Competition Law

[Giri Aravind] The author is a student at the National University of Advanced Legal Studies. Introduction On December 9th, the Federal Trade Commission, (FTC) as well as dozens of states in the US, sued Facebook alleging that the company was involved in anti-competitive conduct by illegally maintaining its social network monopoly. The suit focuses on two major aspects – anticompetitive acquisitions and anticompetitive platform conduct. The federal regulator is seeking a permanent injunction in the federal court that could potentially break up Facebook. The statement by the FTC’s Bureau of Competition Director had stated that the actions of the company deny consumers the benefits of competition. He added that the aim of the suit was to roll back Facebook’s anticompetitive conduct and so that innovation and free competition can thrive. How does Facebook operate? To get a better idea of how Facebook established its presence and continues to dominate the industry, one must look at how the company stops an emerging competitor in this sector. Facebook usually resort to one of the three methods – buy the competitor, or deny access to its data, or copy and apply. The former simply involves spending billions to purchase any company that might be a threat to their dominance. The acquisition of Instagram in 2012 for $1 billion, and WhatsApp in 2014 for $19 billion, are two big examples of the aforementioned in the last decade. Although investors were quite skeptical about the latter as WhatsApp was a mere messaging app that provided no ads and costs less than a dollar a year, Facebook had effectively neutralized the prospect that these companies might enter the personal social networking market and threaten their share. When buying a company doesn’t work, Facebook simply denies access to users’ data on third-party software applications. When users sign up on a new website, Facebook often gives the option of following their Facebook friends — a feature enabled through Facebook’s application program interface (API). However, Facebook has made key APIs available to third-party apps only on the condition that they refrain from providing the same core functions that Facebook offers. When Twitter launched Vine in 2013, Facebook locked out their social API functions, reportedly at the direction of Mark Zuckerberg himself. And when buying out a company or denying access to user data doesn’t work, Facebook simply copy and apply new features into their existing social networking applications. In 2013, when Snapchat turned down a $3 billion offer from Facebook, they introduced a host of new features including face filters and stories in Instagram, turning them into a potential Snapchat-killer. Similarly, allowing users to upload short videos on Instagram eventually led to the end of Vine. Big Tech and Antitrust Law The suit against Facebook isn’t going to the final legal action the FTC or the Department of Justice (DOJ) will be made against the big tech giants. Since 2019, Amazon, Apple, Google, and Facebook have been the target of various governmental authorities who are investigating whether these four companies have used their size and wealth to quash competition and expand their dominance. Amazon has been accused of favouring its own products by taking advantage of data it collects from sellers to develop its offerings. Apple has been alleged to have exploited its control over the app store by excluding rivals and charging app developers high fees, while Google’s monopoly over the online search and marketing industry has been questioned. Although these investigations had only led to Congressional hearings and committee reports, the suit against Facebook marks the beginning of a major action taken by FTC against the Big Tech in recent years. Previously, The United States v. Microsoft Corporation, 253 F.3d 34 (D.C. Cir. 2001), was the most prominent case against a major tech company. Microsoft was sued by the DOJ and a coalition of 20 state attorney generals for violating federal antitrust law. Microsoft was the most dominant software firm in the 1990s, but they hadn’t initially ventured to the internet browser market. But in 1995, Microsoft released their own free browser, the Internet Explorer, and the next year they bundled it with the Windows 95 operating system. Within a year, they gained a 10% market share and there were allegations that Microsoft had made it increasingly hard for users to use other web browsers. Microsoft lost the case against the government and the court ordered a breakup of Microsoft as its remedy. But Microsoft appealed and by June 2001, a federal appeals court decided to reverse the order. By November, Microsoft and DOJ had reached a settlement. Interestingly in 2014, Novell, another American software company lost its antitrust case against Microsoft when the US Supreme Court declined to hear an appeal by the company. Novell had originally filed the case in 2004 alleging that Microsoft had deliberately withheld Windows technical information in order to prevent any competition in the applications market. This was brought out to light vide a 1994 memo from Bill