The last few months had been very crucial for the Indian government to seek the amendment of the competition act of 2002. After presenting the competition bill 2022, in the Lok Sabha on August 5, 2022, it went through additional alterations. Due to much debate, the bill was further conveyed to the standing committee in Finance for its review on August 17, 2022. After much deliberation and suggestions from various stakeholders, it was further placed before the Lok Sabha on December 13, 2022.
Finally, the Competition Amendment Bill 2023 was placed and passed by both houses of parliament. The bill got its accent from the president on 11 April 2023 and was notified in the Gazette of India as The Competition (Amendment) Act, 2023 on 11th April 2023.
IMPORTANCE OF COMPETITION AMENDMENT ACT, 2023
This act stands for the most significant modification to the competition law in the twenty years before this one. It seeks to bring the competition policy up to speed with current shifts in company operations, especially in digital markets. Several of the changes suggested by the Competition Law Review Committee are encompassed. The Bill, on the contrary, fails to include a major overhaul of the competition regime, which has been left to the newly established Digital Competition Law Committee to consider.
KEY AMENDMENTS TO THE ACT
Imposes a penalty on ‘global turnover’: Previously the competition commission of India in the Excel crop through a landmark judgment in the 2017 Excel case upheld Competition Appellate Tribunal’s (COMPAT) decision and imposed penalties on ‘relevant turnover’ rather than ‘global turnover’. The definition and scope of such penalty on relevant turnover have put questions to the anti-trust laws of India. The thin line between the two can be said as ‘relevant turnover’ about the producer, seller, distributor, dealer, and supplier of goods and services means turnover arising out of the sale of goods and services over a smaller part particularly limited to its practice of trade within a smaller geographical area. While ‘global turnover’ means the revenue generated by individuals or enterprises on the sale of goods and services all across India and outside and not limited to a particular geographical area.
Jurisprudence of ‘turnover’-
Turnover is a key requirement when assessing whether the ‘de minimis’ exemption and jurisdictional limitations pertain. According to CCI precedents and FAQs, turnover has been defined as the value of revenue from operations,’ encompassing revenue from exports and intra-group sales (which can only be eliminated in certain constrained situations). Under the modification, turnover in India is determined by eliminating intra-group sales, indirect taxation, trade rebates, and all amounts produced by assets or consumers based beyond India.
The scope of global turnover is wide. The 2023 amendment addresses penalizing companies, individuals, and enterprises based on their global turnover because many big companies carry business outside India and the turnover generated from such sales of goods and services outside in other counties is much larger than the relevant turnover of their business.
Penalty on providing false information: Providing false information in the assessment of combinations will incur a penalty of a high value. According to this any person who is a party to the combination who makes a false statement or discloses such wrong information will be penalized a minimum of INR 50 lakhs (Five Million) and the maximum penalty is being increased to INR 5 Crores ( Fifty Million).
Deal value threshold: Sec 6 of the new act provides where the Deals value of mergers and acquisitions exceeds Rs 2,000 crore will further require prior permission of CCI. This is aimed to capture a high amount of deals of big tech companies who hold larger assets and turnover outside India rather than in India. It is not limited to digital markets but also ‘substantial business operations’ in India.
After the amendment of Sec 5 of the principal act inter alia the Competition Act 2002, under Sec 6, of the new act, it substantiates with a change that where the deal value of mergers and acquisitions exceeds Rs 2,000 crore, it will require prior permission of CCI. Eliminate anti-competitive practices.
Less Period for approval of the combination: The period has been reduced for the approval of combinations from two hundred ten days to one hundred fifty days for speedy approval of combinations. Further, CCI shall make a prima facie opinion on whether such a combination will have an adverse appreciable effect on competition in India within thirty days.
Sec 6 of the competition act 2002 amended to include any person or enterprise who proposes to enter into a combination shall give notice to the commission and the fees, within 30 days either after approval of the merger, or execution of the agreement but before consummation of the combination.
Non-rival firms who either ‘participated’ in a cartel or ‘intended to participate’ in a cartel can also be penalized for cartelization. Introduction for filing information to CCI for an anti-competitive agreement or a market abusing its dominant position: Any person who is aggrieved by such an under sec 14 can approach CCI. The time limit has been set to three years of accrual.
Enterprises now include firms and departments established by the government including their units, divisions, and subsidiaries which are engaged economically. An appeal will be prioritized before the National Company Law Appellate Tribunal upon the order of the CCI after the deposit of 25% of the penalty imposed by the CCI.
The amendment bill seeks to address the “deal value threshold” and other provisions that require additional clarity from subordinate legislations are likely to be enforced only after appropriate stakeholder consultations are completed and the regulations are published. Overall, the Amendment Act aims to confront new challenges with a new set of tools, some of which have been tried and tested and others that are still in the trial phase. The bill seeks to foster speedy disposal via enforcement proceedings. The new act thus limits global transactions especially the big start-up companies and pharmaceutical sectors requiring the need of CCI’s approval and imposes fines on turnover and assets based globally.
Author(s) Name: Shuily Biswas (JECRC University, Rajasthan)
 ‘Detailed Analysis of the Competition (Amendment) Bill, 2023 as passed by Lok Sabha’ (Taxman, 03 April 2023)
 The Competition (Amendment) Act 2023
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 Competition Act 2002, s 44
 Competition (Amendment act) 2023, s 6
 Competition Act 2002, s 5
 Competition (Amendment act) 2023, s 6
 Competition (Amendment act) 2023, s 7
 Competition Act 2002, s 6
 Competition (Amendment act) 2023, s 14
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