Modi govt constitutes a committee to review the Competition Act

The government has constituted a panel under the chairmanship of Corporate Affairs Secretary Injeti Srinivas to review the competition act in sync with the changing needs of the country's economy.

"In pursuance of its objective of ensuring that legislation is in sync with the needs of strong economic fundamentals, the government has constituted a Competition Law Review Committee to review the Competition Act," the Ministry of Corporate Affairs said in a statement on Sunday.

However, the committee has been given three months to recommend changes. By then, the winter session of Parliament may be over. It will be interesting to watch if government moves amended bill in the Budget Session which will be the last session of this regime. 

The Competition Act was enacted in 2002 but the Competition Commission of India (CCI) became fully operational in 2009. The ministry said the size of India's economy has grown immensely in these nine years and it is now the fifth largest economy in the world and will further grow in the coming years.

This requires re-calibration of the Act so that citizens realises value of their money, the ministry said.

Sources say that the committee might suggest giving the Competition Commission of India the right to seizure. At present they do not even have the right to enter premises, explained a competition expert. The Committee will consider changes in merger rules from the competition perspective. At present, all mergers and acquisitions above a threshold are looked into by the competition commission to ensure it doesn't lead to a monopoly. The panel will also look at cross border competition.

Earlier this year, Srinivas said the commission should work like a regulator and not a tribunal or a court. He also stated that 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, he had said.

Recently, the government reduced the number of members in the commission to three members, along with the chairperson, along with the previous six. The government plans to let the commission have part-time members in order to ease its workload. 

Below these members, the commission has 43 positions of the sanctioned 91 at the level of secretary, advisor, director, joint director and deputy director.

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

Over the years, fewer orders passed by the CCI are being quashed by the appellate body that looks at competition appeals. 

According to 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. Competition lawyers say this is because the commission has streamlined its investigations. Many orders passed by the commission have been quashed on procedural grounds, which is not happening now.

In 2017, the government merged the Competition Appellate Tribunal with the National Company Law Tribunal.

“The timing for a review of the Competition Act is right. The Act has been around for almost a decade. While the CCI does an annual review of merger regulations, it is time to also review and address issues under enforcement such as an AAEC test for abuse of dominance, the concept of relevant turnover in the Act as well as the CCI having benches in Mumbai for ease of doing business, given that Sebi has 19 offices and the CCI has just one,” Nisha Kaur Uberoi, National Competition Head, Trilegal.