The Competition Amendment Bill 2022
Source : Economic Times
GS II : Governance
What is discussed under The Competition Amendment Bill 2022?
- Key Features of the Bill
- About Competition Commission of India
Why in News ?
Competition (Amendment) Bill, 2022 updates the existing framework for addressing anti-competitive agreements, abuse of dominance and mergers and amalgamations (M&A).
Key Features of the Bill
- It seeks to amend the Competition Act, 2002.
- The Act establishes the Competition Commission of India (CCI) for regulating market competition.
Image by Peggy und Marco Lachmann-Anke from Pixabay - Act prohibits any person or enterprise from entering into a combination which may cause an appreciable adverse effect on competition.
- Combinations imply mergers, acquisitions, or amalgamation of enterprises.
- Bill expands the definition of combinations to include transactions with a value above Rs 2,000 crore.
- The prohibition applies to transactions where parties involved have
- Cumulative assets of more than Rs 1,000 crore
- Cumulative turnover of more than Rs 3,000 crore, subject to certain other conditions.
- Bill modifies the definition of control as the ability to exercise material influence over the management, affairs, or strategic commercial decisions.
- The Act specifies that any combination shall not come into effect until the CCI has passed an order or 210 days have passed.
- Anti-competitive agreements include any agreement related to production, supply, storage, or control of goods or services, which can cause an appreciable adverse effect on competition in India.
- CCI may initiate proceedings against enterprises on grounds of
- Entering into anti-competitive agreements
- Abuse of dominant position
- Act defines relevant product market as products and services which are considered substitutable by the consumer.
- Chairperson and members of CCI should have professional experience of at least 15 years in fields such as economics, competition matters, law, management, or business.
- offences include failure to comply with orders of CCI and directions of Director General with regard to anti-competitive agreements and abuse of dominant position changes the nature of punishment.
About Competition Commission of India
- Competition Commission of India is a statutory body of the Government of India
- It is responsible for enforcing The Competition Act, 2002 to ensure fair advertisement there by promoting consumer interest.
- CCI aims to create and sustain fair competition in the economy to the producers and make the markets work for the welfare of the consumers.
- The Act prohibits anti competitive agreements, abuse of dominant position by enterprises and regulates combinations which causes or likely to cause an appreciable adverse effect on competition within India.
Members of the body
- CCI consists of a Chairperson and 6 Members appointed by the Central Government.
- Commission also undertake competition advocacy, create public awareness and impart training on competition issues.
Importance and regulations by CCI in India
- Competition Commission of India (CCI) has ordered penalties totalling about Rs 14,000 crore for unfair marketing tactics.
- A foreign company seeking entry into India through an acquisition or merger will have to abide by the country’s competition laws.
- Action against unfair activity :
- Rs. 10 million fine upon Google in 2014 for failure to comply with the directions given by the Director General seeking information and documents.
- Recently initiate a probe against e-commerce firms, including Amazon and Flipkart for giving deep discounts on online sales of smartphones and other gadgets.
CCI role in acquiring shares
- Section 2(a) of the Act specifically defines acquisition to mean directly or indirectly acquiring or agreeing to acquire
- Shares, voting rights or assets of any enterprises; or
- Control over management or control over assets of any enterprises.
- According to the Section 5 of the Act any acquisition of one or more enterprises by one or more persons, or merger or amalgamation of enterprises, shall be a ‘combination’ of such enterprises and person or enterprises if the threshold prescribed under the Section are met.
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