History 

• The Competition Act came into effect in 2002 replacing the Monopolies and Restrictive Trade Practices Act 1969. 
• The main objective of the 2002 Act was to regulate competition in India by putting in place a mechanism to tackle anti-competitive business practices.  
• The Act established the Competition Commission of India (CCI). The Commission was established to draft and enforce competition policy and regulate governments’ role in the markets in India. This is to ensure no person or enterprise can abuse their dominant position. Also, agreements and arrangements or combinations such as mergers / amalgamations should not have adverse effect on competition. 
• The Competition Act was amended twice – in 2007 & 2009. Thereafter the amendments in 2022 have been proposed.

Recent development

The Competition (Amendment) Bill 2022 was introduced in the Lok Sabha on 5th August 2022 to amend the Competition Act 2022. The Bill has been referred to the Parliamentary standing committee.

Highlights of the Competition (Amendment) Bill 2022:

Definitions 

1. ‘Control’ for the purpose of combinations / arrangements
   The Act defined ‘control’ as control over the affairs or management by one or more enterprises over another enterprise of group. The Bill proposes to amend the definition of ‘control’ to mean the ability to exercise material influence over the management, affairs or strategic commercial decisions.
2. ‘Relevant Product Market’
   The Act defines it as products and services which are considered as being substitutable by the consumer. The Bill proposes to widen the scope of this definition to include production or supply (of products and services) which is considered substitutable by the suppliers.

Combinations / Arrangements

1.   Based on transaction value
   The Bill proposes prohibition of any person or enterprise having cumulative assets of more than Rs. 1,000 Crore or cumulative turnover of more than Rs. 3,000 crore from entering into an arrangement or combination such as merger or amalgamation which have transaction value of Rs. 2,000 crores or more as it may cause an adverse effect on competition.
2. Time limit for approval of combinations
   Any combination shall come into effect only when the CCI has passed on order to that effect or a period of 150 days have passed from the day when an application for approval was filed, whichever is earlier. (The Act specified a period of 210 days which has been proposed / amended to 150 days)

Anti-competitive agreements / Proceedings:

1. Anti- competitive agreements are those agreements between parties or a group of entities which have the effect of restricting competition and or altogether removing competition from the market. The Competition Act 2002 does not recognize such agreements. The intention being, no entity/s can use their position of dominance to restrict or remove competition. Such agreements can include those relating to production, supply, storage or control of goods or services which cause an appreciable adverse effect of competition in India.
   Adverse effect criteria:
   The Bill states that any agreement between persons or enterprises engaged in identical or similar businesses will have adverse effect if they:
   1. directly or indirectly determine purchase or sales price
   2. control production or supply or markets or provision of services
   3. directly or indirectly lead to collusive bidding
      The Bill further clarifies that persons or enterprises not engaged in identical or similar businesses shall be presumed to be part of such agreements if they actively participate in furtherance of such agreements.
2. Under the Act the CCI had the power to initiate proceedings against enterprises on grounds of abuse of dominant position or entering into anti-competitive agreements. The Bill proposes powers to the CCI to close inquiry proceedings if the enterprise offers either a settlement (including payment) or commitment (to do or not do certain things). The manner and implementation of settlement and commitment may be specified by CCI through regulations.

Other proposed amendments  

1. The Act empowered the Central government to appoint a Director General to CCI. The Bill proposes to empower the CCI to appoint Director General with prior approval of the Central government.
2. The Bill lays down the qualifications and experience of Chairperson and members of the CCI.
3. The Bill decriminalises certain offences such as failure to comply with CCI order and abuse of dominant position under the Competition Act 2002 by moving it from imposition of fine to payment of penalty.

The Bill has proposed certain practical provisions to tighten the competition law regime and bring it inline with international best practices. The Competition Amendment Bill 2022 has been referred to the Parliamentary Standing Committee for review. Stakeholder interests will also be factored in before the Bill becomes an Act.

For full text of Bill:

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://prsindia.org/files/bills_acts/bills_parliament/2022/Competition%20(Amendment)%20Bill,%202022.pdf