Gates, who directed that the company should withhold namespace extension APIs in their operating system from its competitors in order to gain market advantage for Microsoft Word. However, the Court held that a monopolist company had no duty to cooperate with its competitors, and Microsoft’s act did not constitute antitrust behaviour. Thus, the two cases involving Microsoft are really in great tension with each other. The earlier US v. Microsoft had held that a firm with market power does have a duty to deal fairly and non-competitively with those who used their platform, while the court took a contrasting view in the Novell case. The decision in the suit against Facebook would depend on which of the two cases the ruling judges give credence to. Facebook’s dominance in the Indian Marketplace The sheer volume of users and the untapped market potential have made South Asia a favourite marketplace for most of the Big Tech companies. This region, especially India, has seen a surge in usage of in smartphone use and Internet access and

[By Shivek Sahai Endlaw and Tanya Aggarwal] The authors are students at Amity Law School Delhi, GGSIPU. Introduction In November 2020, WhatsApp announced the rollout of their new Unified Payments Interface (‘UPI’) enabled digital payments feature, ‘WhatsApp Pay’ in India. WhatsApp Pay will allow the users of WhatsApp messenger to send and receive monetary payments to their contacts, in addition to the existing instant-messaging, phone, and video–calling services. This feature will be automatically installed in the existing user’s WhatsApp Messenger and will come pre-installed as part of the WhatsApp messenger for all new and future users. The manner in which these two distinct services are offered as part of one application raises certain anti-competitive concerns. An information was filed before the Competition Commission of India (‘CCI’) accusing WhatsApp of technically tying its messenger services with its new payments feature. Technical tying refers to a process where a dominant entity offering a product (‘tying product’) integrates it with a separate and distinct product (‘tied product’) in order to gain an advantage in the ‘tied products’ market. Such an arrangement is prohibited by Section 4(2)(d) of the Competition Act, 2002 (‘Act’) as it can have an adverse impact on competition in the tied product’s market. The CCI ruled in favour of WhatsApp and refused to investigate these allegations for being premature among other reasons. In this post, the authors argue that a case of technical tying against WhatsApp is justified. Further, the authors argue that the decision of the CCI was contrary to anti-trust jurisprudence related to tying in other developed jurisdictions. Test to Establish Technical Tying  In order to establish a case of technical tying, a regulator must be satisfied that (i) the tied products are two separate products (ii) the offeror is dominant in the market for the tying product; (iii) customers do not have a choice to only obtain the tying product independently of the tied product; and  (iv) the arrangement can have anti-competitive effects in the market. The CCI held that the “market for Over-The-Top (OTT) messaging apps through smartphones” and the “market for UPI enabled Digital Payments Apps in India” are separate and hence the two services being offered by WhatsApp constitute two separate products. Further, the CCI held that though WhatsApp is a dominant entity in the market for OTT messaging applications, the other two conditions were not satisfied and hence a case of technical tying was not made. According to the authors, the CCI erred in holding that the third and fourth conditions to establish a case of anti-competitive tying are not met. Users Choice to Obtain the Tying Product Independently  The third condition to prove a case of technical tying states that customers should not have a choice of obtaining the tying product without the tied product. The CCI held that this condition is not met, since WhatsApp users are free to use any other UPI enabled digital payments applications available in India. The CCI reasoned that the element of coercion was missing since installing the WhatsApp messenger services does not mandate the consumer to use WhatsApp Pay exclusively. The reasoning afforded by the CCI for rejecting the presence of the third condition is flawed for two reasons. First, the CCI incorrectly applied the test to detect the presence of the third condition. The correct application to test the presence of the third condition is explained by the European Commission (‘EC’) in the Microsoft Windows Media Player case (COMP/C-3/37.792). In this case, the EC held that the third condition is met once the regulator is satisfied that the tying product is not available for purchase de hors the acquisition of the tied product. This aspect was not examined by the CCI. In the present case, the WhatsApp Pay feature has been automatically installed for all existing users of WhatsApp messenger and will come pre-installed as part of WhatsApp messenger application for all new users. Both the primary application stores from which the WhatsApp