Print Friendly, PDF & Email

The Competition (Amendment) Bill, 2022

GS Paper 2 & 3

Syllabus: Parliament-Structure, functioning and conduct of business, Competition Commission of India etc


Directions: Competition bill, 2022, competition commission, gun-jumping etc

Source:The Hindu



  • 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.



  • The Competition Commission primarily pursues three issues of anti-competitive practices in the market:
    • Anti-competitive agreements
    • Abuse of dominance
    • Combinations


What is the major change in dealing with new-age market combinations?

  • ‘Deal value’ threshold: 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): This change will strengthen the Commission’s review mechanism, particularly in the digital and infrastructure space.
  • Information to commission: 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.
  • Increase in timeline: 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.
  • Anti-competitive agreements: 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.
  • Framework for settlements and commitments: For cases relating to vertical agreements and abuse of dominance.
    • In the case of vertical agreements and abuse of dominance, the parties may apply for a ‘commitment’ before the Director General (DG) submits the report.
    • Settlement’ will be considered after the report is submitted and before the Commission decides.
  • Leniency Plus: 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.
  • Appointment of the DG: To be appointed by the Commission rather than the Central government, giving the Commission greater control.
  • Penalties and penalty guidelines: For 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.
  • NCLT: 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.


Challenges combining parties face in open market purchases:

  • Gun jumping cases: There have been several gun-jumping cases owing to the combining parties’ inability to defer the consummation of open market purchases.
  • Unaffordable transaction: If parties wait for the Commission’s clearance, the transaction may become unaffordable.
  • Exempt open market purchases: The amendment proposes to exempt open market purchases and stock market transactions instead of notifying to the Commission in advance(Similar to the European Union merger regulations).
    • This is subject to the condition that the acquirer does not exercise voting or ownership rights until the transaction is approved and the same is notified to the Commission subsequently.



By implementing these amendments, the Commission should be better equipped to handle certain aspects of the new-age market and transform its functioning to be more robust.


Hub-and-Spoke arrangements:

  • A Hub-and-Spoke arrangement is a kind of cartelisation in which vertically related players act as a hub and place horizontal restrictions on suppliers or retailers (spokes).
  • Currently, the prohibition on anti-competitive agreements only covers entities with similar trades that engage in anti-competitive practices


What is 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.


Insta Links:

Competition Commission of India


Mains Links

Q. How would the recent phenomena of protectionism and currency manipulations in world trade affect macroeconomic stability of India?(UPSC 2018)


Prelims Links:

Competition commission of India

Gun jumping

Hub and spike arrangements


With reference to Competition commission of India, consider the following statements:

  1. It is a statutory body responsible for enforcing the Competition Act, 2002.
  2. It ensures freedom of trade in the market.
  3. It protects the interests of the consumers.

Which of the statements given above is/are correct?

a. 1 only

b. 2 and 3 only

c. 1 and 3 only

d. 1, 2 and 3

Ans: (d)


Refer to image above