Government proposes a slew of amendments to competition law
The government proposed a slew of amendments to the competition law on Friday, including the introduction of a settlement framework, a reduction in the time limit for combination approvals and provision for incentives for parties to disclose information in cartel probes.
The Competition (Amendment) Bill, 2022, introduced in the Lok Sabha, also proposed provisions for having “value of transaction” as a criterion for notifying combinations to the Competition Commission of India (CCI). These amendments are aimed at catching up with the business models of the new age companies along with broadening the scope of anti-competitive agreements and providing time-bound approvals for combinations.
These changes are based on recommendations given by the Competition Law Review Committee that was set up by the government to examine the changes that need to be made to the law.
“There has been a significant growth of Indian markets and a paradigm shift in the way businesses operate in the last decade,” Union minister for finance and corporate affairs Nirmala Sitharaman said in the statement of purpose of the bill. “After review of the recommendations proposed by the committee, public consultations and with a view to provide regulatory certainty and trust-based business environment, it is considered imperative to amend the said Act.”
Until now, corporate deals such as mergers and acquisitions needed to notify the CCI only if the parties involved in the deal had assets or turnover more than a certain threshold. More specifically, if the asset size of the company was more than Rs 2,000 crore or if the turnover of the company was more than Rs 6,000 crore, the approval of the CCI was required.
The government has now introduced an additional criterion – deal value. If the total worth of the deal is more than Rs 2,000 crore, it will need to be notified to the anti-trust regulator. This change is aimed at bringing the e-commerce and startup combination under the ambit of the rules. Until now, such deals were not required to be notified since the companies in the sectors typically are asset-light, falling short of the minimum threshold prescribed.
“This change is ostensibly being introduced to address certain types of transactions such as those in digital markets, that may not require notification under the existing jurisdictional threshold,” said Vaibhav Chouske, partner, JSA Associates. “These transactions currently escape scrutiny since the CCI has no residuary jurisdiction to assess non-notifiable transactions even if their potential competitive harm is evident.”
Other amendments include a limitation period of three years for filing information on anti-competitive agreements and abuse of dominant position before the CCI, changes in definitions of certain terms such as ‘enterprise’, ‘relevant product market’, ‘group’ and ‘control’ to provide clarity.
The government also plans to introduce a “settlement and commitment framework to reduce litigations” and incentivise parties in an ongoing cartel investigation in terms of lesser penalty to disclose information regarding other cartels.
“The introduction of settlement rules will allow the CCI to effectively address competition cases in a time-bound and effective manner without getting involved in a protracted litigation,” said Samir Gandhi, head of competition law practice, AZB Partners. “However, cartel cases are excluded from the purview of settlement since they have significant adverse impact on the competition market.”
Currently, if the CCI opens an investigation, it is followed by an order from the commission.
Among other amendments, the government has proposed the appointment of the director general by the CCI with the prior approval of the central government and issuance of guidelines, including penalties to be imposed by the commission.
The bill also proposed to reduce the time frame for approval of combinations by the CCI to 150 days from 210 days at present. Further, the CCI will be required to form a prima facie opinion on the deal within 20 days for expeditious approvals. A provision for settlement of cases under the Competition Act has also been proposed.
The government has also brought in stricter penalty provisions by increasing the penalty to Rs 3 crore along with three years of imprisonment or both, if any of the parties contravene with the orders passed by the National Company Law Tribunal. The tribunal currently hears appeals in the competition matters.

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