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The much-anticipated Competition (Amendment) Bill 2022 will be taken up for passage on Tuesday. The Bill has been included under the Revised List of Business of the Lok Sabha for Tuesday, sources said.
The Centre is already geared up to move several amendments to the Bill that was originally introduced on August 5 last year.
It maybe recalled that the Centre has rejected most of the recommendation made by the House Panel and had circulated official amendments on February 7, which now form part of the already introduced Bill.
The Parliamentary Standing Committee on Finance had in December last year submitted the report on the Competition (Amendment) Bill 2022.
‘Global turnover’
In one of the major official amendments, the Centre has proposed stiff penalties for competition law violation by providing that while calculating monetary penalties, the Competition Commission of India (CCI) will consider ‘global turnover’ of the enterprises from ‘all the products and services’.
The proposal effectively seeks to nullify a Supreme Court ruling which restricted powers of CCI in levying penalties by holding that turnover for calculating penalties can only be taken as relevant turnover i.e. revenues earned from infringing goods or services.
The proposal is likely to spell big trouble for multinational companies which operate in multiple jurisdictions globally. However, the same is also being seen by experts as strengthening the powers of CCI to deter potential violators of antitrust law.
The Union Cabinet had on January 24 approved the proposal mooted by Ministry of Corporate Affairs (MCA) to move official amendments in light of certain recommendations made by the House Panel.
As per sources privy to developments, the government has rejected the proposal of the Panel to incorporate ‘effects’ based approach in the Competition Act for examining the cases of abuse of dominance.
Presently, the law does not require competition watchdog to establish ‘actual effects’ of the anti-competitive conduct of dominant undertakings. Introduction of effects based doctrine was a key demand of big tech industry and the representatives of the sector deposed before the Parliamentary panel seeking its incorporation into the law.
Comprehensive changes
The Competition (amendment) Bill 2022 — which proposes many substantive, procedural and institutional changes — is the first time the government is going in for comprehensive changes to the Competition law since its coming into force in 2009.
The Competition (amendment) Bill 2022 seeks to, among other things, broaden the scope of anti-competitive agreements; reduce time limit for approval of mergers & acquisitions from the existing 210 days to 150 days; introduce deal value threshold as an additional criteria for notifying M&As to capture killer acquisitions in digital markets which were hitherto falling below the notification criteria due to asset and revenue light business models of new age companies; provide limitation period of three years for filing cases relating to anti-competitive agreements and abuse of dominant position; introduce settlement & commitment framework; deepen scope of inter-regulatory consultations; incentivize parties in an ongoing cartel investigations in terms of lesser penalty to disclose information regarding other cartels (leniency plus).
The Parliamentary Panel headed by Jayant Sinha had made a slew of recommendations to the Bill including periodic revision of basic deal value threshold of ₹2,000 crore and its indexation to inflation; retention of existing overall time limit of 210 days for CCI to assess M&A deals; and the controversial one of requiring the CCI to establish ‘effects’ of anti-competitive conduct of dominant undertakings.
Statement of objects and reasons for amendment in the original bill says it is being done with a view to provide regulatory certainty and trust-based business environment. Initial provisions included changes in certain definitions like “enterprise”, “relevant product market”, “Group”, “Control”, etc., to provide clarity in various provisions.
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