Government Seeks Amendment Of Competition Act, 2002
The government is seeking approval from the Parliament for amending the Competition Act, 2002, to ensure that mergers and acquisitions (M&As) that involve large tech firms from around the world and producing an "appreciable" impact on Indian markets do not get past the nation's antitrust oversight.
The Competition (Amendment) Bill, 2022, that was passed by the parliament on the Friday suggests that all transactions worth more than 2 million dollars must be dependent on the Competition Commission of India's (CCI) prior approval in the event that the company has "substantial activities" that are located in India. The bill also defines the procedure to determine if an organization is operating "substantial commercial operations" within India as well.
According to reports from the Bill will also include several other amendments of the Act to reflect the latest market trends, such as the reduction of the time frame to approve combinations from one hundred days to just 150 days. Additionally, the bill seeks to create a mechanism to settle any violations in connection with certain "anti-competitive agreements and misuse of dominance". Settlement applications can be filed after the receiving the investigation report and before the passage of the an order of finality from the CCI. The commission is able to determine the rules for calculating settlement amounts.
The idea of introducing deal value as a third factor for M&A review was first suggested by the Competition Law Review Committee in its 2019 report. In many cases, businesses who thrive on digital platforms rely on the data they collect by their large audience for the creation of value. Although Germany has amended its law on competition in this regard and many other countries are following the same pattern. In the case of India the trigger for the change was Facebook's acquisition WhatsApp during 2014, for $19 billion. The deal did not require approval of the CCI even though India was already an important marketplace for WhatsApp. In reality the EU competition regulator imposed the fine in the amount of 110 million euro to Facebook for supplying false information regarding this deal WhatsApp.
Shweta Shroff Chopra Partner-Competition Law, Shardul Amarchand Mangaldas & Co She stated: "While this change will expand the CCI's merger-review authority, much will depend on how CCI decides on'substantial' local relationship." An ex-CCI member said under an anonymity basis that "there isn't a lot of transparency regarding the threshold set within the Bill".