Budget Session. Parliament approves Competition (Amendment) Bill 2022

Parliament passed the much-awaited Competition (Amendment) Bill 2022 with the Rajya Sabha on Monday giving its nod to the Bill, which is the most comprehensive amendment undertaken to date by the government to the competition law since its enactment in 2002.

Rajya Sabha on Monday passed the Competition (Amendment) Bill 2022 through a voice vote after Finance Minister Nirmala Sitharaman moved the Bill for consideration and passage in the Upper House.

This Bill, which was passed by Lok Sabha last Wednesday, was passed by Rajya Sabha too without any discussion. It may be recalled that Sitharaman had in Lok Sabha last week moved as many as 13 official amendments.

Some of the new features of the Bill — which will now be sent to President Droupadi Murmu for her assent — include the indexation of penalties to ‘global turnover’ and also the introduction of the concept of ‘deal value threshold’.

The Competition Commission of India (CCI) is now expected to frame regulations for the implementation of new features such as deal value threshold and settlement and commitment mechanism.

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After LS nod, Rajya Sabha to take up Competition (Amendment) Bill 2022 for passage on Monday

Competition (Amendment) Bill 2022 was originally introduced in Lok Sabha on August 5 last year and subsequently referred to the Parliamentary Standing Committee on Finance headed by Jayant Sinha for examination and report.

The House panel submitted its Report in December 2022, making several recommendations to revise the Bill. The Centre however rejected most of the recommendations.

The Competition (Amendment) Bill 2022 seeks to, among other things, broaden the scope of anti-competitive agreements; reduce the time limit for approval of mergers and acquisitions from the existing 210 days to 150 days; introduce deal value threshold as an additional criterion 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;

Global turnover

A significant amendment that has raised a lot of chatter among the legal fraternity, Corporate circles is the move to index the penalties for competition law violations to consider the ‘global turnover’ of the enterprises from ‘all the products and services’. The House Panel had not recommended the usage of ‘global turnover’.

• Also read: Competition Bill: Centre’s sudden tweak in indexing penalties to ‘global turnover’ likely to hit Apple

The Centre’s move 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 amendment 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. 

Jayant Sinha headed Parliamentary Panel 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. 

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