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Legislations

Major Changes in The Competition (Amendment) Bill, 2020

Amendments to regulatory structure

  • Establishment of a Governing Board.
  • Segregation of administrative and rule-making powers of the CCI from the decision-making powers; former powers to vest in the Governing Board.
  • The CCI to have the power to appoint the DG.

Procedural Amendments

  • The CCI may not inquire into conduct under Sections 3 or 4, if such conduct or a substantially similar conduct has been previously decided.
  • Provision for show cause notice and opportunity to be heard if CCI finds contravention where the DG did not recommend contravention.
  • The DG granted power to call experts to assist in investigations.
  • Leniency applicants permitted to withdraw applications.
  • “Leniency plus” regime introduced.
  • Penalty on individuals capped at 10% of average income.
  • Introduction of settlements and commitments.
  • Appeals to NCLAT only upon deposit of <= 25% of penalty imposed by the CCI.
  • The DG obligated to return materials provided by parties within 180 days.
  • The DG granted power to depose third parties not under investigation, with approval of the CCI.
  • Obligation on Governing Board to invite comments on regulations.
  • Obligation on the CCI to issue guidance on imposition of penalty.

Enforcement Amendments

  • ‘Enterprise’ to include all legal entities; explicit inclusion of economic activities.
  • Determination of relevant product market to account for supply side substitutability (current definition only mentions demand-side substitutability).
  • Scope of cartels (Section 3(3)(a)) broadened to include buyer cartels and hub and spoke arrangements.
  • Section 3(4) broadened to include all agreements which are not horizontal in nature.
  • Amendments in the explanation to Section 3(4) to bring clarity to the illustrative list of vertical agreements.
  • IPR exemption to apply to conduct under Section 4 (abuse of dominance) (currently, this exemption is limited to anticompetitive agreements).
  • Clarification of, and addition to, factors to be taken into account for determination of (i) appreciable adverse effect on competition (AAEC), (ii) relevant product market and (iii) relevant geographic market.
  • Meet the competitors defense under Section 4(2)(a)(i) widened to include both price and conditions.

Amendments to Merger Control

  • Ambit of ‘control’ and ‘group’ widened.
  • Deemed approval timeline reduced to 150 days (+30 days to respond to notice and clear defects).
  • CCI and Central Government given the power to specify new thresholds for notification and exemptions to notification.
  • Amendment to timelines applicable for inquiries into combinations by the CCI.
  • Modifications offered by parties permitted in instances of combinations resulting in AAEC.
  • Parties permitted to acquire shares by way of an open offer prior to obtaining CCI’s approval.
  • Legislative basis provided for green channel approval, de minimis notification, other exemptions; and removal of time limit within which notification must be filed

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