Transcript India/US Competition Laws – Cartel Enforcement A

India/US Competition Laws – Cartel Enforcement
A Comparative Primer
Competition Commission of India
Cartel Training at U.S. Chamber of Commerce
Washington, DC – October 25-29, 2010
Charles H. Critchlow
Baker & McKenzie LLP
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NYC 1166626
Key Statutes, Enforcement Authority, Hearing/Trade
The Competition Act, 2002
(12 of 20033)
as amended by
The Sherman Act (1890)
(15 USC
The Competition (Amendment) Act,
2007 (39 of 2007)
The Clayton Act (1914)
PREDECESSOR STATUTE
Foreign Trade Antitrust Improvement
Act (1981)
Antitrust Division,
U.S. Department of Justice
Monopolies & Restrictive Trade Practices Act, 1973
Competition Commission of India
Dhanedra Kumar, Chairperson
A. K. Chauhan, Director General
Hearings before the Commission
Competition Appellate Tribunal
Supreme Court of India
(15 U.S.C.
Christine Varney, Assistant Attorney General
Trials in U.S. District Court
Appeals to Circuit Courts
U.S. Supreme Court
Statutory Prohibitions
Agreement in respect of production, supply,
Contract, combination or conspiracy “in restraint
distribution…which causes or is likely to cause of trade”
an appreciable adverse effect on competition in Sherman Act 15 U.S.C. § 1
Direct, substantial, reasonably forseeable effect
India
on US commerce
Competition Act §3 (1)
Foreign Trade Antitrust Improvements Act, 15 U.S.C.§6a
Any agreement directly/indirectly:
(a) determing prices;
(b) limiting or controlling production, supply, markets…or
services;
(c) sharing market through allocation;
(d) resulting in bid rigging or collusive bidding
presumed to have an appreciable adverse effect
Illegal “per se”:
 price fixing,
 geographic, product market or customer
allocation
 agreement on terms/conditions of sale
 when among horizontal competitors
Competition Act §3(3)
Case Law Interpretation
Does not apply to joint venture agreements if
Joint Ventures analyzed under a “rule of reason”
they increase efficiency in production, supply,
weighing impact of restraints against
distribution, storage, acquisition or control of
efficiencies and net competitive benefits
Case
Law Interpretation
goods or provisions of services
Competition Act §3(3)
Penalties/Exposure
10% of average turnover for 3 preceeding years
or for a
cartel[1]:
Fines up to $100 million on each count
15 U.S.C. §2. (Under U.S. sentencing guidelines a base fine 20 of
volume of commerce, adjusted by culpability score considering various
factors)
3 times profit or 10% of turnover for each year of or
continuation, whichever is higher
twice the gain realized or the loss suffered by
Competition Act §27
victims 18 U.SD.C.§3571(d)
Fines on individuals by the Commission: rupees
one lakh/day for each day of non-compliance, up Individuals fined up to $1 million
to maximum of rupees ten crore
Up to 10 years imprisonment on each count
Penalties by New Delhi Magistrate: up to 3 years 15 USC. § 2
in prison, fines up to reupees 25 crore, or both, for
failure to comply with orders, upon complaint by
the Commission
Competition Act §42
[1] Section 2 (c) defines Cartel to include an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit,
control or attempt to control the production, distribution, sale or price of, or , trade in goods or provisions of services.
Investigation Procedure
Commission can initiate inquiry on its own Antitrust Division generally empowered to
motion, upon receipt of a complaint,or
enforce both criminal and civil penalties
upon a referral from central government
Competition Act §19
Antitrust Division can issue “civil
investigative demands” to collect
If Commission is of the view that there
evidence and/or can petition a US Court
exists a prima facie case, it shall direct
to convene a grand jury
the Director General to investigate and
issue a report
Competition Act §26
FBI assistance, court-appoved search
warrants and wiretaps available
Director General for the purpose of
inquiries is vested with the powers of
Grand jury issues document subpoenas
civil court (including interviews,
executed by Justice Department, and can
examinations) besides powers to conduct
hear testimony; a variety of interview and
‘search and seizure’
immunity techniques are available
Competition Act §§ 41, 36
Leniency Programs
Commission may impose a “lesser penalty” Full leniency for first to come forward, and
on someone who makes disclosure before its employees if an investigation has not
DG issues his report
yet begun (unless corporation coerced
Competition Act §46
others or was originator), or if Division
Cooperation must be complete, information does not at the time have evidence likely
to result in sustainable conviction and not
must be “vital,” with consideration to be
unfair to others
given to “stage” at which person comes
forward, quality of information, and facts and report is a corporate act, is with candor
and complete, unlawful acts were
and circumstances
promptly terminated when
First applicant reduction up to 100%;
discovered,cooperation is complete,
second and third applicants providing
restitution is made [remain exposed to
“significant added value” may get
single damages, no trebling]
reductions of up to 50% and 30%
Reg. No. 4 of 2009
No leniency for later applicants