{"id":29697,"date":"2020-03-20T11:24:13","date_gmt":"2020-03-20T05:54:13","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=29697"},"modified":"2024-05-22T11:49:34","modified_gmt":"2024-05-22T06:19:34","slug":"a-glance-through-cci-competition-amendment-bill-2020","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/a-glance-through-cci-competition-amendment-bill-2020\/","title":{"rendered":"A Glance through CCI &#038; Competition Amendment Bill 2020"},"content":{"rendered":"<p class=\"has-drop-cap\">The Ministry of Corporate Affairs (MCA) recently came out with the drafts for intended amendments to the Competition Act, 2002. In the wake of the necessity of competition, the role of Competition Commission of India (CCI), being the competition regulator becomes critical. The Competition <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Amendment&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;An &amp;quot;amendment&amp;quot; refers to the formal change or correction of a legal document, often involving additions, variations, or deletions to address irregularities or clarify points in an agreement.(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/amendment\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Amendment<\/a> Bill seeks to make the CCI more efficient and transparent in its operations. The ministry put the draft of Competition Amendment Bill 2020 in the public domain on 20<sup>th<\/sup> February 2020 for public comments. &nbsp;The thought process behind intended amendments to the competition act 2002 however,&nbsp; began when the Ministry of Corporate Affairs instituted an independent committee, CLRC Competition Law review Committee, to review the Competition Act 2002 and its rules and regulations on October 2018. In this article, we shall cover CCI and the proposed amendment to the Competition Act 2002. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is CCI?<\/h2>\n\n\n\n<p>Competition\nCommission of India (CCI) was formed under the Competition Act of 2002. It was\nestablished to enforce, implement and administer this Act. Competition is\nessential for the common man to avail goods and services at a competitive\nprice. Increase in competition in the <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market<\/a> would let the producers innovate,\nresulting in a broad range of goods and services. It would also reduce the\ncosts of commodities in the market.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Objectives of CCI<\/h2>\n\n\n\n<p><strong>The competition commission has the following objectives-<\/strong><\/p>\n\n\n\n<ul>\n<li>To create and maintain fair competition in the economy.<\/li>\n\n\n\n<li>Prevention of practices that have adverse effects on\ncompetition<\/li>\n\n\n\n<li>To protect the interests of the consumer<\/li>\n\n\n\n<li>To promote freedom of trade in the market<\/li>\n<\/ul>\n\n\n\n<p>&nbsp;<strong><em>Overview of Competition Amendment Bill<\/em><\/strong><\/p>\n\n\n\n<p>After\nthe (CLRC) Competition Law Review Committee examined the Act, the CLRC\nsubmitted its report to the MCA on august 2019. In its report, the CLRC gave\nvarious suggestions for amendments to the provisions of the Act. The MCA, after\nreviewing the recommendations of the CLRC, prepared the draft. The bill was\npublished publically on 20<sup>th<\/sup> February 2020 for public comments. A\nclose look on the Competition Amendment Bill indicates that the bill intends to\nprovide clarity over some of the provisions of the Act and it seeks to ensure\ntransparency and proposes to make the system more efficient.<\/p>\n\n\n\n<p><strong>Let&rsquo;s briefly take a look at the changes proposed in the Competition Amendment Bill 2020:<\/strong><\/p>\n\n\n\n<ul>\n<li><strong>Changes in the regulatory structure of CCI<\/strong>&ndash;<\/li>\n<\/ul>\n\n\n\n<p>In order to make CCI more efficient to tackle modern issues,\nthe CLRC suggested change in the regulatory structure.<\/p>\n\n\n\n<p>The bill seeks to constitute a governing board headed by the\nchairperson of CCI and other six whole-time members from CCI. The governing\nboard shall also comprise of the secretary of MCA and his nominee, secretary of\nDEA Department of Economic Affairs and four other members nominated by the\ncentral government. The governing body shall make regulations, come up with\nmeasures to increase awareness and set up a National Competition Policy. The\ngoverning board shall be responsible for the direction and management of the\naffairs of CCI. The Competition amendment bill allows for the formation of\npanels comprising of three members. However, the bill doesn&rsquo;t mention the\nprocedure of nomination of the members of the governing board. The selection\ncommittee entrusted with making recommendations for the position of the\nchairperson and other members shall not make such recommendations for the\npart-time members.<\/p>\n\n\n\n<ul>\n<li><strong>Issuance of penalty guidance<\/strong>&ndash;<\/li>\n<\/ul>\n\n\n\n<p>The bill proposes the CCI to issue penalty guidelines. The\npenalty guidance may give recognition to the turnover principles and shall\nspecify the process of determination of the percentage of the penalty and the\napplication of mitigating and aggravating factors. The CCI has the authority to\nenforce prohibitive penalties. The bill doesn&rsquo;t impose a mandatory limit in\nwhich the guidelines will be imposed yet the guidance might cause clarity.