The Competition (Amendment) Bill, 2023, recently passed by the Rajya Sabha, seeks to amend the Competition Act, 2002, which regulates competition in the Indian market. The act prohibits anti-competitive practices such as cartels, mergers, and acquisitions that may have an adverse effect on competition. The Competition Commission of India (CCI) is responsible for implementing and enforcing the Act.
Amendments in the Bill
The bill introduces several significant amendments that aim to promote ease of doing business, enhance transparency, and reduce the compliance burden for companies operating in India.
Penalties: The Bill defines “turnover” for the purpose of penalties as the global turnover derived from all the products and services by a person or an enterprise. The idea is to levy a penalty as a percentage of the global turnover of the offending company, moving away from the current practice of levying a part of the local or relevant market turnover as a penalty.
Decriminalisation: The Bill decriminalises certain offences under the Act by changing the nature of punishment from imposition of fines to civil penalties. These offences include failure to comply with orders of the CCI and directions of the Director-General related to anti-competitive agreements and abuse of dominant position.
Expanding CCI’s Scope: The new provisions expand the scope of CCI’s merger regulation by bringing deals worth more than ?2,000 crore requiring regulator clearance.
Settlement Mechanism: The amendment introduces a scheme for commitment and settlement that is meant to reduce litigation by way of negotiated settlements. This scheme is available to cases of anti-competitive agreements and abuse of dominance, but not to cartels.
Reducing US monetary policy influence: By reducing the use of the US dollar, countries can reduce the influence of US monetary policy on their economies.
Significance of the Amendments
The amendments to the Competition Act are significant for various reasons. Some of the key benefits of the amendments are:
Promoting Ease of Doing Business: The amendments aim to reduce regulatory hurdles and promote ease of doing business in India. The amendments are expected to provide greater clarity to businesses operating in India and reduce the compliance burden for companies.
Enhancing Transparency: The inclusion of global turnover in the definition of “turnover” aims to enhance transparency and accountability in the Indian market. The amendment ensures that companies cannot escape penalties for competition law violations by shifting their revenue to other countries.
Why In News
The Rajya Sabha recently passed the Competition Amendment Bill, 2023, introducing significant changes to the Competition Act, 2002, regulating competition in the Indian market.
MCQs about Key Amendments in the Competition (Amendment) Bill
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What is the Competition (Amendment) Bill, 2023?
A. A bill seeking to amend the Competition Act, 2002
B. A bill seeking to regulate foreign investments
C. A bill seeking to regulate environmental pollution
D. A bill seeking to regulate the media
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What is the significance of the new provisions in the Competition (Amendment) Bill, 2023?
A. To promote transparency and accountability in the Indian market
B. To reduce the use of the US dollar
C. To regulate environmental pollution
D. To promote foreign investments in India
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What is the aim of the settlement mechanism introduced by the Competition (Amendment) Bill, 2023?
A. To increase litigation by way of negotiated settlements
B. To reduce litigation by way of negotiated settlements
C. To introduce more competition in the market
D. To reduce the scope of CCI’s merger regulation
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