The Lok Sabha approved the Competition (Amendment) Bill, 2023, which could present new hurdles for global technology firms.
Changes Resulting from the Amendment
(1) Penal powers to CCI
- It empowers the CCI to penalise entities discovered to be engaging in anti-competitive behaviour based on their worldwide turnover, rather than just their annual domestic turnover, as was previously the case.
(2) Turnover Definition
- The meaning of “turnover” has been a hotly debated topic in the world of competition law.
- Previously, the Supreme Court established the criteria for determining turnover in competition law violations, ruling that it should be “relevant turnover,” i.e., turnover derived from the sale of products or services.
(3) Mergers and acquisition
- In mergers and acquisitions worth more than Rs 2,000 crore, the CCI will have greater power.
- Furthermore, the time limit for merger and acquisition approval has been decreased from 210 days to 150 days.
The Effect on Technology Companies
- While the provision on global turnover will not be limited to technology companies, they are likely to be the most impacted due to the nature of their business, which works across borders.
- Typically, revenue from these businesses’ India operations is much lower than revenue from other regions, such as the United States and Europe.
Source: https://www.hindustantimes.com/india-news/lok-sabha-passes-competition-amendment-bill-2022-101680115565250.html#:~:text=New%20Delhi%3A%20The%20Lok%20Sabha,entities%20like%20Big%20Tech%20firms.