Cartelization hurts competition in various ways, and may be problematic from the perspective of a consumer at an atomistic level, and the entire economy from a more generalist perspective. While it is widely recognized as an antitrust offence, detecting cartels is challenging, especially since the agreement if often a tacit understanding. Deterrence is nevertheless imperative. Leniency programmes contribute to the deterrence objective by offering the means to help identify cartels by adopting a voluntary disclosure process based on an incentive system.
Primarily inspired from the success of the US regime, there have been arguments in favour of criminalization of cartel conduct with a justification that leniency programmes cannot be as effective without the former. The paper refutes this claim. This is supported by a discussion on the circumstances specific to the Indian regime, especially the Indian take on the leniency framework. The paper also explores how to strengthen the leniency regime in India, especially from a standpoint which focusses on deterrence and cartel prevention.
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Article has been written by Saurabh Gupta, 4th Year student at National Law School of India University.