Government proposes changes to competition law

Government proposes changes to competition law

This will lead to faster disposal of cases

The Government of India, while introducing the Competition (Amendment) Bill, 2022 in the Parliament, has proposed several provisions for having 'value of transaction' as a criterion, to notify combinations to the Competition Commission of India (CCI).

The Competition Act was enacted in 2002. The provisions to provide more clarity include the introduction of a settlement framework, reducing the time limit for combination approvals, incentives to disclose information in a cartel investigation, abuse of dominant position before the CCI, and a change in definitions like 'enterprise' and 'relevant product market'.

The government also hopes to broaden the scope of anti-competitive agreements and the inclusion of a party facilitating an anti-competitive horizontal agreement under such pacts as well as substitute the provision of a penalty.

The provision providing for a penalty up to Rs.1 crore or imprisonment up to three years or both, in case of contravention of any order of the National Company Law Appellate Tribunal (NCLAT), would be replaced with the provision for contempt.

Another change is about reducing the time limit for approval of combinations to 150 days from the current 210 days. This would require the CCI to form a prima facie opinion within 20 days for expeditious approval of combinations.

The government also plans to introduce a 'Settlement and Commitment framework to reduce litigations' and incentivize parties in an ongoing cartel investigation for a lesser penalty to disclose information regarding other cartels.

Some other amendments comprise the appointment of the Director-General by the CCI with the prior approval of the Central government and the issuance of guidelines, including penalties to be imposed by the CCI.

In the 'Statement of Objects and Reasons' for the bill, the government stated there was significant growth in the Indian markets and a paradigm shift in the way businesses operated in the last decade.

The bill was introduced in the Lok Sabha by Minister of State for Corporate Affairs Rao Inderjit Singh. The Competition Law Review Committee was set up by the Ministry of Corporate Affairs, which is implementing the Act.

The statement read, "After reviewing the recommendations proposed by the committee and having public consultations to provide regulatory certainty and a trust-based business environment, it is considered imperative to amend the Act."