COMPETITION LAW REVIEW COMMITTEE
What’s in news?
A Committee constituted to review competition law has recommended introduction of a green channel fast approval of mergers and acquisition
The government had constituted a Competition Law Review Committee last October to review existing Competition law framework and make recommendations to further strengthen the framework to inter alia meet new economy challenges.
- The Report of the Competition Law Review Committee chaired by Corporate Affairs Secretary Injeti Srinivas submitted to Union Finance and Corporate Affairs Minister.
- Under the Competition Act, combinations (mergers and acquisitions) beyond a certain threshold require clearance from the Competition Commission of India (CCI).
- The key recommendations of the Competition Law Review Committee are:
- Introduction of a ‘Green Channel’ for combination notifications to enable fast-paced regulatory approvals for vast majority of mergers and acquisitions that may have no major concerns regarding appreciable adverse effects on competition. Combinations arising out of the insolvency resolution process under the Insolvency and Bankruptcy Code will also be eligible for “Green Channel” approvals.
- Introducing a dedicated bench in NCLAT for hearing appeals under the Competition Act.
- Introduction of express provisions to identify ‘hub and spoke’ agreements as well as agreements that do not fit within typical horizontal or vertical anti-competitive structures to cover agreements related to business structures and models synonymous with new age markets.
- Additional enforcement mechanism of ‘Settlement & Commitments” in the interests of speedier resolution of cases of anti-competitive conduct.
- Enabling provisions to prescribe necessary thresholds, inter alia, deal-value threshold for merger notifications.
- CCI to issue guidelines on imposition of penalty to ensure more transparency and faster decision making which will encourage compliance by businesses.
- Strengthening the governance structure of CCI with the introduction of a Governing Board to oversee advocacy and quasi-legislative functions, leaving adjudicatory functions to the Whole-time Members.
- Merging DG’s Office with CCI as an ‘Investigation Division’ as it aids CCI in discharging an inquisitorial rather than adversarial mandate. However, functional autonomy must be protected.
- Opening of CCI offices at regional level to carry out non-adjudicatory functions such as research, advocacy etc. and interaction with State Governments and State regulators.
Competition Commission of India:
Competition Commission of India is a statutory body of the Government of India, responsible for enforcing the Competition Act, 2002 throughout India and to prevent activities that have an adverse effect on competition.
The Competition Act:
The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.
Need for review:
- During the past nine years the size of the Indian Economy has grown immensely and India is today amongst the top five Economies in the World and poised to forge ahead further.
- It is essential that Competition Law is strengthened, and re-calibrated to promote best practices which result in the citizens of this country achieving their aspirations and value for money.
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