Provisions of the Competition (Amendment) Act, 2023 that have come into effect. 

The Government of India has made effective from 18th May 2023[1] some provisions of the Competition (Amendment) Act, 2023 (“Amendment Act”), thereby amending the Competition Act, 2022 (“Act”) to that extent. The provisions made effective include sections under the Amended Act on:

• Hub and spoke arrangements wherein enterprises and associations, even though not engaged in identical or similar activity, will be presumed to be part of an anti-competitive agreement if they participate in the furtherance of such agreements;
• Amendment of the definition of the term “enterprise”: it now includes a person or a department of the Government, including units, divisions, and subsidiaries that are or have been engaged in any economic activity.
• Insertion of the definition of the term “party”, which, in addition to the enterprise or a person against whom any inquiry or proceedings is instituted, includes a consumer or an enterprise or a person or an information provider, or a consumer association or a trade association, or the Central Government or any State Government or any statutory authority;
• Amended definition of “relevant product market” and the list of factors to be considered by the Competition Commission of India (“CCI”) in determining the relevant geographic market;
• Introduction of a limitation period of three years for filing of a reference (by the Central Government, State Government or statutory authority) or information (by any person, consumer or association) relating to anti-competitive agreements or abuse of dominant position (under Section 3 and 4 of the Act, respectively), with the power to condone delays on sufficient grounds vested with the CCI;
• Restriction on the CCI to inquire into any agreement if the same or substantially the same facts and issues have already been decided by it previously;
• Amended duties and powers of the CCI, including the power to make suo-motu reference to another statutory authority on issues involving provisions of any law whose implementation is entrusted to that statutory authority;
• Amendment to the procedure for inquiry into anti-competitive agreements and abuse of dominant position (under Section 3 and 4 of the Act, respectively) and conduct of business of the CCI for the same;
• Amendment to the investigation process and powers that may be granted to the Director General by the Chief Metropolitan Magistrate, Delhi, for carrying out search and seizure and duties of the parties under investigation;
• introduction of deposit of one-fourth of the penalty amount in a manner as may be directed by the National Company Law Appellate Tribunal (“NCLAT”) for making an appeal to the NCLAT against orders of the CCI;
• Amendment of fine to civil penalties in cases of contravention of orders or failure to comply with directions of the CCI and enhancement of maximum penalty that may be imposed for making false statement or omission to furnish material information from INR 10 million to INR 50 million;
• powers of NCLAT to initiate contempt proceedings and introduction of provisions on compounding of offences by NCLAT;
• Amendment of the subjects on which rules may be framed by the Central Government or regulations that may be framed by the CCI and the process of framing and finalising the regulations by the CCI, including the process for prior public consultation.

The other substantive provisions of the Amendment Act relating to amendment of merger control regime (i.e. combinations under Sections 5 and 6 of the Act) and introduction of provisions relating to imposition of the penalty based on global turnovers, those on the introduction of settlement and commitment mechanism, amendments to the lesser penalty regime, etc., are expected to be notified in due course after formulation of draft regulations by the CCI and its finalisation after consultation with the public in accordance with the newly enforced Section 64A of the Act.

By: Competition Team at Chitale & Chitale Partners 

For any queries, contact suchitra@chitales.com

[1] Vide Gazette Notification dated 18th May, 2023 bearing No. S.O. 2228(E).