Provide incentives to companies for competition compliance systems: CII

NEW DELHI: Companies should be provided with incentives to put in place systems to ensure compliance with competition norms and the same should be taken into account by fair trade watchdog


before determining penalties on any erring entities, according to industry body CII.

Competition Commission of India has been asking companies to put in place competition compliance programmes, to ensure that their business practices do not violate existing norms.

CII said the fair trade regulator should provide incentives to enterprises for instituting competition compliance programmes within the competition law framework.

The industry body has given its recommendations to the Parliamentary Standing Committee on Finance, which is reviewing the Competition (Amendment) Bill, 2012.

In a statement, CII said the Commission should consider framing penalty guidelines which could include existence of compliance programmes as a mitigating factors while calculating fine on an infringing enterprise.

“This requires immediate attention so that Indian industry is assured that Competition Commission of India will consider the competition compliance programmes put in place by companies, before determining penalties, as is the practice in most countries,” CII Director General Chandrajit Banerjee said in a statement.

The Commission, which keeps a tab on unfair business practices in the market place, in recent times has imposed substantial penalties on various companies and trade associations for violation of competition rules.

CII observed India’s Competition Act is silent on how competition compliance system may help a company reduce the quantum of fines.

“… there are no provisions under the Competition Act and its allied regulations which set out the criteria that are to be taken into consideration while deciding on the quantum of fines to be imposed on entities which have infringed competition law,” it said.

One of the suggestion is that the Commission should consider laying out clear guidelines on what would constitute an effective and credible competition compliance programme.

Further, the industry grouping cited examples of countries such as Canada, Australia and the UK, where an effective compliance programme has been recognised as a mitigating factor while deciding on penalties.