Draft Competition (Amendment) Bill, 2020

Feb 25, 2020 | by Avantis RegTech Legal Research Team


Commercial Compliance

The Ministry of Corporate Affairs (MCA) on February 20, 2020, invites public comments on the draft Competition (Amendment) Bill, 2020. The Competition (Amendment) Bill, 2020 has been drafted for carrying out amendments in the Competition Act, 2002.

The draft amendments seek to give monetary and penal powers to the director general for investigation under the CCI and empower to send to prison for up to six month or impose a fine of Rupees 1 crore in case of refusal to produce any document. The draft has introduced new clauses on ‘commitment’ and ‘settlement’. The enabling clause will allow those found in contravention of the competition law to commit to correct their ways to avoid action even before investigation is completed. Even in cases where investigation is over, evidence has been found, and the adjudicating process has started, the companies can still enter a settlement. The companies will have to pay a certain amount as fine and avoid legal proceedings after ensuring that any anti-competitive practice will be corrected.

The draft amendment also provides clarity to hub and spoke cartels. A hub and spoke cartel is basically an arrangement between companies where a dominant player, called hub, is wooed by other firms, called spoke, to destroy competition by increasing or lowering prices.

The draft also seeks to expand the composition of the CCI by including part-time members in the Commission.

The copy of the draft Competition (Amendment) Bill, 2020 may be accessed at http://feedapp.mca.gov.in/. The comments or suggestions, if any, may be submitted online by end of business hours on March 06, 2020.


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