Central Govt notifies Competition Act (Amendment), 2023

Central Govt – Competition Act – taxscan
Central Govt – Competition Act – taxscan
On February 08, 2023, the Central Government introduced the Competition (Amendment) Bill, 2023 in the Lok Sabha and proposed additional amendments to the Competition (Amendment) Bill, 2022 which was introduced earlier in the Lok Sabha on August 05, 2022. The key additional amendments proposed by the 2023 Bill, which may have far-reaching consequences, are set out below:
Amendments
- Penalties: The Bill defines ‘turnover’ for the purpose of penalty as global turnover derived from all the products and services by a person or an enterprise.
- Decriminalisation: The Bill decriminalises certain offences under the Act by changing the nature of punishment from imposition of fine to civil penalties.These offences include failure to comply with orders of the Competition Commission of India (CCI) and directions of the Director General related to anti-competitive agreements and abuse of dominant position.
- Expands CCI’s Scope: The amendment expands the scope of CCI’s merger regulation by bringing deals worth more than Rupees 2,000 crore requiring regulatory clearance.The Bill reduces the overall time CCI has to approve merger and acquisition requests.CCI is now required to have members from the field of technology. Those on the selection committee must also have knowledge of and experience in the field.
The Bill broadens the grounds on which the statutory authorities may suo motu make a reference to the Commission “on any issue that involves any provision of this Act or is related to promoting the objectives of this Act.”The Bill provides CCI certain additional powers to frame regulations.
- Settlement Mechanism: The amendment introduces a scheme for commitment and settlement which is meant to reduce litigation by way of negotiated settlements.This scheme is available to cases of anti-competitive agreements and abuse of dominance, but not to cartels.
- Covering supply-side substitutability: The Bill modifies the “relevant product market” definition to look at substitutability on the supply side as well. The earlier definition only considered two products or services to be part of the same relevant market if it is regarded as interchangeable or substitutable by the consumer.
- Reducing US monetary Policy Influence: By reducing the use of the US dollar, countries can reduce the influence of US monetary policy on their own economies.
- Covering hub-and-spoke cartels: Entities who are not engaged in identical or similar trade, shall also be presumed to be part of an anti-competitive agreement under Section 3(3) if they participate or intend to participate in the furtherance of such agreement.
- Covering sellers: The phrase “exclusive supply agreement” has been replaced with “exclusive dealing agreement” to cover the selling side.
- Settlements and Commitments Framework: If entities are found to engage in anticompetitive agreements or abuse of dominance, they can propose a settlement for the alleged contraventions at any time after the Director General presents their report and before the CCI passes an antitrust order.
- Government’s rule-making powers: The Bill provides certain additional rule-making powers to the central government
To Read the full text of the Order CLICK HERE
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