Individual Liability for Competition Law Violations

At para 20 of the order of the Competition Commission of India in the complaint filed by Micromax against Ericsson, the Commission not only directed the Director General to investigate if Ericsson has violated the Competition Act but also to investigate against the persons who are responsible for the same. Further, the Commission states that if the opposite party has contravened any provision of the Competition Act, 2002 then it shall fix responsibility for the persons who were incharge and responsible for the same under Section 48 of the Competition Act.  This is in addition to the penalty that would be levied on the dominant undertaking. The question that comes to my mind is Whether there should be individual sanctions in abuse of dominance matters?

There has been a growing trend and discussions throughout the world pertaining to levying individual sanctions for violations of competition law.  The US antitrust agencies have been levying  individual sanctions through fines and imprisonment for quite a while.  On the other hand, the EU Commission at the moment only has the powers to prosecute undertakings. However,  in nineteen of the EU member states, there are provisions for sanctioning of individuals for violation of competition laws. There is a growing belief and understanding that the threat of individual sanctions would help increase cartel detection. Employees would be discouraged from indulging in cartel activities since the punishment for violation of competition laws would not be limited only to the company. There is a possibility that employees under the threat of fine and imprisonment would start filing leniency applications  for immunity and the same increases cartel detection.  Typically, individual sanctions have been imposed by certain Competition authorities around the world for hardcore cartel activities, failure to comply with orders, giving false information etc.

Lack of precedents and use of imprecise legal concepts leads to legal uncertainty as far as abuse of dominance is concerned. It is difficult to predict at times whether a proposed conduct of a dominant undertaking may end up being abusive or not. Also, at times the dominant undertaking may have no intention to indulge in abusive conduct and may not be even aware that it is indulging in abusive conduct. Also, while strategising future activities, it is not possible for companies to obtain absolute certainty regarding whether their conduct would be abusive or not. Therefore,  individual sanctions should not be imposed in abuse of dominance cases.


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