The importance of competition law cannot be understated. Without the regulations flowing from such a law, businesses would be free to engage in anti-competitive practices that would harm consumers and stifle innovation.
By promoting fair competition, competition laws help to ensure that consumers have access to a variety of high-quality products and services at reasonable prices.
It is in this context that competition laws need frequent refresh to keep them in tune with the times.
India’s competition law framework recently got an overhaul with the enactment of Competition (amendment) Act 2023.
Presidential assent for this law came on April 11 and the Centre is now looking to implement this law in a staggered manner.
The latest amendment law has sought to introduce several new features in tune with requirements of modern market oriented economy including the concept of deal value threshold; settlement and commitment provisions; levy of penalty on “global turnover” basis and introduction of leniency plus regime for cartels.
In Indian competition law, the “deal value threshold” refers to a monetary threshold that determines whether a merger or acquisition must be notified to the competition authorities for review and approval before it can be completed. The law has now pegged this threshold at ₹ 2,000 crore. This threshold will also be indexed to inflation.
The introduction of ‘global turnover’ as the criteria to levy penalties for violation of competition law is another provision that has riled the stakeholders. The provision was inserted through the Competition (Amendment) Act without public consultations.
Leniency plus regime is basically a new cartel detecting tool that would encourage companies already under investigation for one cartel to report other cartels unknown to the competition regulator.
Besides reducing the timelines for M&A clearances (from 210 days to 150 days), the Competition (Amendment) Law has also provided for appointment of Director General (Investigation) by the CCI.
Hitherto, the DG (Investigation) was directly appointed by the Central Government.
Another significant change relates to a 25 per cent deposit for a penalty for appeals. Also, the new law provided for inclusion of facilitators of certain anti-competitive agreements within the framework of law (hub—and—spoke).
BusinessLine spoke to Samir Gandhi, Co founder, Axiom5 Law Chambers in our BL State of the economy Podcast to get a good handle on the recent overhaul of Indian competition law.
(Host: KR Srivats, Producer: Nabodita Ganguly)
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