The central government is set to introduce the Competition Amendment Bill before Parliament during the Winter session, according to government officials. Key changes in the Bill include vesting the power of the appointment of the head of the investigative arm of the Competition Commission of India (CCI) with the regulator itself, as well as a new “settlement” and “commitment” mechanisms to allow for quicker disposal of cases.
The head of the investigative arm of the CCI, the Director-General (DG), is currently appointed by the Centre. Industry bodies and experts had opposed the proposal to give this authority to the competition watchdog, noting that such a move may compromise the independence of the DG.
“We are hopeful that we will be able to place the Bill before Parliament in the winter session,” said a government official. The official added that the amendment to transfer the power to appoint the DG would be retained in the final Bill, noting that the investigative arm of competition regulators in other jurisdictions was also overseen by the regulator.
Experts noted that their primary concern was the maintenance of the functional autonomy of the DG. “As the power of appointment is currently with the central government, this gives the DG functional autonomy. I hope that by giving the power of appointment to the CCI the functional autonomy presently enjoyed by the DG office is not diluted, “ said MM Sharma, head of competition law practice at Vaish Associates.
An expert, who requested to remain anonymous, said that the comparison of the CCI with other jurisdictions was not appropriate as while the investigative arms of jurisdictions such as the European Union do operate under the regulator, they have been seen to be “fiercely independent” which is not the case with the DG of CCI.
“It seems that even now the investigations by the DG are influenced by the prima facie view taken by the CCI” said the expert, adding that an investigative arm like the DG should be separate from an adjudicatory arm such as the Competition Commission.
The Internet and Mobile Association of India (IAMAI) had also said in comments on the draft Bill that “the suggested power for the Competition Commission of India to appoint the Director General under the proposed Bill risks undermining the set rules ensuring fair and independent investigation under the Competition Act, 2002”.
Another key amendment in the proposed Bill is the inclusion of the settlement and commitment mechanism for quicker disposal of cases. The settlement mechanism would allow a firm which may have engaged in anti-competitive conduct to reach an agreement with the CCI to dispose of a case after the DG submits a report indicating competition law violations. The company would be required to cease anti-competitive conduct and may be required to pay a fine decided by the CCI.
Under the commitment mechanism, parties accused of anti-competitive conduct may seek to settle a case before the DG of the CCI begins investigation by committing to cease anti-competitive conduct and paying a fine decided by the CCI.
The move is expected to speed up the disposal of cases. Notably, cases resolved under these mechanisms will not be open to appeals. The CCI may, however, revoke orders of settlement or commitment if it concludes that parties have not made adequate disclosures at the time of the agreement or if there are material changes to the facts of the case.
Concerns on ‘autonomy’
Industry bodies and experts had opposed the proposal to give the authority to appoint the Director General of the investigative arm of the Competition Commission of India to the watchdog itself, noting that such a move may compromise the autonomy of the Director General
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