case, the CCI held that agreements between entities that are part of the same ‘group’ cannot be scrutinised under section 3 of the Competition Act, since they are in the nature of ‘internal agreements’. Thereafter, when examining the allegation of cartelisation against entities that were part of the same group in the Kansan News case,32 the CCI followed a similar approach and concluded that there cannot be any anticompetitive agreements among entities of the same ‘group’. The CCI’s decisions in the Lamborghini and Kansan News cases have led to an increased use of the ‘single economic entity’ defence in proceedings where an alleged contravention of the Competition Act has occurred between two or more group companies.

In an interesting turn of events, the CCI departed from its previous approach in the Insurance Companies case.33 The CCI penalised four public sector insurance companies that were all wholly owned subsidiaries of the central government controlled through the Ministry of Finance (MOF) for bid-rigging. The CCI held that the insurance companies did not constitute a ‘single economic entity’ as the evidence showed that each company had independently decided its business strategy while participating in the tender, and, without any instruction from the MOF, discussed each others’ proposed bid prices. More recently, in the Grasim Industries case,34 while rejecting a plea of ‘single economic entity’ urged by Grasim Industries Ltd and Aditya Birla Chemicals (India) Ltd, the CCI held that where two or more entities of the same group decide to separately submit bids in the same tender, they are not part of a ‘single economic entity’ and accordingly, the defence did not apply.

Based on the above, the CCI appears to hold that in the context of bid-rigging, the entities involved would be treated as separate enterprises and would be expected to comply with the provisions of the Competition Act even in respect of any agreements entered into by them inter se. Therefore, companies operating as separate market-facing entities that make strategic business decisions independently, despite being part of the same group, may well not be entitled to the ‘single economic entity’ defence. This effectively second-guesses the way that conglomerates and business groups may choose to operate through a series of market-facing entities and further reduces the possible defences available to a company, should the CCI decide to investigate it for being part of an alleged cartel.

First substantive ruling on cartels by the Supreme Court of India

The Monopolies and Restrictive Trade Practices Act 1969 (the legislation, which was replaced by the Competition Act), had provided for an exemption in relation to the collective bargaining activities of trade unions. However, this exemption was not included in section 3 of the Competition Act and, therefore, it was unclear if collective actions by trade unions could be used as a defence to allegations of cartelisation.

In March 2017, the SC issued its first substantive ruling on the provisions of the Competition Act in the Dubbed Serials case,35 upholding an appeal by the CCI against the COMPAT’s decision setting aside the CCI’s finding of cartelisation by members of a film and television artists’ trade union in the state of West Bengal. The SC stated that the respondents in this case were not simply trade unions and comprised of members engaged in economic activities and therefore, were associations of such ‘enterprises’. In light of this, the SC concluded that collective action by such associations to throttle dissenting opinions by impeding upon competition cannot be protected as an ‘expression of protest’ and held the parties to have contravened section 3(3)(b) of the Competition Act.

Conclusion

There have been significant developments in cartel jurisprudence in India in the past year. The SC decision on ‘relevant turnover’ is critical in providing guidance in imposing penalties and would certainly assist the CCI in overcoming any claims of ‘opaque penalty determination’ on appeal by contravening parties. The CCI also appears to have a consistent view on application of the ‘single economic entity’ concept that should guide the conduct of enterprises that operate different market-facing entities. Lastly, given that cartels are typically very difficult to detect, the CCI’s extension of India’s leniency programme to individuals will significantly strengthen the regime, and allow the CCI to get additional evidence on cartels. However, while the change to the confidentiality provisions in the leniency regime brings much needed clarification on the scope of disclosure permissible, it remains to be seen how frequently and on what legal grounds the DG invokes this provision. It also remains to be seen whether NCLAT as the new appellate authority for competition cases will carry on the COMPAT’s practice of carefully scrutinising both the substantive and procedural aspects of the CCI’s cartel decisions.

Notes

1 Section 3 of the Competition Act.

2 Section 4 of the Competition Act.

3 Section 5 of the Competition Act.

4 Section 19 of the Competition Act.

5 With effect from 26 May 2017, the former competition appellate authority, the COMPAT, has been dissolved and replaced by the NCLAT. Accordingly, fresh appeals are to be filed with the NCLAT and all pending cases have been transferred from the COMPAT to the NCLAT.

6 Section 2(b) of the Competition Act.

7 Section 19(3) of the Competition Act.

8 Proviso to Section 3(3) of the Competition Act states, ‘Provided that nothing contained in this sub-section shall apply to any agreement entered into by way of joint ventures if such agreement increases efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services.’

