Recently, Lok Sabha has passed the Competition (Amendment) Bill, 2022, without a debate amidst opposition members' protests over the Adani issue.
Highlights of the Bill:
Reducing the timeline: The Bill seeks to amend the Competition Act, 2002, to regulate mergers and acquisitions based on the value of transactions. Deals with transaction value of more than 2, 000 crore will require CCI’s approval.
The Bill proposes to reduce the timeline for the CCI to pass an order on such transactions from 210 days to 150 days.
Expanding the scope of entities: The Bill expands the scope of entities that can be adjudged to be a part of anti-competitive agreements.
Currently, enterprises or persons engaged in similar businesses can be held to be a part of anti-competitive agreements. The Bill expands this to also include enterprises or persons who are not engaged in similar businesses.
Framework for settlement and commitment: The Bill provides a framework for settlement and commitment for faster resolution of investigations of anti-competitive agreements and abuse of dominant position.
Decriminalizing certain offences: 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 CCI and directions of the Director General related to anti-competitive agreements and abuse of dominant position.
Acquisition of entities in digital market may not fall under the purview of traditional thresholds of assets or turnover to evaluate their impact on competition.
The Bill proposes to evaluate such deals based on the value of transactions.
The Bill expands the powers of the Director General for investigating contraventions under the Act.
This may be at variance with the provisions of lawyer-client confidentiality under section 126 of the Indian Evidence Act, 1872.
The Bill mandates depositing 25% of any amount levied by CCI prior to filing an appeal against a CCI order before the NCLAT. The question is whether specifying a mandatory deposit in the law is appropriate.
The Act allows the use of intellectual property rights as a defence in cases of anti-competitive agreements. This defence is not available in cases involving abuse of dominant position.