The government has introduced the Competition Amendment bill with changes which could have massive implications for big tech companies. The bill was introduced in Lok Sabha after factoring in recommendations of the parliament committee on finance. The bill proposes to levy a penalty on global turnover instead of domestic turnover in case of violations. The government plans to move the bill for discussion and passage in this session.

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Speaking to CNBC-TV18, Dhanendra Kumar former CCI Chairman highlighted that the consideration of global turnover will have implications on digital enterprises, especially big tech companies. In a digital economy that is interconnected globally, transactions often go beyond domestic frontiers, making it important to take global turnovers into account.

“It is a very important change undoubtedly, and this would definitely have lot of implications for digital enterprises, particularly the so called big-tech, when their entire turnover is being considered.”

He added, “It is probably relevant to look at the global turnover, although much can be said on both sides. The Supreme Court, for example, in the case of Excel Crop case, had held that the penalty should be levied on the relevant turnover. But it's for Parliament (to look at it). If the government has brought up these amendments, and there are logical and very valid reasons, in the case of internet economy, and the platform-based economy, the digital one, the whole thing is considered. One thing must be kept in mind that India is very important in terms of digital economy and for G20 also, this is one of the focus areas that we are talking about.”

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The new law, once passed by Parliament would regulate mergers and acquisitions, combination deals, FDI proposals and corporate insolvency resolution cases would have to be decided within 150 days as opposed to 210 days currently.

The former CCI chairman welcomed the investor-friendly amendment that reduces the M&A time-frame to 150 days. India ranks very high in terms of ease of doing business, and more than 50 cases have already been approved under the green channel route for expeditious approval of straightforward M&A cases.

He said, “I think it is a very, very positive and forward looking move. Under the green channel route, which has been globally appreciated, more than 50 cases have been approved, and enterprises find it very convenient. Also, they have encouraged companies to file their M&A cases directly. So I feel that reducing the timeline to 150 days and this 30 days is a very positive and forward looking move to encourage investments into India.”

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Under the Competition (Amendment) Bill, 2022 that was introduced in the Parliament on August 5, the corporate affairs ministry has proposed reducing the timeline for CCI to form a prima-facie opinion on a case to 20 days from 30 days.

Kumar praised India's competition law, hailing it as one of the best acts in the world. Section 15 of the Competition Act provides that no decision of the CCI will be void due to a deficiency in the quorum. The waiver of quorum, according to Kumar, is a judicious way of handling cases.

He is confident that the government is considering filling the vacancy of the CCI chairman post.

(Edited by : Pradeep John)

First Published:Feb 9, 2023 6:50 PM IST