Ministry of Corporate Affairs had constituted a Competition Law Review Committee (CLRC) under the Chairmanship of Secretary, Corporate Affairs in October, 2018 to review and recommend a robust Competition regime by taking the inputs of key stakeholders, and suggest changes in both the substantive and procedural aspects of law. Based on comprehensive review of all relevant issues, the Committee had submitted its report to the Government in July, 2019 and recommended certain amendments to the act and subordinate legislations.Accordingly, a Competition (Amendment) Bill, 2020 has been drafted for carrying out amendments in the Competition Act, 2002.

What is the current legislation?

• The Competition Commission of India (CCI) imposes penalties on companies on the basis of their turnover if they flout competition rules.
• When it comes to directors of companies or proprietorship firms, penalties are imposed on the basis of their income.
• However, the law does not have any provision to empower the CCI to impose penalties on the income of individuals.

What does the draft Bill say?
The draft Competition Bill, 2020 seeks to amend the Competition Act.

• If the changes proposed by the MCA to the Competition Act are enacted, buyers forming a cartel may be penalised.
• It has sought to give monetary and penal powers to the director general for investigation under the CCI.
• It also seek to empower the director general for investigation to send a person to prison for up to 6 months or impose a fine of Rs 1 crore if the latter refuses to produce any document the former has asked for.
• The Bill has a provision of income, on which penalty could be imposed under Section 27 of the Competition Act.
• It has the word ‘income’ included in the Act, which may provide a legal basis to the CCI to impose penalties on individuals.

With a view to update the Competition Act, 2002 and associated regulations, the Indian Government constituted the Competition Law Review Committee in October 2018. The Committee submitted its report to the Government on 14 August 2019. Based on the recommendations made in the Report, the MCA has introduced a draft Competition Bill, 2020 to overhaul the Act. The notification of the Government invites comments from the public on the Draft Bill until 6 March 2020. 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. On this edition of The Big Picture we analyse the Draft Competition (Amendment) Bill, 2020.