9 Section 3(5) of the Competition Act.

10 Appeal No. 94/2015. In most cases the CCI has considered thus far, it has not separately considered the effects of a horizontal anticompetitive agreement. However, in Nirmal Kumar Manshani v Ruchi Soya & Ors, Case No. 76 of 2012, the CCI found that the agreement pertained to export sales, and therefore had no effects on the markets in India. Consequently, it found that there was no contravention of the cartel provisions of the Competition Act.

11 So far, we are aware of two instances where the CCI has used its dawn raid powers and one of these cases (CCI v JCB India Ltd & Anr, SLP (Crl) 5899-900/2016), relates to an allegation of abuse of dominance. This case is currently in appeal at the Supreme Court, where the Court is considering a procedural issue of whether the warrant that provided for ‘search’ in this case also included the power of ‘seizure’.

12 In Re: Cartelization in respect of tenders floated by Indian Railways for supply of Brushless DC Fans and other electrical items, Suo Motu Case No. 3 of 2014.

13 The Amendment is dated 8 August 2017 and was published in the Gazette of India on 22 August 2017.

14 The CCI considers a number of factors on whether to grant leniency and an applicant seeking to benefit from the provisions of the Lesser Penalty Regulations is required to: (a) provide vital disclosure in respect of the contravention; (b) provide all relevant information, documents and evidence as required by the CCI; (c) cooperate with the CCI throughout the proceedings; and (d) not conceal, destroy, manipulate or remove documents which are relevant to the proceedings, and may contribute to establishment of a cartel. Regulation 3 of the Lesser Penalty Regulations.

15 Neeraj Malhotra v Deutsche Post Bank Home Finance Limited & Ors, Case No. 5 of 2009.

16 In re All India Tyre Dealers Federation v Tyre Manufacturers, MRTP Case: RTPE No. 20 of 2008

17 Shailesh Kumar v Tata Chemicals Limited & Ors, Case No. 66 of 2011.

18 For example, in LPG Cylinder case (In re Suo Motu Case Against LPG Cylinder Manufacturers, Case No. 3 of 2011), the CCI clarified that as cartel sanctions in India are civil in nature, the test of proof will be only ‘balance’ of probability’ and ‘liaison of intention’, which can be established with the support of indirect or circumstantial evidence.

19 In re M/s Sheth & Co and Ors, Suo Moto Case No. 04 of 2013.

20 Arvind Kumar Anupala Poddar v State of Maharashtra; 2012 (11) SCC 172.

21 Lafarge India Ltd v CCI & Ors, Appeal No. 105/2012 & I.A. No. 36/2013.

22 Interglobe Aviation Ltd v CCI & Ors, Appeal No. 07/2016.

23 Air Cargo Agents Association of India v CCI & Ors, Appeal No. 98/2015.

24 Andhra Pradesh Film Chamber of Commerce v M/s Cinergy Independent Film Service Pvt Ltd & Ors, Appeal No. 15/2013.

25 A.R. Polymers Pvt Ltd v CCI & Ors, Appeal No. 34/2013

26 GlaxoSmithKline Pharmaceuticals Ltd v CCI & Ors, Appeal No. 85 /2015.

27 Deputy Chief Materials Manager, Rail Coach Factory v M/S Faiveley Transport India Ltd, Appeal No. 10/2016 and I.A. No. 29/2016.

28 (2017) 8 SCC 47.

29 See, for example, Maruti & Company v Karnataka Chemists & Druggists Association & Ors, Case No. 71 of 2013, In Re: Bengal Chemist and Druggist Association, Suo Motu Case No. 2 of 2012 and Arora Medical Hall, Ferozepur v Chemists & Druggists Association, Ferozepur, Case No. 60 of 2012.

30 ‘Group’ is defined under the Competition Act as being ‘two or more enterprises which, directly or indirectly, are in a position to:

(i) exercise fifty per cent or more of the voting rights in the other enterprise; or

(ii) appoint more than fifty per cent of the members of the board of directors in the other enterprise; or

(iii) control the management or affairs of the other enterprise.’

31 Exclusive Motors Pvt Ltd v Automobili Lambhorgini, Case No. 52 of 2012.

32 Kansan News Pvt Ltd v Fastway Transmission Pvt Ltd, Case No. 36 of 2011.

33 In re Cartelization by public sector insurance companies in rigging the bids submitted in response to tenders floated by the government of Kerala for selecting insurance service provider for Rashtriya Swasthiya Bima Yojna v National Insurance Co Ltd & Ors, Suo Moto Case No. 02 of 2014. The COMPAT upheld the finding of bid-rigging on appeal but the penalty was modified (Appeal No. 94/2015).

34 Delhi Jal Board v Grasim Industries Limited & Ors, Ref. Case No. 3 & 4 of 2013.

35 CCI v Coordination Committee of Artists and Technicians of West Bengal Film and Television and Ors, Civil Appeal No. 6691 of 2014 dated 7 March 2017.