Lok Sabha approves amendments to competition law
The bill provides for the Competition Commission of India to impose penalties on entities based on their global turnover instead of the current practice of considering only relevant market turnover.
Wednesday March 29, 2023,
2 min Read
The Lok Sabha on Wednesday passed the Competition Amendment Bill, 2022, more than seven months after it was introduced in the Lower House in August last year.
The bill provides for the Competition Commission of India (CCI) to impose penalties on entities based on global turnover instead of the current practice of considering only relevant market turnover.
In the Lower House, Corporate Affairs and Finance Minister Nirmala Sitharaman moved the bill for consideration and passage. The bill was passed without a debate. The corporate affairs ministry has made certain amendments to the original bill.
One of the proposed changes is with respect to the turnover that will be considered for the imposition of penalty in case of competition law violations.
"... turnover means global turnover derived from all products and services by a person or an enterprise," as per the amendments that were approved by the Lok Sabha.
Another amendment is that the CCI has to form a prima-facie opinion about a filing related to a combination within 30 days of receiving the filing.
Currently, the regulator can form a prima-facie opinion within 30 days working days of receiving a combination filing.
In competition law parlance, combinations refer to mergers and acquisitions, and deals beyond a certain threshold require the approval of CCI.
The Competition (Amendment) Bill, 2022, was introduced in Parliament on August 5 last year. Then, it was referred to the Parliamentary Standing Committee on Finance chaired by BJP member Jayant Sinha.
The panel tabled its report in Parliament on December 13. It will be the first time since the enforcement of the Competition Act in 2009 that amendments will be made to the Act.
The Act was brought in 2002 and subsequently, it underwent amendments in 2007 and 2009. In May 2009, the anti-trust provisions of the law came into force and two years later in May 2011, CCI began screening mergers and acquisitions.