Govt notifies amendments in competition law related to CCI probe procedure

The government has notified a provision in the amended competition law related to investigation procedure whereby regulator CCI can issue show cause notices to parties concerned as well as grant them time to respond before passing a final order.

The Competition Act, implemented by the corporate affairs ministry, was amended in April 2023 and subsequently, various provisions as well as related regulations have been notified.

In a notification, the ministry said "provisions of clause (f) of section 19 of the said Act shall come into force," from September 19.

This section pertains to the procedure for investigation by the Competition Commission of India (CCI).

 

Upon completion of the investigation, the regulator can pass an order closing the matter or pass an order under Section 27. Under Section 27, CCI can penalise entities for anti-competitive practices.

"Provided that before passing such order, the Commission shall issue a show cause notice indicating the contraventions alleged to have been committed and such other details as may be specified by regulations and give a reasonable opportunity of being heard to the parties concerned," as per Section 19 (f) notified on September 19.

CCI came out with the enabling regulations in this regard as part of the general regulations issued on September 17.

With respect to the government's latest notification of Section 19 (f), Vaibhav Choukse, Partner (Competition Law) at law firm JSA, said the amendment will bring more transparency and procedural fairness in CCI proceedings.

He also said the amendment plugs the enforcement gap in Section 26 which lay down the procedure that CCI must follow while entertaining an information/ complaint till its final disposal, including the Director General's investigation.

Under the old provision, if the DG finds a contravention, the only recourse for CCI is further inquiry. It did not expressly empower the regulator to close the case even if CCI disagreed with the findings of the DG.

DG is the investigation arm of the regulator.

"Similarly, where the DG finds no contravention and post consideration of objections or suggestions of parties, CCI is of the opinion that further investigation is required, it may direct further investigation. However, it does not empower CCI to pass a final order post such investigation or inquiry.

"Therefore, with this amendment, CCI is empowered to pass appropriate orders in all cases," he said.