In a significant development, the Standing Committee on Finance (SCF) Chairman Jayant Sinha on Tuesday endorsed the recently circulated official amendment to the Competition (amendment) Bill 2022 whereby the government has proposed “global turnover” of the enterprises from ‘all the products and services’ as benchmark for levying penalties by the Competition Commission of India (CCI) for anti-trust violations.
“Government has lot more inputs than we do. That is the best thing about our legislative democratic process. The Global turnover idea (now being introduced by government) is a fantastic idea. That is a good suggestion the government has made. These kinds of processes results in better stronger and robust legislations”, Sinha said on the sidelines of a event organised by BRICS Competition Law and Policy Centre and CUTS in the capital.
He was responding to a BusinessLine query on how come the House Panel had not recommended the concept of “global turnover” as a benchmark for penalty levy in its report on the Competition (amendment) Bill 2022.
Sinha said there was a need to further strengthen the Indian competition law and the concept of “global turnover” benchmark for levy of penalty was “welcome amendment” that is now being proposed by the government.
“This will enable us to be more able to deal with anti competitive conduct and enforce better competitive conduct. If people are adhering to laws in one jurisdiction and not in ours, then we need to be able to enforce proper conduct in ours too”, he noted.
Strengthens CCI powers
The Centre’s proposal to introduce the concept of “global turnover” 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 House Panel Chief also said that he was quite hopeful the Competition (amendment) Bill 2022– introduced in Lok Sabha on August 5 and on which the SCF gave its report in December last year—would get passed in Parliament in the ongoing second leg of the budget session.
Private Member Bill
Sinha also said that the Private Member Bill that he is looking to introduce in Parliament is “completely modelled” on the Digital Competition Report, which is the report of the Standing Committee on Finance that dealt with the subject “Anti competitive practices by Big Tech Companies”.
“The purpose of my Private member Bill is to provide helpful input to the government on how such a Bill could be put together. We had done elaborate and thorough examination of Digital Competition Bills around the world and extensively studied the EU Digital markets Bill. We thought it would be useful to package all this together and put it as a private member bill so as to provide input to government’s deliberations.
The digital competition report took us a year to do. If you read the Digital Competition report, everything we said in that report is in the private member bill”, Sinha said. Indications are that this private member Bill will get introduced in Lok Sabha this Friday under the time allocated for that.