On April 19, 2018, CCI imposed a penalty on Eveready Industries India Limited (‘Eveready’), Indo National Limited (‘Nippo’), Panasonic Energy India Company Limited (‘Panasonic’) and their Association of Indian Dry Cell Manufacturers (‘AIDCM’) for colluding to fix prices of zinc-carbon dry cell batteries in India in violation of Section 3 of the Competition Act.[1]In an application dated May 25, 2016, made under Regulation 5 of the CCI (Lesser Penalty) Regulations, 2009 (‘Lesser Penalty Regulations’) read with Section 46 of the Competition Act (‘Leniency Application’), Panasonic admitted to the existence of a cartel arrangement with Eveready and Nippo to control the distribution and price of zinc-carbon dry cell batteries through AIDCM, which facilitated transparency between them by collating and disseminating data pertaining to sales and production of each manufacturer. On the basis of the Leniency Application, CCI directed the Director General (‘DG’) to conduct an investigation into the matter and submit a report. DG was also directed to investigate the role of officers who were in-charge of and responsible for the conduct of business at the time of contravention. During the course of investigation conducted by the DG, pursuant to the issue of a search warrant from the Chief Metropolitan Magistrate, Delhi, the DG carried out simultaneous search and seizure operations at the premises of Eveready, Nippo and Panasonic, and seized incriminating material. Subsequently, Eveready and Nippo also filed Leniency Applications with CCI. The DG also obtained statements on oath of certain officers of the companies.From the evidence gathered in the case, the DG found that Eveready, Nippo and Panasonic had an arrangement whereby they exchanged commercially sensitive information among themselves for the purpose of price coordination, and that this arrangement was in effect since 2008 until August 23, 2016, i.e., the date of search and seizure operations. Based on the DG’s investigation report along with the Leniency Applications filed in the matter, CCI noted that the manufacturers had admitted to cartelization. In order to increase prices, they mutually agreed on implementation modalities of maximum retail prices (‘MRP’). The price coordination among them encompassed not only the increase in MRP but also the exclusion of price competition at all levels in the distribution chain of zinc-carbon dry cell batteries to ensure implementation of the agreement to increase price. Further, they also agreed to control supply in the market to establish higher prices and indulged in market allocation by requesting each other to withdraw their products from certain markets. CCI found that individual officers of the companies regularly discussed and agreed on when to give effect to price increases during personal meetings as well as in meetings under the aegis of AIDCM, wherein senior management discussed various aspects of coordination. Further, there were several email/ fax communications among these individuals to show their friendly relations and deep commitment to adhere to the cartel arrangement.On the question of penalties, after considering the aggravating and mitigating factors in the case, CCI imposed a penalty of 1.25 times the profits of the companies for each year of the duration of the cartel. CCI was of the view that the Leniency Application filed by Panasonic was crucial in identifying significant details regarding the cartel activities including the market structure, manner of information exchanges, as well as names, locations and email accounts of key persons of the companies actively involved in the cartel activities. Panasonic was therefore granted 100% immunity and a nil penalty for full disclosure of information and continuous cooperation during the investigation. In relation to the Leniency Applications filed by Eveready and Nippo, CCI acknowledged that while these did not result in significant value addition, there was full and true disclosure of information as well as continuous and expeditious cooperation during the investigation. Accordingly, Eveready, which was second in filing the Leniency Application, was granted 30% reduction with a penalty of ₹ 171.55 crore (approx. US$ 26 million) and Nippo, which was third in filing the Leniency Application, was granted 20% reduction with a penalty of ₹ 42.26 crore (approx. US$ 6.3 million). In case of AICDM, CCI imposed a penalty at the rate of 10% of the average of its gross receipts for the last preceding three financial years, amounting to approximately ₹ 1,85,000 (approx. US$ 3,000). CCI also imposed a penalty on individual officers at the rate of 10% of their average income and reduced their penalties in proportion to leniency shown to the respective company.[1] Suo Motu Case No. 02 of 2016.