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The Competition (Amendment) Act, 2023: Steps towards a more
competitive Indian economy.
I. Introduction The Competition (Amendment) Act, 2023 is an important piece of legislation that aims to reform and strengthen competition law in India. Competition laws are important because they help ensure fair and competitive markets. A fair and competitive market benefits consumers by lowering prices, increasing innovation, and providing more choice. Competition law also helps businesses by creating a level playing field and encouraging efficiency and innovation. The CCI is the competition enforcement authority. The Competition Act, 2002 came into effect to promote competition in India. But the law is more than two decades old and needs to be updated to reflect changes in the economy and the challenges posed by new technologies. We will study the amendments introduced in the Competition Act, 2002. II. Introduced changes to the existing law.
1. Reducing the timeframe for approving transactions from 210 days to 150 days. Existing provisions As per Section 6(2A) of the Competition Act, 2002, no merger shall be effective until 210 days have elapsed from the date of notification of the merger to the Competition Commission of India (CCI) or Commission has passed an order, whichever is earlier. Proposed changes The proposed Competition (Amendment) Bill, 2023 seeks to amend Section 6(2A) of the Competition Act to reduce the period for approval of a merger from 210 days to 150 days the date of the notice of merger to approve the merger or to issue an order.
Impacts The proposed changes are expected to significantly reduce waiting times for approval of transactions. This will speed up the approval of combinations of products, creating a fair and transparent competition process.
2. Deal Price Limits; Transaction value above Rs 2,000 crore will require CCI approval. Existing provisions Section 5 of the Competition Act 2002 deals with merger rules. The proposed Amendment Act, 2023 seeks to amend Section 5 of the Act by inserting a new section extending the CCI’s regulatory authority in respect of mergers. Proposed changes The amended section states that any transaction involving the acquisition, merger or consolidation of the control, shares, voting rights or assets of a company exceeding Rs. 2, crores will require CCI approval. Further, this provision applies only if the acquiring, divesting, merging or consolidating entity has substantial operations in India, as defined by the law. Impact The proposed amendments could have significant implications for large mergers and acquisitions in India. By requiring CCI approval for projects above Rs 2,000 crore sanctioned, the amendment sought to ensure that such projects do not give rise to anti- competitive practices and promote fair competition in the market. 3. The definition of ‘relevant product market’ has increased the scope. Existing provisions According to Section 2(t) of the Competition Act, 2002, "relevant product market" means that which includes all those goods or services to which the consumer is involved, by the nature, price and preference of the goods or services for the purpose of use.
relevant persons are covered under the Act. Thus, the Commission can take appropriate action against anti-competitive practices, thus promoting fair competition in the market.
5. You must deposit 25% of the amount charged by CCI before filing an appeal with the Appellate Tribunal. Existing provisions Section 53B of the Competition Act provides a right of appeal to the Appellate Tribunal by the Central Government or State Government, Local Government, or Administration aggrieved by a decision or order of the Commission (CCI). As per Section 53B (2) of the Act, any appeal must be filed within 60 days from the date of receipt of a copy of the direction or decision of the Commission. The appeal must be formal and accompanied by the amount sought. Proposed changes The Competition Act proposes to amend Section 53B (2) of the Act by adding a new provision mandating a deposit of 25% of the fees charged by the CCI before appealing against the order of the CCI. The provision states that the appeal of a person who is required to pay any amount pursuant to an order of the Commission shall not be entertained by the Appellant Tribunal unless the appellant has paid that amount of which 25% has been deposited as per new amendment. Impact The proposed amendments are expected to discourage frivolous litigation and could change the way litigants appeal and have a significant impact on competition law on the effectiveness of the news in India. 6. Presumption to be part of anti-competitive agreements in some cases Existing provisions Section 3 of the Competition Act, 2002 provides for the prohibition of certain anti- competitive agreements.
Anti-competitive agreements under the Act include any agreement relating to the manufacture, supply, storage, or maintenance of goods or services, which may have a manifest adverse effect on competition in India. Any agreement between companies or persons in the same or similar business will have such a negative impact on competition if it meets certain criteria. These include: (a) to fix purchase and sale prices directly or indirectly, (b) regulates production, supply, markets, or services, or (c) Creates, directly or indirectly, tender of partnership. Proposed changes The proposed legislation requires the introduction of a new provision as a corporation or association of companies or a person or association of persons, although not engaged in the same business, if they enter into such anti-competitive agreements use or intend to participate if. Impact The proposed rule would assume that companies or individuals not engaged in the same or similar activities would also be considered parties to anticompetitive agreements if they actively participate in promoting such agreements. III. Conclusion Overall, the Competition (Amendment) Act, 2023 is a positive development. The Act is expected to have a significant impact on the Indian economy, as it will help promote competition, reduce anti-competitive practices and protect consumers. The Act is likely to make it more difficult for companies to engage in anti-competitive practices. This is because fines paid to the CCI have increased, and the new powers will make it more costly and risky for companies to engage in anti-competitive practices. The Act is likely to make it easier to investigate and deal with anti-competitive practices by CCI. This is because the expanded anti-competitive treaties will enable the CCI to investigate
