News Highlight
The Competition (Amendment) Bill, 2022, was introduced in the Lok Sabha. It seeks to amend the Competition Act, 2002.
Key Takeaway
- The Act establishes the Competition Commission of India (CCI) for regulating market competition.
Key features of the bill:
- Regulation of combinations based on transaction value:
- The Act prohibits any person or enterprise from entering into a combination which may cause an appreciable adverse effect on competition. Â
- Combinations imply mergers, acquisitions, or amalgamations of enterprises.Â
- The prohibition applies to transactions where the parties involved have:
- Cumulative assets of more than Rs 1,000 crore or
- Cumulative turnover of more than Rs 3,000 crore.
- The Bill expands the definition of “combinations” to include transactions with a value above Rs 2,000 crore.
- The time limit for approval of combinations:Â
- The Act specifies that any combination shall not come into effect until the CCI has passed an order or 210 days have passed from the day when an application for approval was filed, whichever is earlier. Â
- The Bill reduces the time limit in the latter case to 150 days.
- Anti-competitive agreements:Â
- Under the Act, anti-competitive agreements include any agreement related to the production, supply, storage, or control of goods or services that can cause an appreciable adverse effect on competition in India.Â
- 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 furtherance.
- Appointment of a Director General:
- The Act empowers the central government to appoint a Director General for the CCI. The Director General assists in conducting inquiries into contraventions of any provisions of the Act. Â
- The Bill amends this to empower the CCI to appoint the Director General with prior approval of the government.
- Qualification of members of CCI:
- As per the Act, the chairperson and members of the CCI should have professional experience of at least 15 years in fields such as (i) economics, (ii) competition matters, (iii) law, (iv) management, or (v) business. Â
- The bill expands this to include experience in the field of technology.
Competition Commission of India (CCI)
- The Competition Commission of India (CCI) was established in March 2009 by the Government of India under the Competition Act, 2002, to administer, implement, and enforce the Act.
- The commission is a quasi-judicial body that gives opinions to statutory authorities and deals with other cases.
- Vision:
- To promote and sustain an enabling competition culture through engagement and enforcement that would inspire businesses to be fair, competitive, and innovative; enhance consumer welfare, and support economic growth.
- Objectives of CCI
- Eliminate practices that harm competition.
- Promote and sustain competition.
- Protect the interests of consumers.
- Ensure freedom of trade in the markets of India
- Establish a robust competitive environment through:
- Proactive engagement with all stakeholders, including consumers, industry, government and international jurisdictions
- Being a knowledge-intensive organisation with a high competence level.
- Professionalism, transparency, resolve and wisdom in enforcement.
- Composition:
- One chairperson and six members are appointed by the Central Government
- Eligibility:
- Person of ability, integrity and standing and who has been or is qualified to be a judge of a High Court, or has exceptional knowledge of and professional experience of not less than fifteen years in international trade, economics, business, commerce, law, finance, accountancy, management, industry, public affairs, In administration or in any other matter which, in the opinion of the Central Government, may be helpful to the Commission.
Competition Act 2002
- The Competition Act, 2002, was passed by Parliament in 2002.
- It was subsequently amended by the Competition (Amendment) Act, 2007.
- Following the provisions of the Amendment Act, the Competition Commission of India and the Competition Appellate Tribunal have been established.Â
- The Competition Commission of India is now fully functional, with a chairperson and six members.Â
- Provisions of the Act:
- The Act prohibits anti-competitive agreements, enterprise abuse of dominant position, and combinations (acquisition, acquiring control, and merger and amalgamation) that cause or are likely to cause a significant adverse effect on competition within India.
- The Competition Commission of India and the Competition Appellate Tribunal have been established following the provisions of the Amendment Act.
- In 2017, the government abolished the Competition Appellate Tribunal (COMPAT) and replaced it with the National Company Law Appellate Tribunal (NCLAT).
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Content Source: The Indian Express