The Competition (Amendment) Bill, 2022

Recently, the Standing Committee on Finance has summoned top executives of Amazon, Twitter, Netflix, Google, Apple and Microsoft on the subject of ‘anti-competitive practices’ in the digital market. The panel summoned these firms in connection with the Competition (Amendment) Bill, 2022, which was previously referred to it.

Details –

• The Competition (Amendment) Bill, 2022, was tabled in Lok Sabha and afterwards referred to the Standing Committee on Finance, which has three months to present its report.
  • The Bill borrows from the best global practices like —
    • Settlement and commitment.
    • Enhanced leniency provisions.
    • Cutting short the maximum time that can be taken for clearing mergers and acquisitions.
• The new Bill introduces “deal value thresholds” which will require the firms to seek approval of the CCI in case of large value transactions.

Background –

• Recently, the Competition (Amendment) Bill, 2022 was introduced in the Indian Parliament by the Ministry of Finance.
• The Bill seeks to amend the Competition Act, 2002, and to bring the Act in line with modern conditions, including the development of new technology.
  • • The 2002 Act establishes the Competition Commission of India (CCI) for regulating market competition.
    • The existing act, framed in 2002, has no provisions to tackle the huge changes brought about in the digital market.
• Later, the Bill was referred to the Standing Committee on Finance for further scrutiny.

Key amendments proposed –

• Expansion of scope of the combinations to include transactions with a value above Rs. 2000 crores. Combinations imply mergers, acquisitions, or amalgamation of enterprises.
• Reduction in the time period for approval of combinations from 210 days to 150 days.
• Modification in the definition of control for the purpose of classification of combinations —
  • The Act defines control as control over the affairs or management by one or more enterprises over another enterprise or group.
  • The Bill modifies the definition of control as the ability to exercise material influence over the management, affairs or strategic commercial decisions.
• Expansion of the scope of Anti-competitive agreements —
  • Under the Act, anti-competitive agreements include any agreement related to production, supply, storage or control of goods/services, which can cause an appreciable adverse effect on competition in India.
  • The Bill adds that enterprises or persons not engaged in identical or similar businesses shall be presumed to be part of such agreements, if they actively participate in the furtherance of such agreements.
• Provision with respect to Settlement and Commitment in anti-competitive proceedings —
  • The Bill permits CCI to close inquiry proceedings if the enterprise offers – settlement (may involve payment), commitments (may be structural or behavioural in nature).
  • The manner and implementation of settlement and commitment may be specified by CCI through regulations.
• More scrutiny on Big Tech giants —
  • The Bill also seeks to introduce knowledge and experience in the field of technology as additional criteria for the members of the selection committee.
  • This is a clear indication that the government is looking to add investigative strength and professional knowledge to the regulator’s expanding monitoring of big tech companies.

About ‘Competition Commission of India’ –

• The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, follows the philosophy of modern competition laws. The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.
• The objectives of the Act are sought to be achieved through the Competition Commission of India, which has been established by the Central Government with effect from 14th October 2003.
• CCI consists of a Chairperson and 6 Members appointed by the Central Government (not less than 2 members). It is the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.
• The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.