This year will mark 12 years of enforcement by the Competition Commission of India. Despite several challenges to its jurisdiction and recent upheavals stemming from the pandemic, the CCI has emerged as a strong economic regulator. It has imposed fines of approx Rs 15,000 crore on companies and individuals undertaking such practices. Interestingly, it only recovered 1% of it as most penalty orders have been appealed by the parties challenging its legality, ie, the proportionality of the fines imposed. Recently, the two cartel infringement orders re-opened the never really settled debate on optimal sanctions against cartels—whether the sanctions for cartels were characteristic of over-enforcement or under-enforcement?
The first case relates to cartelisation in the supply of industrial and automotive bearings to automotive manufacturers between 2009 and 2011. The CCI initiated an investigation based on a leniency application filed by Schaeffler, having noted that the Bearing Companies met to discuss pricing strategies for seeking price increase from various automotive manufacturers. While CCI held that they indulged in cartelisation, it decided against imposing a penalty concluding that “ends of justice would be met if the parties cease such cartel behaviour and desist from indulging in it in future”.
Please click here to read the full article by Vaibhav Choukse and Nripi Jolly, published in Financial Express.