Government proposes changes to competition law; moots settlement framework

The government proposed a slew of amendments to the competition law on Friday, including the introduction of a settlement framework, a reduction in the time limit for combination approvals and provision for incentives for parties to disclose information in cartel probes.

The Competition (Amendment) Bill, 2022, introduced in the Lok Sabha, also proposed provisions for having "value of transaction" as a criterion for notifying combinations to the Competition Commission of India (CCI). These amendments are aimed at catching up with the business models of the new age companies along with broadening the scope of anti-competitive agreements and providing time-bound approvals for combinations.

These changes are based on recommendations given by Competition Law Review Committee.

"There has been a significant growth of Indian markets and a paradigm shift in the way businesses operate in the last decade," Union minister for finance and corporate affairs Nirmala Sitharaman said in the statement of purpose of the bill. "After review of the recommendations proposed by the committee, public consultations and with a view to provide regulatory certainty and trust-based business environment, it is considered imperative to amend the said Act."

Until now, corporate deals such as mergers and acquisitions needed to notify the CCI only if the parties involved in the deal had assets or turnover more than a certain threshold. More specifically, if the asset size of the company was more than ₹2,000 crore or if the turnover of the company was more than Rs 6,000 crore, the approval of the CCI was required.