Competition (Amendment) Bill, 2022 passed in Lok Sabha

The Lok Sabha on Wednesday passed The Competition (Amendment) Bill, 2022 to amend The Competition Act of 2002..The Bill was introduced in the Lok Sabha on August 5 last year, during the Monsoon Session of the Parliament. It was referred to the Parliamentary Standing Committee on Finance headed by Jayant Sinha for examination..The Bill seeks to amend the Competition Act to regulate mergers and acquisitions based on the value of transactions. Deals with transaction value of more than ₹2,000 crore will require the approval of the Competition Commission of India (CCI). It also proposes to reduce the timeline for the CCI to pass an order on such transactions from 210 days to 150 days..Further, the Bill aims to widen the scope of entities that can be considered as being involved in anti-competitive agreements. Presently, only enterprises or persons in similar fields can be held accountable for such agreements. However, the Bill aims to extend this to include businesses or individuals who do not operate in similar fields..Another proposed introduction is a framework for faster resolution of investigations through settlement and commitment. The Bill also decriminalizes certain offences under the Act by replacing fines with civil penalties. These offences include failure to comply with orders of the CCI and directions of the Director General (DG) related to anti-competitive agreements and abuse of dominant position..According to Unnati Agrawal of IndusLaw, "The Bill is a laudatory development as it will overhaul the Competition Act, 2002 by bringing it in line with the changing economic and business reality in India and providing the CCI with more teeth and flexibility to address competition law concerns in a timely manner.Introduction of major amendments, such as, deal value thresholds will bring transactions involving ‘asset lite’ and ‘low revenue’ companies (which were previously not notifiable), under the CCI’s scrutiny. Further, introduction of settlements and commitments mechanism will (i) ensure swift correction of anti-competitive behaviour and practices in the market; (ii) spare willing and legally compliant companies to face the rigours of an extensive CCI investigation; and (iii) ease the pressure on the CCI’s resources.However, given that the exact mechanism for the implementation of these amendments (such as, methodology for computation of ‘deal value’ and the test to determine ’substantial business operations in India’ as well as the procedural details in relation to conducting the commitments or settlements) is dependent on the regulations to be issued by the CCI, it is paramount that such regulations are issued without any undue delay to ensure regulatory certainty as well as successful and smooth transition to the new framework.Further, it will be interesting to see if the Rajya Sabha (upper house) is also inclined to endorse the introduction of the highly contentious provisions, such as, computation of penalty based on global turnover (which will result in higher penalties for global multi-product companies), which was added last minute to the 2022 Bill.”