messenger can be downloaded/updated do not offer the messaging and the payment products separately. Therefore, the consumer is indeed forced to purchase the two products together and not independently. This satisfies the presence of the third condition to establish a case of tying. Second, the CCI erred by rejecting the presence of this condition basis the lack of coercion on consumers to use the payment feature. The rationale behind this is explained by the Court of First Instance in the Microsoft Internet Explorer Case (Case T-201/04). According to the Court, it is irrelevant whether the users are forced or coerced to use the tied product. This is because the automatic or free availability of the tied product itself has the capability to foreclose competition in the tied product’s market. Therefore, the regulator should only assess whether the consumers of the tied product are likely to use the tied product over the other similar products of competitors due to the technical tying arrangement. In the present case, the CCI should have investigated the possible foreclosure of competition in the digital payments market due to the automatic availability of WhatsApp Pay to millions of people who use the WhatsApp messenger. However, this aspect was also not examined by the CCI. Thus, the authors opine that the CCI erred in holding that the third condition to establish a case of tying was not met. The Tying Arrangement Can Have Anti-Competitive Effects in the UPI Market  The fourth condition to establish a case of tying states that the tying arrangement can have an anti-competitive effect in the tied product’s market. The CCI held that this condition was not met since there is a status-quo bias in favour of the incumbent UPI enabled digital payment applications like Google Pay, Paytm, Phone Pay, Amazon Pay. Status-quo bias is the propensity to stay the course instead of doing something different. Further, the CCI held that since the WhatsApp Pay feature was currently operating in beta version in India, the information furnished was premature and hence liable to

[By Yavipriya Gupta] The author is a student at Hidayatullah National Law University. Introduction The competition landscape in India is governed primarily under the Competition Act, 2002 (the Act), with the Competition Commission of India (CCI) holding the exclusive jurisdiction to adjudicate upon anti-competitive conduct of business entities, while certain sector-specific regulators bear the responsibility to regulate competition within their respective sectors. Although the authorities share a common objective of protecting and promoting competitive conduct in the market, there lies a significant difference in the approach adopted by the two. This has often led to several jurisdictional conflicts between the two bodies, clearly heralding the need for judicial intervention to resolve this tussle. On 20 May 2020, the Delhi High Court in Monsanto Holdings Pvt. Ltd. v. Competition Commission of India (Monsanto) decided on one such jurisdictional conflict while examining the applicability of the Supreme Court (SC) judgment in CCI v Bharti Airtel and Others. (Bharti Airtel) to the dispute. It held that a Controller of Patents (Controller) under the Patents Act 1970 (Patents Act) is not a sectoral regulator and hence, cannot exercise jurisdiction in a manner similar to Telecom Regulatory Authority of India (TRAI), as in the Bharti Airtel case. While there exists a multitude of sectoral regulators that often cross path with the CCI, this article seeks to analyze the jurisdictional conflict in the light of Monsanto and its interpretation of the Bharti Airtel case concerning a dispute between the TRAI and the CCI while also exploring the impact of the decision on the jurisdictional tussle between IPR authorities and the CCI. Monsanto Case Factual Context The matter stems from an order passed by the CCI under section 26(1) of the Act in a dispute relating to the trait fee charged by Monsanto Holdings and its allies as well as the other terms and conditions imposed by it upon the licensees for using their technology to manufacture Bt. Cotton Seeds. The CCI passed an order holding that Monsanto maintains a dominant position in the concerned relevant market and has prima facie abused it, thereby violating section 4 of the Act. The aforesaid order was challenged by Monsanto before the Delhi High Court, primarily on the ground that CCI does not entail jurisdiction to examine the issues raised before it as they relate to the exercise of rights granted under the Patents Act and hence must first be examined by the Controller. While an earlier decision of the Court in Telefonaktiebolaget L.M. Ericsson v Competition Commission of India & Another (Ericsson) clarified that jurisdiction of the CCI in such an issue is not excluded, Monsanto argued against its application stating that the position of the Controller in the instant case, is similar to the TRAI as the Controller also exercises powers to regulate the grant of patents and exercise of rights under the Patents Act. SC in its decision in Bharti Airtel had observed that the CCI could exercise its