Mitigating chances of a CCI inquiry

Some steps for consideration

To avoid punitive action under the Competition Act, 2002 (“Competition Act”), Indian organizations need to build a strong culture of compliance. This should cover increasing awareness about the requirements of law, a robust code of conduct, and promoting fair business practices as also individual conduct while interacting with competitors.

Some specific considerations include:

  • Seek employee undertakings with regards to compliance with the Competition Act.
  • Develop an anti-trust law compliance manual – Such a manual should ideally contain the following: introduction to the Competition Act and key requirements under the law, outline businesses, business processes and key personnel that carry high risk; dos and don’ts for the employees, expected behaviour while dealing with competitors, suppliers, dealers, traders, etc.
  • Create better awareness through regular training programs for competition law compliance – A broader programme should be designed for all employees and specific programs can be developed for key business roles that have higher perceived compliance risks (such as teams that interact regularly with the competition, customers, and suppliers). These programs should be focused on educating the participants on potential infringements and how to avoid them. Some examples of infringements include salespeople generally buying ‘shelf space’ for their products and imposing restrictions on wholesalers and retailers. This kind of conduct is exclusionary in nature as it prohibits the wholesaler/retailer from stocking competitors’ products. Other examples include informally discussing prices and promotional schemes with competitors at industry events or social gatherings. Ideally, such training programmes should be conducted every six months and reviewed annually.
  • Closely monitor business information shared at meetings with trade associations, which bring together key competitors – At the very minimum, the agenda of any such meeting should be vetted by the legal counsel of the company and details of the meeting’s discussion should be shared with the legal counsel.
  • Review all trade association memberships and prepare specific guidelines for participation in such meetings.
  • Conduct mock raids to sensitize employees to the possibility of sudden scrutiny by the regulator.

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Authored by: Amit Bansal, Partner, Deloitte India

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