Business
Amended Anti-Trust Law Imposes Higher Penalty On Violations, Seeks Partial Deposit Ahead Of Appeal
Competition Commission of India.
India's amended antitrust law will empower the regulator to levy hefty penalties and require companies to pay a portion of the fines before appealing an order.
The amendments to the Competition Act of 2002, as outlined in the new Competition (Amendment) Bill, passed in the Parliament earlier this month.
The amended Act permits Competition Commission of India to impose penalties for anti-competitive practices and abuse of dominance based on a firm's global turnover.
Earlier, up to 10 per cent penalty was levied on the turnover of the affected business in India.
Additionally, any entity wishing to challenge a CCI order must pay a deposit equivalent to 25 per cent of the penalty, according to the act.
The partial payment of penalty provision will affect global companies more and may cover revenue from products and services not under anti-competitive conduct.
Until now, no deposit amount had been codified in India though courts have often directed similar actions.
Among other jurisdictions, the European Union requires full penalty payment, however, admission of appeal is not dependent on it.
India's competition regulator has not issued any penalty guidelines yet.
Before filing an appeal, India's income tax law too mandates a deposit of 20 per cent.
The changes in the competition act also aim to expand the scope of anti-competitive agreements, streamline the approval process for mergers and acquisitions (M&A), and reduce litigations.
The modified law also amends the type of punishment for specific offences, replacing fines with penalties. Furthermore, the law mandates an increase in penalties for acts of anti-competitive and anti-consumer practices, raising the amount from Rs 10 million to Rs 50 million.
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