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Competition
Bill
The bill
aims to promote and sustain competition in markets
by preventing anti competitive practices and creating
a conducive economic environment. In its Preamble
it states that. "To provide for the establishment
of a Commission, to prevent practices having adverse
effect on competition, to promote and sustain
competition in markets, to protect the interests
of consumers and to ensure freedom of trade carried
on by other participants in markets, in India,
and for matters connected there with or incidental
thereto."
Salient Features
- Competition
Commission of India(CCI) to be established
- Repeal
of MRTP Act, Dissolution of MRTPC
- Competition
Fund to be Created
- Pre-Merger
Notification made optional
- Prohibition
of abuse of dominant position
- Pending
Cases of MRTPC top be transferred to CCI.
- Pending
unfair Trade Practices to be under Consumer
Protection Act, 1986
Bill in Brief
The
salient features of the Bill cover prohibition
of anti- competitive agreements, prohibition of
abuse of dominance, regulation of combinations
(acquisitions, mergers and amalgamations of certain
size); establishment of the Competition Commission
of India and definition of its functions and powers.
The Bill also states that
the CCI may, upon its own knowledge or information
relating to certain "combinations'', enquire
as to whether such a combination has caused or
is likely to cause an appreciable adverse effect
on competition in India. A proviso, however, has
been inserted to stipulate that the Commission
shall not initiate enquiry into certain forms
of acquisitions, merger or amalgamation, or acquiring
of control after the expiry of one year from the
date of which such a combination has taken affect.
In the
case of an acquisition, the regulation of such
a combination would arise where:
(i) the
parties to the acquisition, being the acquirer
and the enterprise, whose control, shares, voting
rights or assets have been acquired or having
acquired jointly have:
- either, in India, the
assets of value of more than Rs 1,000 crore
or turnover more than Rs 3,000 crore
- in India or outside India,
in aggregate, the assets of the value of more
than $500 million or
turnover more than $1,500 million
ii) any group or an enterprise
belonging to such group whose control, shares,
voting rights or assets have been acquired or
being acquired jointly have;
- either, in India, the assets
of value of more than Rs 4,000 crore or turnover
more than Rs 12,000 crore
- in India or outside India,
in aggregate, the assets of the value of more
than $2 billion or turnover more than $6 billion
In the
case of merger or amalgamations, the regulation
of combinations relates to
(i) the enterprise remaining after merger or enterprise
created as a result of amalgamation, as the case
may be, have
- either, in India, the
assets of the value of more than Rs 1,000 crore
or turnover more than Rs 3,000 crore
- in India or outside India,
in aggregate, the assets of the value of more
than $500 million or turnover more than $1,500
million
(ii) the group, or its constituent
enterprise remaining after merger or the enterprise
created as a result of the amalgamation, as the
case may be, have
- either, in India, the
assets of Rs 4,000 crore or turnover more than
Rs 12,000 crore
- in India or outside India,
the assets of the value of more than $2 billion
or turnover more than $6 billion .
The Bill also seeks to create
a fund to be called the 'Competition Fund'. The
grants given by the Central Government, costs realized
by the Commission, and the application fee charged
will be credited to the fund.
On the composition of the
CCI, the Bill states that the Commission will
consist of a chairperson and not less than two
and not more than 10 other members to be appointed
by the Central Government. In the first year of
its establishment the Central Government shall
appoint the chairperson and the member.
The chairperson and the every
other member shall be appointed by the Central
Government on the recommendation of the selection
committee consisting of the Chief Justice of India
or his nominee (chairperson), the Union Finance
Minister, Union Minister in-charge of the Department
dealing with this Act, RBI Governor and Cabinet
Secretary (members)
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