jurisdiction only after the TRAI had returned the findings based on which any order could be passed by the CCI. Commensurate with the same, it was contended that SC’s decision essentially overrules Ericsson and without effective findings returned by the Controller, the CCI’s jurisdiction remains ousted. The Decision of the Court The court, while repudiating the contentions furthered by Monsanto, upheld the position established in Ericsson. It was observed that the expertise of TRAI in the field of telecommunications is materially different from the expertise that a Controller bears in regard to the grant of patents and exercise of patent rights. Besides, SC’s decision in Bharti Airtel maintains that the CCI has been entrusted with a function to deal with certain specific kinds of anti-competitive conduct and to that extent, its function is distinct from that of TRAI. Hence, it cannot be construed to mean that the jurisdiction of the CCI was ousted by virtue of the telecom industry being regulated by a statutory body. Bharti Airtel’s Application- A Test for Sectoral Regulators Before reaching its final decision in the case, the Court took an in-depth view into whether SC’s decision in Bharti Airtel effectively overrules Ericsson, and thus addressed one critical issue that remained hitherto overlooked. Due to the lack of a definite meaning of the term sectoral regulators, there has been a lot of ambiguity in resolving jurisdictional conflicts involving such regulators that might not necessarily be sector-specific, viz. the Controller of Patents in the instant case. The court attempted to resolve the aforementioned ambiguity following an analysis of the role of the controller of patents and that of the TRAI, thereby laying down a standard to be met in order to be considered a sectoral regulator. Role of the Controller of Patents It is pertinent to note that in the case of Bharti Airtel, the subject matter of dispute was the non-provisioning of Points of Interconnection (POIs) in the telecom industry, observing which the court in Monsanto held that the subject matter of the disputes therein fell essentially within the domain of TRAI, adding that the same cannot be stated for the Controller in the present case. Despite performing several functions similar to TRAI, the Controller’s role as a regulator was observed to be substantially different due to the absence of a specific industry being regulated by the latter. In the author’s opinion, a bare perusal of section 140 read with Chapter XVI of the Patents Act may although prima facie indicate that the Controller has an authority to determine whether a term included in a license issued by any party is restrictive or not, a closer analysis suggests that the act does not confer such authority upon the Controller. Hence, such disputes are likely to be decided by a civil court, further indicating the non-uniformity in the functions performed by the Controller and the TRAI. Functions Performed by TRAI The court affirmed that the TRAI performed two distinct kinds of functions. The first is essentially recommendatory in nature while the rest of the

[By Mahima Chhabrani] The author is a student at West Bengal National University of Juridical Sciences, Kolkata (WBNUJS). Introduction Section 26(1) of the Competition Act, 2002 (hereinafter Act) confers power on the Competition Commission of India (hereinafter CCI) to order an investigation when it finds prima facie contravention of the Act. The said investigation is in no way final but a mere departmental inquiry to dig deeper into the case.[i] Furthermore, before passing the order of investigation to the Director-General (hereinafter DG), the CCI, in most cases, relies on the information produced by the Informant in forming a prima facie opinion.  The aim of this article is to determine who has a duty to discharge the burden of proof, the Informant, or the Respondent, analyzing whether CCI has adopted a uniform standard of proof to determine prima facie violation. Standard of Proof of ‘Prima Facie’ Violation In this part of the article, the author has analyzed the approach of CCI in placing its reliance on the evidence to direct an investigation or close the case that comes before it, under section 26(1) and 26(2) of the Act respectively. It is well settled that on receiving information and documents from the Informant, the CCI cannot evaluate and analyze the evidence on its merit.[ii] This can only be done after the DG submits a detailed report of investigation to the CCI.[iii] Therefore, it is imperative to understand the concept of a prima facie violation and the procedure by which the CCI evaluates complaints. An Appellate Tribunal gave an important ruling in the case of Reprographic India vs. CCI[iv] where it was held that it is necessary for the Informant to “…demonstrate substance in the allegations…” in order to initiate an investigation and that hurling bald accusations would not fall within the ambit of a prima facie violation.[v] The interpretation of this ruling makes it clear that the burden of proof lies on the Informant at this initial stage. In another case of Maruti Suzuki,[vi] the CCI took an opposite view in which an anonymous mail was sent to CCI alleging Maruti Suzuki’s involvement in anti-competitive practices.