Social & Public Interests Considerations as an Aggravating Factor?

While reading COMPAT’s judgment on the Aluminium Phosphide Tablets (ALP) Bid Rigging cartel, i came across a noteworthy statement of COMPAT. In para 66 of the Judgment, COMPAT stated that the said tablets were essential for the preservation of the food grains which usually go to the beneficiaries of the Public Distribution System and that cartelisation in regard to the said product is undoubtedly an aggravating factor, This aspect was deliberated while deciding on the proportionality of penalty levied. The amount of penalty to be levied is typically increased in case there are any aggravating factors. The question that arises is that should social & public interests considerations be included while deciding on the penalty to be levied or even the violation of competition laws. Further, it brings us back to the age old debate regarding the goals of Competition Law. Should Competition Law restrict itself to consumer welfare through economic efficiency or should non-efficiency social considerations also form part of the objectives of competition law? A discussion and deliberation on this aspect by the requisite competition adjudicatory bodies in India remains to be seen. We shall surely have a discussion on the goals of competition law in the blogs to follow.  

As far as the penalty guidelines of the European Commission & the Office of Fair Trading are concerned, the aggravating factors which may increase the amount of penalty to be levied are mentioned as follows:

  • where an undertaking continues or repeats or causes a similar infringement;
  • where an undertaking refuses to cooperate or obstructs the commission in carrying out its investigations;
  •  where an undertaking is the leader or instigator of the infringement;
  • involvement of director or senior management;
  • retaliatory or coercive measures taken against other undertakings aimed at ensuring continued infringement;
  • continuing infringement after start of investigation;
  • infringements committed intentionally rather than negligently;
  • repeated infringements by the same or other undertakings in the same group (recidivism).

 

The Competition Commission of India is yet to provide for guidelines as far as levying penalties is concerned. It remains to be seen whether the Commission follows the same approach as the European Commission and the Office of Fair Trading or broadens the purview of aggravating factors by including social & public interests considerations as well.

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