<\/p>\n\n\n\n<ul>\n<li><strong>Provision of inviting public comments<\/strong>&ndash;<\/li>\n<\/ul>\n\n\n\n<p>In a measure to ensure transparency and an element of democratic\nrulemaking, the competition amendment bill requires the governing board to seek\npublic comments on regulations. An exception to this rule includes regulations\nconcerning the internal working of the CCI and urgency in public interests.<\/p>\n\n\n\n<ul>\n<li><strong>Changes in regulation of combinations<\/strong>&ndash;<\/li>\n<\/ul>\n\n\n\n<p>The Competition Amendment Bill proposes an overhaul of the\nprocedure of regulation of combinations. These include curtailing time limit to\n150 days instead of 210 days for deemed approval.<\/p>\n\n\n\n<p>CCI has been conducting inquiries into combinations despite a\nlot of stark flaws in the existing inquiry procedure. The bill, however,\nintends to correct these flaws by giving statutory sanctity to the procedures\nby the CCI. It will ensure fewer chances of appeals against combination orders.<\/p>\n\n\n\n<p>The bill provides statutory recognition to the green channel\nprocess of the CCI by ensuring that the central government can specify a deemed\nprocess of approval for transactions that are not exempted from notification to\nCCI. This provision will help the CCI to validate non-contentious transactions.<\/p>\n\n\n\n<ul>\n<li><strong>Provision of new thresholds<\/strong>&ndash;<\/li>\n<\/ul>\n\n\n\n<p>The Competition Amendment Bill authorises the CCI and the\ncentral government to specify new thresholds for merger notification. It can be\nnotified in the public interest. The new thresholds will allow the CCI to make\nsector-specific thresholds either based on deal value or any other criteria.\nThis amendment could be due to CLRC&rsquo;s suggestion to capture transactions in the\ndigital market. The application of this authority requires caution because of\nthe vigorous nature of the digital markets. It may also impact the ease of\ndoing business and might result in increased cost for businesses. It is more\nnecessary to have a detailed economic and legal analysis of the value, <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Basis&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;In finance, the &amp;quot;basis&amp;quot; is a term with several applications, including representing the difference between the spot price and the future contract price of an asset, which is vital in investment(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/basis\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>basis<\/a>\nand necessity of such thresholds.<\/p>\n\n\n\n<ul>\n<li><strong>Expanded definition of cartel<\/strong>&ndash;<\/li>\n<\/ul>\n\n\n\n<p>Now a buyer&rsquo;s cartel shall also be included under the\ndefinition of the cartel according to the proposed Act. This means that the\nprovision of appreciable adverse effect on competition shall also apply to the\nbuyer&rsquo;s cartel. However, it appears that the inclusion of a buyer&rsquo;s cartel and\nthe provision of appreciable adverse effect on competition are contrasting to\nthe CCI&rsquo;s earlier statement.<\/p>\n\n\n\n<ul>\n<li><strong>Widening the scope of protection to the owners of IPR<\/strong>&ndash;<\/li>\n<\/ul>\n\n\n\n<p>The bill, according to the recommendations of the CLRC, proposes to expand protection to the owners of the intellectual <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Property&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Property refers to the legal designation of ownership over valuable items or assets held by an individual or a business. This ownership grants the holder certain legal rights to use, consume,(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/property\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>property<\/a> rights. It would bring equality in the treatment of abuse of dominant position and anti-competitive agreements. The <a href=\"https:\/\/enterslice.com\/learning\/ipr-assignment-contracts\/\"><strong>Intellectual Property Rights<\/strong><\/a> holders are presently exempted only for anti-competitive agreements. The bill will widen the scope of protection of IPR holders.<\/p>\n\n\n\n<ul>\n<li><strong>The rule of settlements and commitments<\/strong>&ndash;<\/li>\n<\/ul>\n\n\n\n<p>In a highly crucial move, the bill proposes initiation of provisions\nthat allows an investigated party to voluntarily undertake commitments or offer\na settlement with respect to an anti-competitive agreement or abuse of dominant\nposition. The bill envisages the following with regard to settlements and\ncommitments:<\/p>\n\n\n\n<ul>\n<li>Before a final order is\nmade by the CCI, an application can be submitted for settlement after the\nreceipt of the investigation report by the Director-General whereas the\napplication for the commitments can be filed at any time after investigation\norder has been made. However, it must be made before the receipt of the\ndirector general&rsquo;s report.