Centre suggests changes to competition law; proposes settlement framework

Introducing the Competition (Amendment) Bill, 2022 in Lok Sabha, the Centre also proposed several provisions for having ‘value of transaction’ as a criteria to notify combinations to the Competition Commission of India (CCI).

Centre suggests changes to competition law; proposes settlement framework
The Competition Act was enacted in 2002.

The Centre has suggested a number of amendments to the competition law during the Parliament session on Friday. These include introduction of a settlement framework, reducing time limit for combination approvals, incentives for disclose information in cartel investigation.

Introducing the Competition (Amendment) Bill, 2022 in Lok Sabha, the Centre also proposed several provisions for having ‘value of transaction’ as a criteria to notify combinations to the Competition Commission of India (CCI).

Among other amendments that were suggested include abuse of dominant position before the CCI, change in some definations like ‘enterprise’, ‘relevant product market’, among others in order to provide clarity.

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The government is also looking 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 pertaining to 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 would be replaced with the provision for contempt, as per the bill.

Another change proposed is reducing the time limit for approval of combinations to 150 days from the current 210 days and also requiring 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 incentivise parties in an ongoing cartel investigation in terms of lesser penalty to disclose information regarding other cartels.

Among other amendments, the government has proposed the appointment of the Director General by the CCI with the prior approval of the central government and issuance of guidelines, including penalties to be imposed by the CCI.

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The Competition Act was enacted in 2002.

In the Statement of Objects and Reasons for the bill, the government said there has been a significant growth of Indian markets and a paradigm shift in the way businesses operate in the last decade.

The Competition Law Review Committee, set up by the corporate affairs ministry which is implementing the Act, had suggested various changes to the law.

“After review of the recommendations proposed by the committee, public consultations and with a view to provide regulatory certainty and trust-based business environment, it is considered imperative to amend the said Act,” it said.

The bill was introduced by Minister of State for Corporate Affairs Rao Inderjit Singh.

(With PTI inputs)

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