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Current Affairs 2023
The Competition Amendment Bill 2023 is a proposed legislation in India aimed at amending the Competition Act of 2002. The bill seeks to strengthen the regulatory framework for competition in the country, by introducing several new provisions such as the imposition of penalties for non-compliance, the establishment of a Competition Commission of India (CCI) Appellate Tribunal, and the promotion of competition advocacy. The bill is expected to enhance competition in the Indian market and create a level playing field for businesses.
Apr 05, 2023
4 min read
The Competition (Amendment) Bill, 2023 seeks to amend the Competition Act, 2002, to regulate mergers and acquisitions based on the value of transactions. Deals with a transaction value of more than Rs 2,000 crore will require the Competition Commission of India's (CCI) approval. The Bill proposes to reduce the timeline for the CCI to pass an order on such transactions from 210 days to 150 days.
The Bill expands the scope of entities that can be adjudged to be a part of anti-competitive agreements. Currently, enterprises or persons engaged in similar businesses can be held to be a part of anti-competitive agreements. The Bill expands this to include enterprises or persons who are not engaged in similar businesses. The Bill provides a framework for settlement and commitment for faster resolution of investigations of anti-competitive agreements and abuse of dominant position.
The Competition (Amendment) Bill, 2023 decriminalizes certain offenses under the Act by changing the nature of punishment from imposition of a fine to civil penalties. These offenses include failure to comply with orders of the CCI and directions of the Director General related to anti-competitive agreements and abuse of dominant position.
Acquisitions in the digital markets are valued based on data or certain business innovation of the company being acquired. The acquisition of such entities may not fall under the purview of traditional thresholds of assets or turnover to evaluate their impact on competition. The Bill proposes to evaluate such deals based on the value of transactions.
The Bill expands the powers of the Director General for investigating contraventions under the Act. This includes the power to seek information and documents from legal advisers also. This may be at variance with the provisions of lawyer-client confidentiality under section 126 of the Indian Evidence Act, 1872.
The Bill mandates depositing 25% of any amount levied by CCI prior to filing an appeal against a CCI order before the National Company Law Appellate Tribunal (NCLAT). The question is whether specifying a mandatory deposit in the law is appropriate.
The Act allows the use of intellectual property rights as a defense in cases of anti-competitive agreements. This defense is not available in cases involving abuse of dominant position. The Bill does not address this gap.
The Competition (Amendment) Bill, 2023 is significant in the Indian context as it aims to strengthen the regulatory framework for promoting competition and protecting consumers. The amendments proposed in the Bill take into account changes in the business environment, especially in the digital markets, which were not adequately covered by the current regulatory framework. The Bill seeks to ensure that the CCI is equipped with the necessary powers to investigate contraventions under the Act and impose appropriate penalties.
However, certain provisions of the Bill have raised concerns among legal experts and industry stakeholders. The expansion of the definition of anti-competitive agreements to include enterprises or persons who are not engaged in similar businesses has been criticized for its potential impact on the ease of doing business in India. The provision mandating the deposit of 25% of any amount levied by CCI before filing an appeal before the NCLAT has also been criticized for its potential impact on the ability of businesses to challenge CCI orders.
Overall, the Competition (Amendment) Bill, 2023 represents an important step towards ensuring a level playing field for businesses and protecting the interests of consumers in India. The government must carefully consider the concerns raised by various stakeholders and ensure that the final version of the Bill strikes the right balance between promoting competition and ensuring ease of doing business in India.
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