Introduction:

The Competition (Amendment) Bill, 2019 aims to bring about structural changes in the governing framework of the Competition Commission of India (CCI). It also proposes to structure and expand CCI’s activities by setting up regional offices across India. The Ministry of Corporate Affairs (MCA) has put the draft Competition (Amendment) Bill, 2020, in the public domain to seek feedback. The Draft Bill proposes certain significant amendments to the Act, including: imprisonment for non-compliance with directions of the Director General; commitment and settlement procedure in non-cartel cases; more expeditious combination review process; and constitution of a Governing Board for non-adjudicatory functions.

Body:

Major amendments in the competition bill 2019:

• Change in the regulatory structure of the CCI: the CCI has been wearing many hats since its inception. It had been vested with adjudicatory, advisory, investigative, quasi-legislative, and advocacy functions. Recognizing this, the CLRC recommended a change in the regulatory structure to make it more robust and effective to deal with the new age issues.
• The Bill provides for the constitution of a Governing Body. The Governing Body would comprise
  • the Chairperson of the CCI,
  • its six whole time members,
  • the Secretary of the Department of Economic Affairs,
  • Ministry of Finance or his nominee,
  • Secretary of the Ministry of Corporate Affairs and his nominee, and
  • four (4) other part-time members to be nominated by the Central Government.
• They will be Vested with the power to make regulations, take measures to promote awareness and create a National Competition Policy, the Governing Board will exercise general superintendence, direction and management of the affairs of the CCI.
• The CCI will now discharge only the adjudicatory functions.
• Statutory provision to invite public comments: In a very welcome move, the Bill creates an obligation on the Governing Board to seek public comments on all regulations.
• With a limited exception of urgency in public interests, and regulations pertaining to internal working of the CCI, this provision will bring elements transparency and democratic rule making to the system.
• Issuing the penalty guidance: The Bill requires the CCI to issue the much awaited penalty guidelines. The penalty guidance is expected to give recognition to the relevant turnover principles and lay down the manner of determination of the percentage of the penalty and application of aggravating and mitigating factors.
• Streamlining procedure for regulation of combinations: The Bill makes a large number of changes to regulation of combinations. Some of these, such as, reducing the time-limit for deemed approval from two hundred and ten days (210) days to one hundred and fifty days (150) days, make substantive changes.
• Amendments to streamline the procedure for inquiry into combinations: currently the sections in the Act leave a lot of glaring gaps in the inquiry procedure. Despite this, the CCI through regulations, notifications and practice has been conducting inquiries into combinations. The Bill seeks to fill some of these gaps, giving statutory sanctity to the practices followed by the CCI. This will also reduce the possibility of appeals against combination orders which have been in the past on account of insufficiency of the statutory provisions.
• New thresholds for merger control: The Bill empowers the CCI and Central Government to define new thresholds for merger notification by introducing a proviso to Section 5.
• Given the dynamic nature of the digital markets, application of this power requires exercise of caution. This may result in increasing compliance costs for businesses and impact the ease of doing business. It is necessary that the introduction of objective thresholds or criterion is preceded by a detailed economic and legal assessment of the necessity of such thresholds, the basis of the thresholds and the value of the thresholds.
• Expansion of definition of a cartel: The Bill expands the definition of a cartel to include a buyer’s cartel as well. This implies that even in cases of buyer’s cartel, the presumption of appreciable adverse effect on competition (AAEC) will apply to buyer’s cartel as well.
• Extending protection to holders of intellection property rights: In line with the recommendations of the CLRC, the Bill, seeks to widen protection offered to holders of IPR. The exemption for IPR holders is currently restricted to anti-competitive agreements. This brings the much-needed parity between the treatment of anti-competitive agreements and abuse of dominant position.
• The regime of settlements and commitments: In a very significant development, the Bill introduces a system for settlements and commitments permitting the CCI to close the investigation on basis of an application for settlement or commitment moved by the investigated party.

Benefits of amendments:

• It would benefit the public at large
• The new startups business would be benefitted a lot
• The digital economy

Conclusion:

The Bill is a positive step in the direction of an efficient CCI 2.0. While there are somethings which remain desired, one can hope that the consultation process leads to beneficial outcomes and most concerns raised by the stakeholders are appropriately addressed.