[vii] The CCI took a suo moto cognizance and thereby shifted the burden of proof on the OP for its failure to mention the reasons for the imposition of penalties only for the violation of guidelines.[viii] A plain reading of the above two cases in conjunction suggests that CCI has a divergent approach in forming a prima facie opinion. Although the Reprographic India case was in the right direction, the ruling does not explain what this ‘discharging of proof’ and ‘substance in the allegations’ by the Informants mean. The lacunae in the ruling of the Reprographic India[ix] case can be seen to be carried forward in a recent case of Delhi Vyapar[x] that came before the CCI. In this case, the Informant alleged contravention of section 3(4) read with section 3(1) of the Act. In order to find out a prima facie existence of vertical agreements between the MNCs (Amazon and Flipkart) with their affiliated traders respectively, CCI relied on the screenshots of the SMSes adduced by the Informant and on that basis, it launched an investigation against Amazon. It did not give an opportunity to Amazon to present its objections against the evidence produced by the Informant. It is surprising that Amazon filed a suit in the Karnataka High Court and claimed that the subject matter in the SMSes is not mobile phones as alleged by the Informant but fitness equipment.[xi] When such an objection related to the veracity of the subject matter of the evidence is raised by the OP, it raises some serious doubts about the mechanism adopted by the CCI in basing its reliance on the information given by the Informant. This case, prima facie, required an in-depth assessment and screening process for the evidence provided. This screening was regarding the veracity of the adduced evidence by the Informant which is well within the power of the CCI, therefore the CCI could go into the merits of the evidence. It is indicative of the fact that there needs to be a standard mechanism that CCI should be mandated to rely on to determine the prima facie violation of the provisions of the Act. Another noteworthy point is that in the case of All India Online Vendors Association[xii], the complaint was filed on similar grounds, but the CCI did not find any prima violation, hence closed the matter under 26(2). In this case, the CCI took a very lenient approach while closing the matter by stating the reason that the e-commerce ecosystem was a nascent area that is still developing against a more aggressive stance as was seen in the Delhi Vyapar[xiii] case. In this case, the CCI closed the matter without stating the substance in the allegation and the reasons for finding a prima facie case. Stating the reasons briefly regarding the reliance on the evidence before ordering an investigation is a ‘sine qua non’ under section 19  and 26 of the Act as it shows a careful application of ‘judicial mind’ by the CCI.[xiv] The ruling of Reprographic India[xv] case was not applied in the case at hand. These deviations in approaches raise doubts in the methodology and process by which CCI looks into the complaints. Therefore, it is imperative that to avoid such contradictions in the stance taken by the CCI, the term ‘substantiated allegations’ be defined. Once this term is defined, a certain level of uniformity in the process of filtering the evidence and relying on it while screening a complaint received by an Informant. This becomes a very crucial step as this step is the deciding factor in forming a prima facie for investigation. This will further help fix the problem discussed above that arose in cases where complaints in two different cases were filed on similar grounds. However, CCI took two completely different unjustified stances. Conclusion From the above discussion, it is clear that CCI has not

[By Hitoishi Sarkar and Mr. Animesh Anand Bordoloi] Hitoishi is a student at Gujarat National Law University and Animesh is pursuing his LL.M from the National University of Singapore (NUS), Law. On 4th March 2020, the National Company Law Appellate Tribunal (India) (NCLAT) set aside an earlier order by the Competition Commission of India (CCI), which refused to investigate Flipkart India on charges of abuse of dominant market position under section 4 of the Competition Act, 2002. The informant’s primary contention was that Flipkart India sold goods to companies such as WS Retail Services Private Limited owned by its founders at heavily discounted rates and the same companies later listed these goods on Flipkart’s e-commerce platform thereby making it a clear case of preferential treatment. The decision is significant because it may open the floodgates of antitrust litigation for e-commerce companies such as Amazon, which are also battling increasing anti-trust litigation in Indian courts.