Competition (Amendment) Bill, 2022

Context: The Competition (Amendment) Bill, 2022 aims to improve regulatory set-up by increasing the Competition Commission of India (CCI)’s  accountability, giving it flexibility and enforcement efficiency.

• It seeks to amend the Competition Act, 2002

The key changes proposed by the Bill include:

Regulation of combinations based on transaction value:

• The Act prohibits any person or enterprise from entering a combination which may cause an appreciable adverse effect on competition. Combinations imply mergers, acquisitions, or amalgamation of enterprises.
• The Bill expands the definition of combinations to include transactions with a value above Rs 2,000 crore.

Definition of control for classification of combination:

• For classification of combinations, the Act defines control as control over the affairs or management by one or more enterprises over another enterprise or group.
• The Bill modifies the definition of control as the ability to exercise material influence over the management, affairs, or strategic commercial decisions.

Time limit for approval of combinations:

• The Act specifies that any combination shall not come into effect until the CCI has passed an order or 210 days have passed from the day when an application for approval was filed, whichever is earlier. The Bill reduces the time limit in the latter case to 150 days.

Anti-competitive agreements:

• Under the Act, anti-competitive agreements include any agreement related to production, supply, storage, or control of goods or services, which can cause an appreciable adverse effect on competition in India.

Settlement and Commitment in anti-competitive proceedings:

• Under the Act, CCI may initiate proceedings against enterprises on grounds of: (i) entering into anti-competitive agreements, or (ii) abuse of dominant position.
• The Bill permits CCI to close inquiry proceedings.
• The manner and implementation of settlement and commitment may be specified by CCI through regulations.

Relevant product market:

• The Act defines relevant product market as products and services which are considered substitutable by the consumer. The Bill widens this to include the production or supply of products and services considered substitutable by the suppliers.

Appointment of Director General:

• The Act empowers the central government to appoint a Director General to CCI. The Bill amends this to empower the CCI to appoint the Director General, with prior approval of the government.

Qualification of members of CCI:

• As per the Act, the chairperson, and members of CCI should have professional experience of at least 15 years in fields such as: (i) economics, (ii) competition matters, (iii) law, (iv) management, or (v) business. The Bill expands this to include experience in the field of technology.

Decriminalisation of certain offences:

• The Bill changes the nature of punishment for certain offences from imposition of fine to penalty. These offences include failure to comply with orders of CCI and directions of Director General about anti-competitive agreements and abuse of dominant position.

The Bill introduces certain new concepts into the field of Indian competition law, including Deal Value Thresholds, the changes to the definition of ‘control’, and mechanisms to settle certain violations of the Competition Act.

To increase the ease of doing business in India within the regulatory framework of the Competition Act, the CCI will need to provide timely guidance on the various concepts introduced in the Bill, and work together with all stakeholders to implement it.

Competition Commission of India

• Competition Commission of India (CCI) is a statutory body of the Government of India responsible for enforcing the Competition Act, 2002, it was duly constituted in March 2009.
• Competition Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations, which causes an appreciable adverse effect on competition within India.
• In accordance with the provisions of the Amendment Act, the Competition Commission of India and the Competition Appellate Tribunal have been established.
• The government replaced the Competition Appellate Tribunal (COMPAT) with the National Company Law Appellate Tribunal (NCLAT) in 2017.

Composition

• The Commission consists of one Chairperson and six Members who shall be appointed by the Central Government.
• The commission is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases. The Chairperson and other Members shall be whole-time Members.

Functions and Role of CCI

• To eliminate practices having adverse effects on competition, protect the interests of consumers and ensure freedom of trade in the markets of India.
• To give opinion on competition issues on a reference received from a statutory authority
• To undertake competition advocacy, create public awareness and impart training on competition issues.
• Consumer Welfare: To make the markets work for the benefit and welfare of consumers.
• Ensure fair and healthy competition in economic activities in the country for faster and inclusive growth and development of the economy.
• Implement competition policies with an aim to effectuate the most efficient utilization of economic resources.

Source: The Hindu