Even as nearly a month has passed since President Droupadi Murmu assented to the Competition Amendment Bill 2023, the Centre is yet to notify any of the provisions of the amendment law.
The dithering by the Ministry of Corporate Affairs (MCA) in the notification of any of the provisions—especially the provision that would empower the CCI to go ahead to frame regulations for various critical new features like ‘global turnover’ —has now provided respite to Big Tech and Corporate India, sources said.
One month has gone by and MCA has not even notified the provision that enables CCI to frame regulation after public consultations, they said. Without this, CCI cannot move on to framing regulations, it is learnt. Some preparatory things have to be notified by MCA before CCI can go live with regulations.
“Nobody is saying MCA should notify the ‘global turnover’ provision today. At least notify the provision that would enable CCI frame regulations after public consultations and once the regulations are framed the ‘global turnover’ provision can then be notified and implemented from a date,” sources said, adding this is the sequence that has to be followed.
It may be recalled that Big Tech have been vehemently opposing the introduction of ‘Global Turnover’ provision, which post the enactment of the law linked the penalty for anti-trust violations to global turnover.
Presently, the Competition Commission of India (CCI) levies penalties on the relevant turnover basis which is national turnover derived from infringing products. The amendment, however, now mandates CCI to take global turnover of the enterprises from all goods and services as the basis for computing monetary penalties.
Recently, domestic startups have approached CCI against Big Tech companies, including Google alleging abuse of market power. However, with the delay in notifying the key proposal, CCI will be left with no option but to continue to levy penalties on the relevant turnover basis, rued a lawyer representing a startup before CCI.
The introduction of “global turnover” as a benchmark for the levy of penalties arising from any abuse of a dominant position by enterprises is one of the salient features of the amended law. The provision was inserted through the Competition (Amendment) Act without public consultations.
The Competition (amendment) Act 2023 is significant as it is the most comprehensive change undertaken since the enactment of the Competition law in 2002.
Nisha Kaur Uberoi, Partner& National Competition Head, Trilegal, said that the amendments to the Competition Act need to come into force in a phased manner as enabling regulations - be it commitment and settlements, deal value thresholds, penalty etc need to sync and work in tandem with the amendments.
It is far preferable that the regulations are put out for public consultation in line with international best practices rather than rushing the amendments, which could have unintended inequitable outcomes, she added.
Samir Gandhi, Co Founder, Axiom5 Legal Chambers said: “CCI is required to conduct public consultations on various regulations and guidelines that must be framed under the Competition (Amendment) Act, 2023.
Although the Competition Amendment Act has received presidential assent, these regulations and guidelines must be framed before its provisions can be notified and enforced, he said.
He said that framing meaningful regulations on these important subjects (deal value threshold, settlement and commitment and penalty guidelines) will require careful deliberation.
“I’m sure Indian industry will be particularly interested in the penalty guidelines, which will indicate how penalties will be calculated based on a company’s global turnover from the sale of all goods and services. This will be particularly important for multi-product Indian conglomerates with businesses in India and abroad”, Gandhi added.