Competition Commission of India (CCI) will soon come out with a new set of merger regulations, giving effect to competition law amendments enacted last year, its chairperson Ravneet Kaur said on Monday.
Kaur said CCI has been engaged in the last one year in preparing a regulatory framework under the Competition (Amendment) Act, 2023, which brought in global best practices for dealing with the emerging challenges to competition in the market. The new regulations issued include those relating to negotiated settlements with businesses on anti-competitive practices, regulating mergers and acquisitions based on the deal value and an expanded scheme on leniency meant to encourage cartels to come clean. The next in the pipeline is merger regulations. “We are now in the process of notifying the new merger control regulations,” Kaur added.
A person informed about the watchdog’s work explained that the proposed regulations will clarify how to assess the value of a transaction for the purpose of deciding whether it requires CCI approval or not. The regulations will also explain how CCI will speed up merger regulation by cutting down the maximum allowed time for a decision on a transaction from 210 days to 150 days, a provision that was also introduced in the law last year, explained the person, who spoke on condition of anonymity.
The regulations are expected after the model code of conduct is lifted after the polls as the government has to notify certain provisions of the amended law. As per amendments introduced to the competition law last year, CCI approval is needed for any transaction if the value of it is more than ₹2,000 crore, even if the deal does not otherwise meet the asset and sales threshold for merger regulations. The amendments also said CCI has to make a first impression of a deal within 30 days, failing which it will be deemed to be approved.
Kaur also explained that the emergence of new-age markets has led to a revamp in competition laws around the world, as digital economy adds to the complexities. “In fact, the digital economy has challenged traditional competition law frameworks worldwide. Countries and economic blocks have responded by either adapting domestic lows or introducing new regulations specifically targeting digital markets. There has been a marked increase in scrutiny of digital technology companies around the world,” Kaur said.
In line with these, the ministry of corporate affairs is now working on a Digital Competition Bill that would bring in a set of dos and don’ts for systemically important digital economy firms. Public consultation on a draft bill is over and inter-ministerial consultations will happen over the next few months before it is taken to parliament.
Kaur said that CCI is also initiating a market study on artificial intelligence. “The transformative power of AI has significant pro-competition potential but at the same time there may be competition concerns emanating from the use of AI. The study will be a knowledge building exercise to develop an in-depth understanding of the emerging competition landscape. Kaur said digital markets need to be regulated to prevent “a winner-takes-all scenario where one or a few companies may dominate the market.” Kaur also said that companies gathering large amounts of data could pose concerns around competition.
“This raises concern about data dominance, where control over large datasets can create insurmountable barriers to entry,” she said.
Attorney general for India R. Venkataramani, who was also present at an event to mark the 15th foundation day of the Competition Commission of India, said it is old news that data or the internet is the new currency. “By now, you have seen the action taken by a number of competition regulators worldwide against the gatekeepers of data,” he said. The current debate around this issue in India is about the draft Digital Competition Bill, where the CCI has to decide between two methods of regulatory action – investigation and sanctions, or bans and prohibitive rules, said Venkataramani.
