Several amendments to the long-awaited Competition Bill, proposed by the parliamentary committee including more powers to the proposed Competition Commission, was cleared by the Union Cabinet on Thursday.
However, an amendment empowering the Commission with judicial powers has been rejected by the government since it is envisaged to be only a quasi-judicial body and not required to sue anyone, official sources said after the Cabinet meeting.
Parliamentary Standing Committee on Home Affairs submitted its report on the Bill on August 23 this year with several far-reaching recommendations.
The Competition Bill seeks to replace the existing Monopolies and Restrictive Trade Practices Act.
Among the other amendments cleared by the Cabinet include amending the definition of combination in the Bill, empowering the CCI to grant temporary injunction restraining any enterprise from importing goods if it is likely to contravene the law, and transfer all monies collected as penalties under this provision to the Consolidated Fund of India, the sources said.
By changing the definition of ‘combination', the Bill will be empowered to consider the assets/turnover of the acquiring group along with that of the acquired enterprise for determining whether the merged entity would attract an enquiry from the proposed commission.
This amendment would have wide ramifications, specially for companies entering into merger and acquisition deals as they would come under commission's scrutiny.
Other suggestions not accepted by the government pertain to appointment of a judge as chairperson of the CCI and that the qualification of the chairperson should be different from its other members.
As per the Bill, CCI would comprise up to 10 members but it will have no jurisdiction over unfair trade practices unlike its predecessor Monopolies and Restrictive Trade Practices Commission.
The three main ingredients of the proposed Bill include checking abuse created by anti-competitive practices such as cartelisation, collusive bidding and bid rigging besides abuse of dominance and procedures relating to acquisitions and mergers.
CCI will be set up mainly to encourgae competition and ensure that there is no abuse of dominance. Also, in the case of merger of two existing entities, CCI will be empowered to review the proposal if the merged entity could lead to elimination of competition.
For the purpose, the Bill has set up a threshold minimum size of potentially merged entity at over Rs 1,000 crore (Rs 10 billion) asset or annual turnover of Rs 3,000 crore (Rs 30 billion).
If the merged entity crosses this threshold limit, it can either take post or prior permission from the CCI.
