Towards a Level Playing Field: Evaluating the 2023 Amendment to the Indian Competition Act

The Indian competition law carries the crucial responsibility of promoting fair trade, eliminating anti-competitive practices, protecting consumer interests, and ensuring unrestricted commerce within domestic markets. In response to the prevailing economic challenges, the Competition (Amendment) Act of 2023 has been introduced to reshape the Indian competition law landscape.

This article delves into the significant changes brought forth by this amendment, particularly focusing on the enhanced authority granted to the Competition Commission of India (CCI) to impose penalties based on the criterion of 'global turnover.' Under this criterion, penalties are determined by considering the total revenue generated from all products and law job services provided by individuals or business entities.

The article embarks on a comprehensive exploration of the established legal principles surrounding antitrust penalties as laid out by Indian competition authorities. Additionally, it critically examines the recent amendment and evaluates its potential implications for the enforcement of competition law and the overall innovation ecosystem in the future.

Through an in-depth analysis of the Competition (Amendment) Act of 2023 and its potential ramifications, this article aims to contribute to the ongoing dialogue on the evolution of Indian competition law. By assessing the impact of these changes, it seeks to provide insights into the future trajectory of competition enforcement and its role in shaping the Indian economy and marketplace. 

Introduction to the Amendment

The Competition Act was introduced by the Indian government in 2002 to promote competition in the market, safeguard consumer interests, and ensure fair trade practices. However, over time, the need to review and update

the law became evident due to evolving market conditions, rising litigation, and the emergence of digital markets. After considerable deliberation, the Competition (Amendment) Bill of 2023 was passed by both houses of parliament and received presidential assent on April 11, 2023.

With the President's approval, the Bill has now come into effect, bringing significant reforms and modifications to the longstanding competition law. These changes are aimed at aligning the legislation with India's current economic fundamentals and ensuring compliance with international antitrust practices. The Competition (Amendment) Act of 2023 is the outcome of extensive discussions and deliberations that began in 2019 through the establishment of the Competition Law Review Committee. This committee worked diligently for almost four years to assess the existing law and propose necessary amendments. In 2022, the draft amendment bill underwent a thorough review by the Parliamentary Standing Committee on Finance before being presented to the parliament for further scrutiny and approval.

The enactment of the Competition (Amendment) Act of 2023 signifies a significant milestone in India's competition law landscape. The amendments aim to address the challenges posed by changing market dynamics, promote healthy competition, and protect consumer welfare. By aligning the law with global antitrust practices, the government seeks to create a more competitive environment that fosters innovation, efficiency, and transparency.

As the Competition (Amendment) Act of 2023 comes into effect, it is anticipated that the revised legislation will contribute to a more dynamic and competitive marketplace in India, benefiting consumers and businesses alike. The comprehensive reforms introduced through this amendment signify the government's proactive approach to keeping pace with the evolving economic landscape and fostering a fair and competitive market environment.¹ The amendments are expected to enhance the effectiveness of the Competition Commission of India (CCI) in enforcing competition law, addressing anti-competitive practices, and promoting a level playing field for businesses operating in India.

Changes brought by the amendment

The key amendments introduced in the Mergers and Acquisitions (M&A) segment and other sectors under the Competition Act, 2002 are as follows:

1.  Approval Threshold:

• The Competition Commission of India (CCI) now requires approval for transactions exceeding INR 2,000 crores.
• This threshold replaces the previous requirement that was based on the parties' assets or turnover.
• The possibility of updating the threshold as needed allows for flexibility in aligning it with market dynamics and economic conditions.

2.  Objections and Modifications

• The CCI has been granted enhanced authority to object to proposed M&A transactions if it determines that they may adversely affect competition in the market.
• The CCI can request the parties involved to provide explanations and justifications for their transaction.
• Parties have the opportunity to offer amendments or modifications to address the concerns raised by the CCI.
• If the amendments proposed by the parties are deemed satisfactory by the CCI, the transaction may be approved.

3.  Timelines:

• The overall approval timeline for M&A transactions has been reduced from 210 days to 150 days.
• Within this timeframe, the CCI is now required to provide its opinion within 30 days of receiving the proposal.
• If the CCI fails to provide its opinion within the stipulated 30-day period, it is deemed as the CCI's approval for the transaction.