As it steps up scrutiny of anti-competitive practices, chief Ashok Kumar Gupta has said the proposed introduction of the settlement and commitment framework under the competition law will help reduce litigations and ensure faster market corrections.

The Competition Commission of India (CCI), which works to ensure fair business practices in the marketplace, is already empowered to invoke leniency provisions in cartel cases, subject to certain conditions.

On August 5, the government introduced the Competition (Amendment) Bill, 2022 in the Lok Sabha to amend various provisions of the competition law and the bill has been referred to the Parliamentary Standing Committee on Finance.

Among the amendments proposed is the introduction of the settlement and commitment framework, which will help reduce litigations.

“The existing statutory framework already provides for lesser penalty for cartels on self-reporting. Thus, the commitment and settlement mechanism for certain anti-competitive agreements… would make the law holistic in providing for trust-based solutions,” Gupta told PTI.

Gupta noted that the proposed settlement and commitment mechanism is likely to enable the regulator to resolve anti-trust cases faster and free up its scarce resources.

Once the framework is in place, entities concerned will have the option to address the anti-competitive issues in a swifter manner, without undergoing lengthy investigations and inquiries.

The framework will not be applicable for cases of cartelisation for which already the mechanism of leniency exists under the law.

For instance, if has ordered an investigation against an entity, then the latter can look at the option of giving a commitment to the regulator to cease the anti-competitive conduct and seek closure of the case. This option can be availed only before the Director General (DG) submits the detailed probe report in the case concerned.

With respect to the settlement option, the entity under probe can exercise the same after receiving the DG report and before the final order is passed by . In such instances, the regulator will levy an amount towards settlement charges.

Both commitment and settlement provisions will be subject to CCI being satisfied with the merit of a particular case. Also, under the framework, the entity concerned will not be required to admit the alleged anti-competitive conduct.

According to Gupta, in recent years, many competition authorities have been granted the power to accept remedies from parties to an anti-trust proceeding.

The settlement mechanism is prevalent in various overseas jurisdictions under different regulations. Domestically also, for instance, markets regulator, such as Sebi, has a settlement mechanism in place wherein an entity can settle the case by paying settlement charges without accepting or rejecting the violations.

As on February 28 this year, CCI received a total of 1,180 cases under Sections 3 and 4 of the Act. Out of them, 1,046 cases were disposed of and 4 were quashed/ set aside by courts, the government informed the Lok Sabha on March 14.

Section 3 pertains to anti-competitive agreements and Section 4 relates to abuse of dominant position.

Among other amendments, the government has proposed a reduction in the time limit for combination approvals and decriminalisation of certain contraventions.

Another proposal is for the introduction of a deal value threshold of Rs 2,000 crore as an additional criterion for notifying mergers and acquisitions to CCI for approval if the target entity has significant business operations in India.

It will be the first time since the enforcement of the Competition Act in 2009 that amendments will be made to the Act.

The Competition (Amendment) Bill, 2022, has also proposed provisions for having ‘value of transaction’ as a criteria for notifying combinations to the Competition Commission of India (CCI).

It will be the first time since the enforcement of the Competition Act in 2009 that amendments will be made to the Act.

The Act was brought in 2002 and subsequently, it underwent amendments in 2007 and 2009. In May 2009, the anti-trust provisions of the law came into force and two years later in May 2011, the CCI started screening mergers and acquisitions.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Source link

By fintax360

We Fintax360 team simplify finances and taxes for millions of Indian businesses and people. We educate them about finances, taxes and improve their relationship with money.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: