The Competition (Amendment) Act, 2023- A reflection of international India

On March 29, 2023, the Lok Sabha adopted the Competition (Amendment) Bill 2023, marking a significant advancement. The Bill was subsequently approved by the Rajya Sabha on April 3, 2023, and on April 11, 2023, it was promulgated and published in the Indian Gazette as The Competition (Amendment) Act, 2023 after getting the President’s signature.

Highlights

1. The Competition (Amendment) Act, 2023, amend the Competition Act, 2002, to add transaction value-based merger and acquisition regulations. Any deal worth more than Rs 2,000 crore must have CCI approval, and to reduce the CCI’s timeframe for doing so from 210 days to 150 days.
2. Furthermore, the scope of entities that can be considered a part of anti-competitive agreements is widened. While currently, only enterprises or persons engaged in similar businesses can be held liable, now includes those not involved in similar businesses as well.
3. To speed up the resolution of investigations into anti-competitive agreements and abuse of dominant position, the act now  introduces a framework for settlement and commitment.
4. Finally, certain offences under the Act are decriminalised, with a shift from imposing fines to civil penalties as a form of punishment. These offences include failing to comply with orders from the CCI or directions from the Director General concerning anti-competitive agreements and abuse of dominant position.
5. Digital market acquisitions are valued based on data or specific business innovations of the target company.  The acquisition of such firms might not be subject to the usual asset or turnover requirements for assessing their impact on competition.  According to the proposed legislation, the value of the transactions would be used to assess such arrangements.
6. The Director General’s authority to look into Act violations is increased.  This also includes the authority to ask legal counsel for information and paperwork.  This could be in conflict with section 126 of the Indian Evidence Act of 1872’s regulations about attorney-client confidentiality.
7. The Bill requires 25% of any sum imposed by CCI to be deposited before an appeal against a CCI ruling is brought before the NCLAT.  It is debatable whether a required deposit should be specified in the legislation.
8. New Section 6(4) of the Act introduces the “Green channel” or “deemed approval” for some kinds of combinations unlikely to obtain AAEC. Upon the recommendations of the Competition Law Review Committee (CLRC) Report, 2018, this was formally incorporated by CCI suo motu into the Combination Regulations, 2011 before the Competition (Amendment) Bill, 2020, and is now officially incorporated into the substantive law, the Act. Naturally, the Central government will now need to establish the standards for these “categories” of combinations through rules that have to be drafted in accordance with Section 63(i)(ac) of the Act.
9. Limitation on when information or a reference on any anti-competitive agreement or market behaviour of a dominating firm may be submitted to CCI – The Act now specifies a 3-year window in which anybody may file an information with CCI under Section 19(1) of the Act following the accrual of a cause of action. This aims to prevent the filing of vexatious or delayed cases before CCI. CCI may, however, excuse the delay in justified circumstances.