Lok Sabha passes Competition (Amendment) Bill 2022 – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/economy/lok-sabha-passes-competition-amendment-bill-2022/article66674656.ece

Bill provides for the concept of ‘deal value threshold’ as an additional criterion for notifying M&As; levy of anti-trust penalties on the ‘global turnover’ benchmark

Lok Sabha on Wednesday passed the Competition (Amendment) Bill 2022 after Finance Minister Nirmala Sitharaman moved as many as 13 official amendments to the Bill in the lower house.

The Bill was passed amidst ruckus and sloganeering by the opposition parties who stormed the well of Lok Sabha demanding a Joint Parliamentary Committee probe on the Adani-Hindenburg report.

It may be recalled that the Competition (Amendment) Bill 2022 was originally introduced in Lok Sabha on August 5 last year and subsequently referred to the Parliamentary Standing Committee on Finance headed by Jayant Sinha for examination and report.

Sinha headed Parliamentary Panel had made a slew of recommendations to the Bill including periodic revision of the basic deal value threshold of ₹2,000 crore and its indexation to inflation; retention of the existing overall time limit of 210 days for CCI to assess M&A deals; and the controversial one of requiring the CCI to establish ‘effects’ of anti-competitive conduct of dominant undertakings.

The House panel submitted its Report in December 2022, making many recommendations to revise the Bill. The Centre however rejected most of the recommendations. Official amendments were circulated by the government on February 7 this year.

Other details of the Bill

The Competition (Amendment) Bill 2022, among other things, also seeks to:

1. Broaden the scope of anti-competitive agreements.
2. Reduce the time limit for approval of mergers and acquisitions from the existing 210 days to 150 days.
3. Introduce deal value threshold as an additional criterion for notifying M&As to capture killer acquisitions in digital markets which were hitherto falling below the notification criteria due to asset and revenue-light business models of new age companies.
4. Provide a limitation period of three years for filing cases relating to anti-competitive agreements and abuse of dominant position.
5. Introduce settlement and commitment framework.
6. Deepen the scope of inter-regulatory consultations.
7. Incentivise parties in ongoing cartel investigations in terms of lesser penalty to disclose information regarding other cartels (leniency plus).

Global turnover

In one of the major official amendments, the Centre has introduced stiff penalties for competition law violation by providing that while calculating monetary penalties, the Competition Commission of India (CCI) will consider the ‘global turnover’ of the enterprises from ‘all the products and services’. The House Panel had not recommended the usage of ‘global turnover’.

The Centre’s proposal effectively seeks to nullify a Supreme Court ruling that restricted the powers of CCI in levying penalties by holding that turnover for calculating penalties can only be taken as relevant turnover i.e. revenues earned from infringing goods or services.

The proposal is likely to spell big trouble for multinational companies which operate in multiple jurisdictions globally. However, the same is also being seen by experts as strengthening the powers of CCI to deter potential violators of antitrust law.

The Union Cabinet had on January 24 approved the proposal mooted by the Ministry of Corporate Affairs (MCA) to move official amendments in light of certain recommendations made by the House Panel.

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