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Polity & Governance
Mahesh

25/08/22 10:30 AM IST

Competition Amendment Bill 2022

In News 
  • The changing market dynamics due to technological advancements, artificial intelligence, factors other than price, amendments became necessary to sustain and promote market competition. A review committee was established in 2019 which proposed several major amendments.
Major amendments 
  • Amendment makes it mandatory to notify the Commission of any transaction with a deal value in excess of ₹2,000 crore and if either of the parties has ‘substantial business operations in India’.
  • Under Section 5 currently parties indulging in merger, acquisition, or amalgamation need to notify the Commission of the combination only on the basis of ‘asset’ or ‘turnover’.
  • Frame regulations to prescribe the requirements for assessing(an enterprise having ‘substantial business operations in India).
  • When business entities are willing to execute a combination, they must inform the Commission.
  • The Commission may approve or disapprove the combination, with a check on adverse effect on competition.
  • The new Bill seeks to accelerate the timeline from 210 working days to only 150 working days with a conservatory period of 30 days for extensions to approve the combination.
  • The amendment broadens the scope of ‘anti-competitive agreements’ to catch entities that facilitate cartelisation even if they are not engaged in identical trade practices.
  • It allows the commission to give an additional waiver of penalties to an applicant who discloses the existence of another cartel in an unrelated market.
  • or any false information filed, a penalty of five crore will be imposed, and for failure to comply with the Commission directions, a penalty of ₹10 crore will be imposed.
  • For an appeal to be heard by the National Company Law Tribunal (NCLT) against the Commission’s order, the party will have to deposit 25% of the penalty amount.
Gun Jumping 
  • If the combining parties close a notified transaction before the approval, or have consummated a reportable transaction without bringing it to the Commission’s knowledge, it is seen as gun-jumping.
  • The penalty for gun-jumping was a total of 1% of the asset or turnover. This is now proposed to be 1% of the deal value
Competition Commission of India
  • It is a statutory body of the Government of India, responsible for enforcing the Competition Act, 2002 throughout India
  • It prevents activities that have an adverse effect on competition.
Source- Indian Express 

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