[[i]] This post aims to expound on the broader implications of this decision for the e-commerce sector while also addressing the Indian statutory framework on competition law. Background The CCI has recently stepped up its enforcement activities in the e-commerce space. For instance, in January 2020, it released a Market Study on E-Commerce, which identified platform neutrality as a critical concern in the operation of such platforms. The Study is significant as for the first time it analyzed the issue of preferential treatment meted out to certain vendors’ by e-commerce platforms from the standpoint of anti-trust laws. However, interestingly the CCI had, in its earlier decision which was set aside by the NCLAT, refused to investigate Flipkart despite its alleged preferential treatment to promoter owned companies such as WS Retail Services Private Limited, holding that “the terms and conditions on which sellers access the Flipkart marketplace are standard and the incentive is based on objective criteria such as quality of product and volume and value of sales.” Likewise, the Ministry of Commerce & Industry vide its revised FDI policy dated 26th December 2018, prohibited e-commerce platforms from exercising ownership or control over the goods purported to be sold on their platforms. However, this policy has been heavily critiqued for its implications from the standpoint of customer dissatisfaction. Legal Analysis The NCLAT concurred to the appellant, in this case, the All India Online Vendors Association’s (AIOVA) argument of there being a ‘prima facie’ case of abuse of dominant position under section 4(2)(a)(ii) of the Competition Act, 2002. This is for the reason that Flipkart India Private Limited sold goods to its promoter owned company (WS Retail Private Limited) at unjustifiably low rates. Interestingly, the evidence of such predatory pricing was drawn from an earlier order of the Income Tax Appellate Tribunal (ITAT)(Bangalore Bench), which found that the parties purchasing products from Flipkart India were unrelated third parties, including WS Retail Services Private Limited. The CCI’s order refusing an investigation against Flipkart hinged on the aforementioned ITAT’s exoneration of Flipkart. However, the NCLAT rejected the CCI’s misplaced reliance on the ITAT’s order, ruling that the ITAT was “dealing only with the question of applicability of the concerned provisions of the Income Tax Act to the facts which were found by the Assessing Officer.” Furthermore, the NCLAT found the facts recorded in the same ITAT order to be of significant relevance to its adjudication as the facts provided scathing evidence against Flipkart of having sold goods to WS Retail Private Limited at preferential rates. For instance, the ITAT order records that Flipkart’s business model was based on a practice of “buying goods at say Rs.100/- and selling them to the retailers at Rs.80/-.” Such practices as was highlighted by the Assessing Officer before ITAT contrary to popular opinion was not an ‘irrational economic behavior’ of suffering continuous losses but that of predatory pricing which was used to enhance branding as well as market intangibles so as to increase their valuations, leading to more venture capitalist’s investment. Such predatory pricing by established players in the market, is additionally harmful to the small retailers and could lead to a contravention of section 4(2) and 3(4) of the Competition Act. CCI’s dilemma in investigating Flipkart and other such entities for anti-competitive practice is further aggravated by the absence of the definition of “competition” from the Competition Act, 2002. Although the CCI has treated “competition” by leaning towards the US approach of following a consumer welfare standard which focuses on the price of goods and services rather than the number of players in the market, the theoretical ambiguity around the meaning of the term has also clouded the understanding of “dominance” given that its assessment depends significantly on the economic considerations. It is argued that while dealing with digital firms the meaning of dominance must be extended to include non-price considerations thereby extending the ambit beyond the traditional metrics so that the unique nature of online services provided by digital platforms is kept in check.  However, if we are to rely on the international understanding of dominance, it is pertinent here to note the ruling of the European Court of Justice in the United Brands v. Commission, which defined dominance as “a position of economic strength enjoyed by an undertaking, which enables it to prevent effective competition being maintained on the relevant market by giving it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers.” Flipkart’s practices scratch the ambit of this definition given their multi-layered business model which has helped them achieve deep discounts to see off competitions, at the risk of making huge losses, which also points out the economic strength enjoyed by such platforms. Interestingly, the Supreme Court, in Uber India Systems v. Competition Commission of India, had held such losses bereft of any economic sense suffered by companies to see off competitors as a prima facie indication of their position of strength. It would only be logical given the current circumstances to extend the findings to e-commerce platforms as well.