<\/li>\n\n\n\n<li>The CCI has the power to\neither accept or reject applications at its own discretion for either\nsettlements or commitments after considering the gravity and the nature of the\ncontravention and in accordance with the regulations under the Act.<\/li>\n\n\n\n<li>The order of acceptance or\nrejection by CCI regarding settlements and commitments shall not be\nmaintainable in the appellate courts.<\/li>\n\n\n\n<li>An order regarding the\nacceptance or rejection can be revoked by CCI if it finds that the applicant\nhasn&rsquo;t made true disclosure or if it is of the opinion that there has been a\nmaterial change in the facts.<\/li>\n<\/ul>\n\n\n\n<p>As a matter of fact, this amendment in the settlement\nand commitment process shall permit quicker disposal of cases, thereby both CCI\nand the investigated party can avoid the unnecessary long procedure of\ninvestigations. However, there is not enough clarity on the question whether\nthe proposed settlements and commitments shall have a retrospective effect,\ni.e., application to existing cases and whether the right to claim compensation\nexists in case of settlements.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Takeaway<\/h3>\n\n\n\n<p>&nbsp;The bill promises to be a positive step\ntowards development. It fills certain gaps in the statue. The CCI is important\nmachinery, and for the proper working of this institution, there must be no\nhalf measures. It appears that the drafts amendments if implemented, shall\nbenefit the consumers and may help the CCI to perform better. The Competition Amendment\nBill provides for a new and strong system of settlements and commitment, which\nis seen as a welcome move. However, the bill leaves the stakeholders desiring\nfor more as they feel that the bill doesn&rsquo;t provide with clarity on the\nprocedure of inquiry or that it should have contained a provision for a\nseparate bench for the National Companies Law Tribunal.<\/p>\n\n\n\n<div class=\"read\"><p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/enterslice.com\/learning\/mca-revised-timelines-and-fees-for-charge-filing\/\" target=\"_blank\" rel=\"noopener noreferrer\">MCA Revised Charge Filing Fees and Timelines\n<\/a><\/mark>.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Ministry of Corporate Affairs (MCA) recently came out with the drafts for intended amendments to the Competition Act, 2002. In the wake of the necessity of competition, the role of Competition Commission of India (CCI), being the competition regulator becomes critical. The Competition Amendment Bill seeks to make the CCI more efficient and transparent [&hellip;]<\/p>\n","protected":false},"author":35,"featured_media":29698,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,2611],"tags":[],"acf":{"service_id":"215"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Understanding the CCI &amp; Competition Amendment Bill 2020<\/title>\n<meta name=\"description\" content=\"The ministry put the draft of Competition Amendment Bill 2020 in the public domain on 20th February 2020 for public comments.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/a-glance-through-cci-competition-amendment-bill-2020\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Understanding the CCI &amp; Competition Amendment Bill 2020\" \/>\n<meta property=\"og:description\" content=\"The ministry put the draft of Competition Amendment Bill 2020 in the public domain on 20th February 2020 for public comments.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/a-glance-through-cci-competition-amendment-bill-2020\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2020-03-20T05:54:13+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-05-22T06:19:34+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/A-Glance-Through-CCI-Competition-Amendment-Bill-2020.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"670\" \/>\n\t<meta property=\"og:image:height\" content=\"352\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Ashish M. 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He is a creative thinker and has a great interest in exploring legal subjects.","postViews":451,"readingTime":5,"nextPost":{"id":29715,"slug":"guidelines-mandated-by-rbi-on-regulation-of-payment-aggregators"},"prevPost":{"id":29688,"slug":"securities-and-exchange-board-of-india-structure-and-powers"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/A-Glance-Through-CCI-Competition-Amendment-Bill-2020.jpg","postTerms":"Latest News","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/29697"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=29697"}],"version-history":[{"count":2,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/29697\/revisions"}],"predecessor-version":[{"id":86007,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/29697\/revisions\/86007"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/29698"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=29697"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=29697"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=29697"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}