Govt agrees to allow settlement scheme for cartels in Competition Bill
New Delhi, January 29, 2023
The proposed law however is not clear still on whether an application for settlements and commitments requires an admission of guilt
In a big relief to industry, the government has accepted the parliamentary panel’s recommendation to allow cartels to avail the settlement scheme under the Competition Amendment Bill, according to government sources.
The proposed Bill seeks to introduce a clause for settlement and commitment which offers any enterprise against which an inquiry is initiated to file an application for settlement. The parliamentary committee on finance had suggested the inclusion of cartels in the scope of settlements “as a pragmatic recourse to the whole process”.
“A settlement provision for cartels on a case-by-case basis may be for the courts to decide. It does not require emphasis that any matter, cartels or otherwise, which reaches the settlement stage, would have been an anti-competitive one,” the committee's report said.
At present, section 46 of the Competition Act provides for leniency to parties involved in a cartel. The competition law review committee had not recommended the inclusion of cartels as they by nature are anti-competitive.
The Jayant Sinha-led committee, in its report tabled on December 13, 2022, had however noted that, “It does not require emphasis that any matter, cartels or otherwise, that reaches settlement stage, would have been an anti-competitive one.”
The proposed law however is not clear still on whether an application for settlements and commitments requires an admission of guilt.
The CCI is in the process of finalising its probe against the cement cartels. Once Parliament approves the Bill, a legal expert said the cement cartel may be able to use the settlement scheme.
While accepting some of the standing committee’s recommendations, the government has rejected the introduction of the concept of "mandatory effects based analysis" to the Competition Amendment Bill. The panel had said that the CCI should study different factors such as impact on consumers, innovation and competition before adjudicating a conduct as violative of the competition law.
The competition amendment bill is expected to be tabled in the parliament during the upcoming Budget session starting on January 31.
Other changes sought by the standing committee included review of the deal value threshold every year instead of every two years. The committee had also recommended against shortening merger review timelines as it can be burdensome for an already understaffed commission.
It had also said that the ministry of corporate affairs had not put forth any strong argument as to why IPR cannot be used as a defence against abuse of dominant position. It said, “... it would be more desirable for CCI to specifically take into consideration the rights that a party may have in relation to reasonable exercise of its IPR when dealing with abuse of dominance cases to avoid uncertainty.”
[The Business Standard]
