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With the President of India Droupadi Murmu giving her assent to the Competition (Amendment) Bill 2023 on April 11, the Competition Commission of India (CCI) is girding itself up to roll out the first draft of the regulations for public consultations.
The first set of draft regulations are likely to be exposed for public comments in May, sources said. Indications are that the first set of draft regulations would cover the much talked about areas of deal value threshold; settlement and commitment and penalty guidelines, they added.
However, sources noted that the formal process for consultations will begin only after notification of the provisions of the Competition (Amendment) Act 2023 by the Ministry of Corporate Affairs (MCA).
The notification of various provisions by MCA is likely to take place in a staggered manner.
Settlement & Commitment - ‘Admission of Guilt’?
Industry is keenly awaiting the draft of regulations on the proposed settlement and commitment framework introduced by the Amendment Act. India Inc wants to get clarity on whether the regulator would insist on ‘admission of guilt’ by the applicants to get the benefits of the new dispensation as there is no clarity in the law on this aspect.
Going ‘Global’ - Global Turnover
The introduction of ‘gobal 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.
Competition law changes
The Competition (amendment) Bill 2022 is the most comprehensive amendment undertaken till date by the Government to the competition law.
It maybe recalled that Rajya Sabha had on April 3 passed the Competition (amendment) Bill through a voice vote. This Bill was passed by Lok Sabha on March 29 after Finance Minister Sitharaman moved as many as 13 official amendments in the lower house.
Among the salient features of this law include the introduction of benchmark of “global turnover” for levy of penalties arising from any abuse of dominant position by enterprises.
The other noteworthy features of this latest law include introduction of a Settlement & Commitment framework so as to ensure faster market correction; introduction of concept of Deal Value Threshold for notifying M&As so as to address killer acquisitions in digital market and introduction of “leniency plus’ regime.
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.
Also read: Computing penalty to serve as effective deterrent
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).
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