Proposed Amendments in the Competition Act to Cover Tech Cos

Author: thinkinglegal | March 13, 2020 - 18:48 | Tags: Competition Law

On February 21, 2020, the Ministry of Corporate Affairs (“MCA”) had invited comments on the proposed Draft Competition (Amendment) Bill, 2020 (“Draft Bill”).

Central Government to prescribe additional criteria for M&A deals: Currently, only deals above a particular value of assets or turnover are subject to scrutiny by the Competition Commission of India (“CCI”). Now, the Central Government, in consultation with CCI, will also have the power to prescribe certain additional criteria that will trigger a combination filing. This proposed amendment will address situations where certain high-value deals especially between the big technology companies could escape the Commission’s review due to certain high-value companies not meeting turnover / asset - based thresholds.

“Settlement and Commitment” Clause introduced: The Draft Bill also proposes to add an enabling clause in the Act that will allow Companies under investigation for abuse of dominance or entering into an anti-competitive agreement to apply for settlement even before the investigation is completed. The Companies can enter into settlement even in cases where investigation is over and the adjudicating process has started. The Companies may offer a monetary amount or certain commitments to settle the alleged anti-competitive practice.

Hubs and Spoke Cartel: The Draft Bill has also proposed to cover hub-and-spoke cartel under Section 3(3) of the Act. This section specifically deals with cartels that hinder competition. Accordingly, an enterprise can be presumed to be part of a horizontal agreement if it actively participates in furtherance of an agreement, irrespective of whether it competes with other parties or not.

This post has been contributed by Ms. Vaneesa Agrawal and Mr. Rishi Ahuja.

[DISCLAIMER:  This article is for academic purpose and is solely to provide readers with general information regarding developments in Indian law. The information contained herein does not constitute legal or a professional advice.]