The Ministry of Finance on 5th August 2022, introduced the Competition Amendment Bill in Lok Sabha. It seeks to amend the Competition Act, 2002. The Act establishes the Competition Commission of India (CCI) for regulating market competition.
Key features of the Bill include:
- The Bill modifies the definition of control as the ability to exercise material influence over the management, affairs, or strategic commercial decisions.
- 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.
- The Bill expands the definition of combinations to include transactions with a value above Rs 2,000 crore.
- 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.
- The Act empowers the central government to appoint a Director General to CCI. The Director General assists in conducting inquiries into contraventions of any provisions of the Act. The Bill amends this to empower the CCI to appoint the Director General, with prior approval of the government.
- 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. Any agreement between enterprises or persons, engaged in identical or similar businesses, will have such adverse effect on competition if it meets certain criteria. These include: (i) directly or indirectly determining purchase or sale prices, (ii) controlling production, supply, markets, or provision of services, or (iii) directly or indirectly leading to collusive bidding. The Bill adds that enterprises or persons not engaged in identical or similar businesses shall be presumed to be part of such agreements, if they actively participate in the furtherance of such agreements.
- The Act empowers the central government to appoint a Director General to CCI. The Director General assists in conducting inquiries into contraventions of any provisions of the Act. The Bill amends this to empower the CCI to appoint the Director General, with prior approval of the government.
- 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 with regard to anti-competitive agreements and abuse of dominant position.
