India's Cartel Penalty Practices, Optimal Restitution and Deterrence

Institute of Economic Growth Working Paper 424

33 Pages Posted: 1 Jun 2021

See all articles by Aditya Bhattacharjea

Aditya Bhattacharjea

Delhi School of Economics, University of Delhi

Oindrila De

Institute of Economic Growth

Date Written: March 28, 2021

Abstract

We review the cartel penalty and leniency practices of the Competition Commission of India (CCI), in light of the law and economics literature on optimal penalties, as well as current practices in different jurisdictions. Our analysis reveals that although India’s Competition Act allows for a much harsher penalty than other jurisdictions in cartel cases, the actual practices followed by the CCI are often inconsistent and non-transparent, resulting in a large number of court cases and very low penalty recovery. This inconsistency also weakens the leniency programme adopted by the CCI in order to induce cartelists to come forward with evidence. In the majority of cases, penalties fall short of restitution and deterrence benchmarks suggested by some earlier literature. We conclude with some suggestions to improve India's penalty and leniency regime.

Keywords: Cartel penalty, Leniency, Optimal deterrence

JEL Classification: L40, L41, L44

Suggested Citation

Bhattacharjea, Aditya and De, Oindrila, India's Cartel Penalty Practices, Optimal Restitution and Deterrence (March 28, 2021). Institute of Economic Growth Working Paper 424, Available at SSRN: https://ssrn.com/abstract=3855468 or http://dx.doi.org/10.2139/ssrn.3855468

Aditya Bhattacharjea

Delhi School of Economics, University of Delhi ( email )

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HOME PAGE: http://www.econdse.org/faculty/aditya/aditya.htm

Oindrila De (Contact Author)

Institute of Economic Growth ( email )

Delhi, 110007
India

HOME PAGE: http://iegindia.org/staffmembers/faculty/detail/3547/3

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