The government has made it mandatory to deposit 25% of the fine imposed by the Competition Commission of India (CCI), prior to filing an appeal against its order, before the National Company Law Appellate Tribunal.

Also, submission of false statements will attract a higher penalty of Rs 5 crore, versus Rs 1 crore earlier. These and a few other provisions under the Competition Amendment Act 2023 have been notified by the Ministry of corporate affairs.

The Act, which was passed by Parliament in the Budget session, took effect on April 11, and the new rules, on May 18.

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With the latest set of provisions, India’s competition law is now equipped to deal with hub-and-spoke cartels, or anti-competitive arrangements, where businesses collude to distort market with the help of a common agent operating at a different level.

However, provisions relating to the deal value threshold (DVT), the new criterion for regulation of mergers and acquisitions (combinations), have not been notified. The amended Act provides for stiff penalties based on the global turnover of an enterprise, rather than the turnover of the goods and services that are the subject matter of the contravention. However, this also has not been notified yet. The DVT has been introduced in the Act, in recognition of the fact that the existing ‘assets & turnover’ criteria may not suffice to preempt competition infractions in the digital space via M&As.

Under the new amendments, the scope of anti-competitive agreements has been widened to include agreements other than vertical and horizontal agreements, which are anti-competitive in nature such as hub-and-spoke cartels.

Action against key competitive law violations such as abuse of dominance and anti-competitive arrangements will be subject to a limitation period of three years from the date of cause of action.

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Rachit Sharma, DGM, Taxmann, noted that the inclusion of the mandatory requirement of a deposit of 25% of the amount levied by CCI prior to filing an appeal before the NCLT would discourage unnecessary appeals is likely to bring changes in the way the appeal process is approached. It may have a significant impact on the efficiency of the competition law cases in India.

GR Bhatia, Partner, Luthra and Luthra Law Offices India, said the provisions are a welcome step, and added that parties should implement competition law compliance programs in order to steer away from the CCI’s scrutiny.

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