The Competition (Amendment) Bill, 2022 was passed by Lok Sabha with certain amendments.The Bill seeks to amend the Competition Act, 2002. The Act establishes the Competition Commission of India (CCI) for regulating market competition.
Key features of the Bill are:
▪ Regulation of combinations based on transaction value: The Act prohibits any person or enterprise from entering into a combination which may cause an appreciable adverse effect on competition. Combinations imply mergers, acquisitions, or amalgamation of enterprises. The prohibition applies to transactions where parties involved have: (i) cumulative assets of more than Rs 1,000 crore, or (ii) cumulative turnover of more than Rs 3,000 crore, subject to certain other conditions. The Bill expands the definition of combinations to include transactions with a value above Rs 2,000 crore. The Bill provided that the threshold would apply in cases where any enterprise, which is party to the transaction, has substantial business operations in India. The amendments provide that the threshold would apply only when the enterprise being acquired has substantial business operations in India.
▪ Time limit for approval of combinations: The Act specifies that any combination shall not come into effect until the CCI has passed an order or 210 days have passed from the day of when an application for approval was filed, whichever is earlier. The Bill reduces the time limit in the latter case to 150 days.
Anti-competitive agreements: Under the Act, anti-competitive agreements include any agreement related to production, supply, storage, or control of goods or services, which can cause an appreciable adverse effect on competition in India. Any agreement between enterprises or persons, engaged in identical or similar businesses, will have such adverse effect on competition if it meets a certain criterion.
These include:
(i) directly or indirectly determining purchase or sale prices,
(ii) controlling production, supply, markets, or provision of services, or
(iii) directly or indirectly leading to collusive bidding.
The Bill provides that enterprises or persons not engaged in identical or similar businesses shall be presumed to be part of anti-competitive agreements, if they actively participate in the furtherance of such agreements. The amendments modify this to refer to enterprises that participate or intend to participate in such agreements.
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(With input from news agency language)
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