India announced the penalty guidelines for anticompetitive conduct in early March, giving the antitrust watchdog the discretion to impose penalties based on global turnover. While the Competition Commission of India (CCI) can impose a penalty of up to 30% of the average relevant turnover, the guidelines enable the watchdog to penalise companies at 10% of their global turnover.
This could include violations such as gun-jumping, non-compliance and misrepresentation. Targeting global turnover is aimed at curbing the antitrust conduct of multinational companies, especially in the digital space.
On the flip side, however, the penalty guidelines allow for adjustments in the penalty amount based on aggravating and mitigating factors. These factors could include the duration of the violation and co-operation extended by the parties during the investigation.
In addition to the penalty guidelines, the Ministry of Corporate Affairs notified three additional provisions of the Competition (Amendment) Act on 6 March. This included regulations on determining turnover or income, as well as enabling regulations for settlement and commitments. The regulation on turnover determination specifies earnings from sales, revenue and other operating income. Other income, indirect taxes, trade discounts and intra-group sales have been excluded.
The settlement mechanism enables companies to negotiate with the CCI for lesser penalties. In the case of commitments, the CCI can close investigations following mutually agreed modifications to business practices.
Regulations governing both settlement and commitment have established a fee structure. They also define the reasons why applications can be rejected by the antitrust watchdog. The regulations also specify when applications for settlements or commitments can be made. Additionally, they outline the various factors the CCI will consider when assessing the terms of settlement or commitments.