[By Kirti Talreja and Abhishek Singh] The authors are students at National Law University, Odisha Introduction The Competition Act, 2002[i] (hereinafter “The Act”) was enacted with the objective of ensuring healthy competition and eradicating anti-competitive practices in the market. Competition authorities across the globe have considered cartels as the most heinous form of anti-trust offence. Eradicating cartels have been the top-most priority of most of the jurisdictions and the Competition Commission of India (‘hereinafter’ “The Commission”) has been no exception to it. However, over time, detecting and prosecuting cartels have become a challenging task for fair trade regulators. Henceforth, in a bid to aid enforcement, various jurisdictions, including India, have adopted leniency regimes to encourage undertakings involved in cartels to disclose information about any existing cartels in exchange for complete or partial immunity. Since the enactment of the legislation, the Act has gone through a series of amendments taking valuable insights and considerations from multifarious developed jurisdictions across the globe. In 2017, certain amendments were also made to the Lesser Penalty Regulations[ii] which considerably increased the scope of the powers conferred upon the Commission regarding leniency programmes in India. Why Leniency? Cartels are associations of manufacturers or sellers whose objective is to maximize their profits collectively through price-fixing, limiting supply, or any other practices. These types of agreements and associations deter healthy competition in the market thereby hampering the sustenance and growth of competitors in the market. For instance, a market study revealed that the end consumers pay, on average, 49% more than the authentic price of the products.[iii] It is appalling to note that, 249 cartel cases investigated in 20 developing countries exhibited that the excess profits bagged from the cartels were equivalent to 1% of the GDP of various countries.[iv] Cartels have been extremely difficult to prove as the unfolding of the events to detect a cartel is based solely on circumstantial evidence like communications among the firms, variations in bid quotations not justified by cost considerations, and minutes of the meetings held with competitors, etc.[v]The European Union, bestowed with a robust and erudite anti-trust regime, detects 70-75% of cartel cases spurred by undertakings seeking leniency before the Commission.[vi] Henceforth, the fair-trade regulators worldwide supplement cartel detection with a robust leniency regime. The leniency clauses are a type of whistle-blower protections that proffer undertakings involved in cartels an opportunity to take a step forward and disclose information about the cartels. The undertakings have a chance to provide substantial evidence and cooperate with subsequent investigations, in exchange for immunity or leniency in the penalty imposed, which would have otherwise faced stringent action if the existing cartel would have been disclosed by the Commission itself. Section 46 of the Act, which provides for the leniency clause, reads as follows: “The Commission may, if it is satisfied that any producer, seller, distributor, trader or service provider included in any cartel, which is alleged to have violated section 3, has made a full and true disclosure in respect of the alleged violations and such disclosure is vital, impose upon such producer, seller, distributor, trader or service provider a lesser penalty as it may deem fit, than leviable under this Act or the rules or the regulations.”[vii] This clause has been adopted with the prime motive of unveiling the cartels existing in the market and to deter undertakings from entering into anti-competitive agreements. The intent, based on prisoner’s dilemma, is to create a sense of distrust among the participants involved in cartels as there is a perpetual threat of disclosure of the cartel agreement by any of the participants to the authorities concerned. Pertinently, before delving into the lesser penalty regulations, the Commission must inoculate certain essential conditions in its orders such as the nature of the information,i.e., it must be a ‘vital disclosure’[viii], the cooperation of the applicant must be genuine, full and expeditious, and the relevant evidence must not be hampered with or manipulated, to mention a few.[ix] The Indian Leniency Regime: A Snail’s Walk The USA was the first country to adopt the leniency practices. This was done with the objective of alleviating the problems faced by the competition authorities in detecting cartel arrangements. A two-fold increase in the detection of such cases was witnessed by the country within 3 years. A market study exhibited that with the adoption of the leniency regime, the rate of cartel formation alleviated by a massive 59% and the cartel detection augmented by 62%.[x] However, the Indian Competition Law regime has not been successful in emulating success as that of the USA. The reason is the excessive discretionary powers bestowed upon the Commission in India. The Regulations state that the Commission thus enjoys a very vast discretion to decide the penalty to the first applicant, on the basis of parameters like vital disclosures, stage of the application, and subsequent confessions. Furthermore, “any other condition” parameter is rather ambiguous and adds a layer of uncertainty, thereby acting as a barrier to the undertakings involved in cartels to approach the Commission. Contrast this, the leniency regime in developed jurisdictions like the USA and Australia have well-formulated provisions wherein the first undertaking to disclose about the cartel gets leniency.[xii] Orders of the Commission- A String of Irregularity Continues  The ineffectiveness of the Commission in passing orders concerning leniency programmes can be gauged by the non-uniformity in all the five leniency orders that have been passed in the last 10 years of the clause’s inception. The first leniency order was passed by the Commission in 2007. In a suo-motu action of “Cartelisation in respect of tenders floated by Indian Railways for supply of brushless DC Fans and other electrical items”, the Commission penalized 3 undertakings inclusive of their officeholders for bid-rigging. The Commission granted one of them a 75% markdown in the total leviable penalty for becoming an approver and adding significant value to the determination of the existence of a cartel. However, despite Pyramid being the first applicant to plea leniency, the Commission did not scrap