Competition Amendment Act 2023: MCA keeps power to appoint DG with itself, withholds notification of key provision

The Ministry of Corporate Affairs (MCA) has withheld notification of a key provision of the Competition Amendment Act 2023, which vested the power to appoint a Director General with the Competition Commission of India (CCI). 

The term of the present DG is expiring next month, and as per government sources, MCA will appoint the next DG before notifying the key provision. 

Presently, the power to appoint DG lies with MCA and the recent amendments have transferred this power to CCI. It may be recalled that President Droupadi Murmu had given her assent to the Competition Amendment Act 2023 on April 11.

Earlier, while notifying some provisions of the Competition Amendment Act 2023 on May 18, MCA also put provisions on hold , which provided higher penalties upon big tech for their anti-competitive behaviour. As per the amendments, CCI can now impose penalties upon companies based on their global turnover derived from all products and services. Currently, CCI can levy a penalty only upon “relevant turnover”, as per a Supreme Court ruling in the Excel Crop case. The verdict  now stands overturned in light of the amendments.

One of the major substantive provisions which have come into effect on May 18 is the hub and spoke cartels, which cover hybrid anti-competitive agreements and facilitators/ non-participants who had ‘intended to participate’ in the cartel. 

The penalty for false statements/omissions has now been increased from ₹1 crore to ₹5 crore to strengthen CCI’s power in ensuring companies furnish true, full and adequate disclosures in their submissions. 

Further, filing appeals against CCI’s orders before the appellate tribunal has become more onerous as erring companies will have to pay 25 per cent of the penalty amount for the appeal to be admitted for hearing. 

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