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Competition Act gets a facelift with new amendments in 2023

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The Competition (Amendment) Act, 2023 (“The Act”) has been gazetted on 11th April 2023 just a day before SEBI’s 35th Foundation Day and the Indian markets are about to undergo a significant change with the introduction of the Act.

The new Act brings in several key amendments to the existing Competition Act, 2002, including the dilution of threshold for control, introduction of the deal value threshold, and provisions for settlements and undertake commitments. There is also an introduction of a limitation period of 3 years to file a complaint with Competition Commission Of India. However, the amendment that mandates the deposit of 25% of the penalty at the time of filing an appeal with NCLAT against a Competition Commission Of India ruling has sparked a debate. While the amendment aims to deter aggrieved parties from filing appeals and increase the recovery of penalties, it also shifts the cost burden to businesses.

Early this year, former Competition Commission Of India Member Dr. M. S. Sahoo a/w former SEBI Officer Mr. Sumit Agrawal in businessline had analysed the proposal in the Competition (Amendment) Bill, 2023 that sought to mandate the aggrieved party to deposit 25% of the amount due under the Competition Commission Of India order before an appeal against it is admitted. The authors opined that this cost could be a trade-off between a cost to government vs. cost to business. [Link to post: https://lnkd.in/dfsJ_qfB]

Since its inception the Competition Commission Of India has imposed an aggregate penalty of nearly ₹20,000 crore. By approving the said amendment, the Government has chosen to let the businesses bear the cost of doing business. However, it is interesting to note that the Amendment also requires the Competition Commission Of India to publish guidelines regarding the appropriate amount of penalty to be levied for any contravention of the Act.

It will be interesting to see how these amendments will deter the aggrieved from filing appeals, increase recovery of penalty imposed while keeping intact the ease of doing business. More importantly, only time will tell how these amendments will shape the Indian markets and whether other regulators will follow suit.

Competition (Amendment) Act, 2023 can be accessed at https://lnkd.in/dqEZW2YX

Followers can reach out to Regstreet Law Advisors team at info@regstreetlaw.com.

Any feedback / comment is most welcome.

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