Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a “partner” means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an “office” means an office of any such law firm. India/US Competition Laws – Cartel Enforcement A Comparative Primer Competition Commission of India Cartel Training at U.S. Chamber of Commerce Washington, DC – October 25-29, 2010 Charles H. Critchlow Baker & McKenzie LLP NYC

Key Statutes, Enforcement Authority, Hearing/Trade The Competition Act, 2002 (12 of 20033) as amended by The Competition (Amendment) Act, 2007 (39 of 2007) PREDECESSOR STATUTE Monopolies & Restrictive Trade Practices Act, 1973 The Sherman Act (1890) (15 USC The Clayton Act (1914) (15 U.S.C. Foreign Trade Antitrust Improvement Act (1981) Competition Commission of India Dhanedra Kumar, Chairperson A. K. Chauhan, Director General Antitrust Division, U.S. Department of Justice Christine Varney, Assistant Attorney General Hearings before the Commission Competition Appellate Tribunal Supreme Court of India Trials in U.S. District Court Appeals to Circuit Courts U.S. Supreme Court

Statutory Prohibitions Agreement in respect of production, supply, distribution…which causes or is likely to cause an appreciable adverse effect on competition in India Competition Act §3 (1) Contract, combination or conspiracy “in restraint of trade” Sherman Act 15 U.S.C. § 1 Direct, substantial, reasonably forseeable effect on US commerce Foreign Trade Antitrust Improvements Act, 15 U.S.C.§6a Any agreement directly/indirectly: (a) determing prices; (b) limiting or controlling production, supply, markets…or services; (c) sharing market through allocation; (d) resulting in bid rigging or collusive bidding presumed to have an appreciable adverse effect Competition Act §3(3) Illegal “per se”:  price fixing,  geographic, product market or customer allocation  agreement on terms/conditions of sale  when among horizontal competitors Case Law Interpretation Does not apply to joint venture agreements if they increase efficiency in production, supply, distribution, storage, acquisition or control of goods or provisions of services Competition Act §3(3) Joint Ventures analyzed under a “rule of reason” weighing impact of restraints against efficiencies and net competitive benefits Case Law Interpretation

Penalties/Exposure 10% of average turnover for 3 preceeding years or for a cartel [1] : 3 times profit or 10% of turnover for each year of continuation, whichever is higher Competition Act §27 Fines up to $100 million on each count 15 U.S.C. §2. (Under U.S. sentencing guidelines a base fine 20 of volume of commerce, adjusted by culpability score considering various factors) or twice the gain realized or the loss suffered by victims 18 U.SD.C.§3571(d) Fines on individuals by the Commission: rupees one lakh/day for each day of non-compliance, up to maximum of rupees ten crore Penalties by New Delhi Magistrate: up to 3 years in prison, fines up to reupees 25 crore, or both, for failure to comply with orders, upon complaint by the Commission Competition Act §42 Individuals fined up to $1 million Up to 10 years imprisonment on each count 15 USC. § 2 [1] Section 2 (c) defines Cartel to include an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or, trade in goods or provisions of services.

Investigation Procedure Commission can initiate inquiry on its own motion, upon receipt of a complaint,or upon a referral from central government Competition Act §19 If Commission is of the view that there exists a prima facie case, it shall direct the Director General to investigate and issue a report Competition Act §26 Director General for the purpose of inquiries is vested with the powers of civil court (including interviews, examinations) besides powers to conduct ‘search and seizure’ Competition Act §§ 41, 36 Antitrust Division generally empowered to enforce both criminal and civil penalties Antitrust Division can issue “civil investigative demands” to collect evidence and/or can petition a US Court to convene a grand jury FBI assistance, court-appoved search warrants and wiretaps available Grand jury issues document subpoenas executed by Justice Department, and can hear testimony; a variety of interview and immunity techniques are available

Leniency Programs Commission may impose a “lesser penalty” on someone who makes disclosure before DG issues his report Competition Act §46 Cooperation must be complete, information must be “vital,” with consideration to be given to “stage” at which person comes forward, quality of information, and facts and circumstances First applicant reduction up to 100%; second and third applicants providing “significant added value” may get reductions of up to 50% and 30% Reg. No. 4 of 2009 Full leniency for first to come forward, and its employees if an investigation has not yet begun (unless corporation coerced others or was originator), or if Division does not at the time have evidence likely to result in sustainable conviction and not unfair to others and report is a corporate act, is with candor and complete, unlawful acts were promptly terminated when discovered,cooperation is complete, restitution is made [remain exposed to single damages, no trebling] No leniency for later applicants