Competition Amendment Bill, 2023

In News

• Recently, Rajya Sabha passed the Competition Amendment Bill, 2023. 

About:

• The Competition (Amendment) Bill, 2023  seeks to amend the Competition Act, 2002 which regulates competition in the Indian market and prohibits anti-competitive practices such as cartels, mergers and acquisitions that may have an adverse effect on competition. 
• The Competition Commission of India (CCI) is responsible for implementing and enforcing the Act.

Amendments 

• Penalties : The Bill seeks to defines ‘turnover’ for the purpose of penalty as global turnover derived from all the products and services by a person or an enterprise
  • The idea is to levy a penalty as a percentage of global turnover of the offending company, moving away from the current practice of levying a part of the local or relevant market turnover as penalty.
• Decriminalisation : 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.
• Expands CCI’s Scope: The new provisions expand the scope of CCI’s merger regulation by bringing deals worth more than ?2,000 crore requiring regulator clearance.
• Settlement Mechanism:  The amendment introduces a scheme for commitment and settlement which is meant to reduce litigation by way of negotiated settlements.
  •  This scheme is available to cases of anti-competitive agreements and abuse of dominance, but not to cartels.
• Reducing US monetary Policy Influence: By reducing the use of the US dollar, countries can reduce the influence of US monetary policy on their own economies.

Significance :

• Promoting Ease of Doing Business: The amendments to the Competition Act aim to reduce regulatory hurdles and promote ease of doing business in India. The amendments are expected to provide greater clarity to businesses operating in India and reduce the compliance burden for companies.
• Enhancing Transparency: The inclusion of global turnover in the definition of “turnover” aims to enhance transparency and accountability in the Indian market. The amendment ensures that companies cannot escape penalties for competition law violations by shifting their revenue to other countries.

Source: LM