GS Paper 2/3
Syllabus: Statutory, Regulatory & Quasi-Judicial Bodies/ Effects of Liberalisation on the Economy
Source: LM
Context: The government is set to introduce the Competition (Amendment) Bill (2023 Bill) in Parliament.
Background:
- The Bill, which seeks to amend the Competition Act, 2002, was first introduced in Lok Sabha by the Finance Ministry in 2022 and referred to the Standing Committee, which submitted its report in December 2022.
- The 2002 Act seeks to promote and sustain competition in markets, protect the interest of consumers, and ensure freedom of trade for market participants.
- It established the Competition Commission of India (CCI) to eliminate practices having adverse effects on market competition.
| The Competition (Amendment) Bill, 2022 | 2023 Bill |
| Salient features:
● Expands the definition of combinations to include transactions with a value above Rs 2,000 crore. ● Earlier, it was mandatory for CCI to give approval of combinations within 210 days (now reduced to 150 days). ● Modifies the definition of control as the ability to exercise material influence over the management, affairs or strategic commercial decisions. ● Changes the nature of punishment for certain offences from imposition of fine to penalty. ○ This includes failure to comply with orders of CCI with regard to anti-competitive agreements, etc.
Concerns: Acquisitions in the digital markets are valued based on data or certain business innovation of the company being acquired. |
Probable changes:
● The CCI can now impose penalties up to 10% of the total global turnover of enterprises. ○ Currently, penalties are calculated as a percentage of only ‘relevant turnover’ in India. ● Expansion of the scope of liability of cartel facilitators. The amendments proposed to codify the liability of cartel facilitators which ‘actively participate’, surprisingly, the 2023 Bill has removed the word ‘active’.
Concerns: ● Deviation from committee’s recommendations. ● In 2017, the SC clarified that turnover for imposing penalty should mean ‘relevant turnover’. ● The change may have far-reaching consequences, especially for big-tech companies (like Amazon). ● Such a broad provision raises over-enforcement risks. |
Insta Links:
Parliamentary Panel on Competition Amendment bill 2022
Mains Links:
Examine the impact of liberalisation on companies owned by Indians. Are they competing with the MNCs satisfactorily? Discuss. (UPSC 2013)
