Competition (Amendment) Bill: How it is looking to change CCI's functioning

Bill proposes to let individual members of the 6-member board to decide on matters for faster disposal of cases

The Union Cabinet has cleared the Competition (Amendment) Bill, 2022, and is set to table it in the ongoing Monsoon session of Parliament. The Bill aims to bring in more flexibility, agency, and accountability to the Competition Commission of India (CCI). Here’s a look at the salient changes that the Bill may usher in.

What are the changes being proposed?

Established in October 2003, the CCI is a regulatory authority tasked with checking and eliminating business practices that may harm competition. In the process, the CCI also protects the interest of consumers and ensures freedom of trade in Indian markets. The body consists of a chairperson and 6 members appointed by the central government.

The Bill aims to bring more flexibility to the CCI’s working, while also strengthening its enforcement efficiency as well as transparency.

Flexible decision-making

The Bill proposes to let individual members of the six-member board to decide on cases. At present, regulations demand that at least three members decide on each case. Letting single members decide on cases is expected to help dispose of them quicker.

This is because the CCI handled nearly 240 cases a year on average in the three years till FY21, and could settle an average of just 80 cases, according to government data.

Room for negotiations

The Bill also proposes that businesses accused of anti-competitive practices should be allowed to settle cases by negotiating with the CCI. While the watchdog has the power to show leniency towards, or even fully pardon, members of business cartels if they cooperate in the investigation and provide crucial information regarding malpractices, it cannot negotiate settlements with individuals or companies. If the Bill passes, the “negotiated settlements and commitments” clause will help avoid long-drawn proceedings, cut down litigation, and provide soft-exit windows for uninformed or ill-informed individuals and businesses.

Widening definitions

The Bill also proposes an expansion of the prohibited anti-competitive agreements to cover new-age marketing arrangements, specifically the hub-and-spokes model of cartels. At present, prohibited anti-competitive agreements fall in the class of those among parties in the same line of business or those at different stages of production or supply. This revision in the definition of anti-competitive agreements will make the regulator’s checks and balances foolproof.

Moreover, the definition of customers would be updated as well to include government agencies making procurements.