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Govt plans major amendments to Competition Act, may curtail CCI's powers

Veena Mani/New Delhi 10 Jan 19 | 09:55 PM

The government is planning major amendments to the Competition Act, which entail changing the definition of “relevant market" and altering the threshold for mergers and acquisitions.

Working groups within a committee are working on the details relating to these.

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The committee is discussing changing the definition of an enterprise in the Act. The Competition Commission of India (CCI) decides penalties based on the turnover of the relevant market of an industry.

A source involved in the discussions said “the government feels that the current threshold for mergers and acquisitions to be exempt from the competition regulator’s approval is too low. They feel it should be raised".

Currently, a company being acquired is exempted from the CCI’s purview of mergers and acquisitions if it has assets not exceeding Rs 250 crore and a turnover not more than Rs 1,000 crore. 

The working groups are looking at how to have multiple Benches of the CCI instead of one centralised Bench in New Delhi.

Sources say the committee is also deliberating whether there is a need to have a separate division in the commission to examine mergers and a separate one to examine anti-trust cases.

The government is planning to expand the role of the CCI by making it a body that will engage with the Centre and states in formulating their policies and revising them so that competition is not affected.

The government also wants the CCI to be a think tank that will analyse policy frameworks rather than only investigate cases and impose fines on those who violate competition law.

The Competition Act was legislated in 2002 but the CCI became fully operational in 2009. 

The ministry said the need to amend the Act arose because the dynamics had changed and the size of India's economy had grown immensely in these nine years. 

India's economy is now the fifth-largest in the world and will grow, it said.

Earlier this year, Corporate Affairs Secretary Injeti Srinivas had said the commission should work like a regulator and not a tribunal or court. He also said in discharging its advocacy role, the commission needed to do more. Further, the government planned to set up regional offices of the commission so that the body at the Centre was not burdened, according to him.

Recently, the government reduced the number of members in the commission to three from the previous six. The government is planning to let the commission have part-time members to ease its workload.

Below these members, the commission has a little more than half the sanctioned 91 positions vacant at the level of secretary, advisor, director, joint director and deputy director.

In the director-general’s office, which investigates cases, there are 17 vacancies among the 33 sanctioned posts for the positions of director-general, additional director-general, joint director-general and deputy director.

Over the years, the number of the CCI’s orders quashed by the appellate body that looks at competition appeals has reduced. Earlier, the Competition Appellate Tribunal (COMPAT) was the appellate body, but in 2017 it was replaced by the National Company Law Appellate Tribunal (NCLAT).

According to the official data, 87 orders passed by the CCI were set aside by the appellate tribunal in 2015-16, and it came down to 69 in 2016-17 and just four in 2017-18.

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