The Competition Amendment Bill 2022
Context:
The long-awaited Bill to amend the Competition Act, 2002, was finally tabled in the Lok Sabha recently.
Relevance:
GS II: Government policies and Interventions
Dimensions of the Article:
- About Indian Competition Act
- About Competition (Amendment) Bill, 2022
- What is gun-jumping?
- What next?
About Indian Competition Act:
- The Indian Competition Act was passed in 2002, but it came into effect only seven years later.
- The Competition Commission primarily pursues three issues of anti-competitive practices in the market: anti-competitive agreements, abuse of dominance and combinations.
- As the dynamics of the market changes rapidly due to technological advancements, artificial intelligence, and the increasing importance of factors other than price, amendments became necessary to sustain and promote market competition.
- Therefore, a review committee was established in 2019 which proposed several major amendments.
About Competition (Amendment) Bill, 2022
Regulation of combinations based on transaction value:
- The Act prohibits any person or enterprise from entering into a combination which may cause an appreciable adverse effect on competition.
- Combinations imply mergers, acquisitions, or amalgamation of enterprises.
- The prohibition applies to transactions where parties involved have:
- Cumulative assets of more than Rs 1,000 crore, or
- Cumulative turnover of more than Rs 3,000 crore, subject to certain other conditions.
- The Bill expands the definition of combinations to include transactions with a value above Rs 2,000 crore.
Definition of control for classification of combination:
- For classification of combinations, the Act defines control as control over the affairs or management by one or more enterprises over another enterprise or group.
- The Bill modifies the definition of control as the ability to exercise material influence over the management, affairs, or strategic commercial decisions.
Time limit for approval of combinations:
- The Act specifies that any combination shall not come into effect until the CCI has passed an order or 210 days have passed from the day when an application for approval was filed, whichever is earlier.
- The Bill reduces the time limit in the latter case to 150 days.
Anti-competitive agreements:
- Under the Act, anti-competitive agreements include any agreement related to production, supply, storage, or control of goods or services, which can cause an appreciable adverse effect on competition in India.
- Any agreement between enterprises or persons, engaged in identical or similar businesses, will have such adverse effect on competition if it meets certain criteria.
- These include:
- Directly or indirectly determining purchase or sale prices
- Controlling production, supply, markets, or provision of services,
- Directly or indirectly leading to collusive bidding.
- The Bill adds that enterprises or persons not engaged in identical or similar businesses shall be presumed to be part of such agreements, if they actively participate in the furtherance of such agreements.
Settlement and Commitment in anticompetitive proceedings:
- Under the Act, CCI may initiate proceedings against enterprises on grounds of:
- Entering into anti-competitive agreements,
- Abuse of dominant position.
- Abuse of dominant position includes:
- Discriminatory conditions in the purchase or sale of goods or services
- Restricting production of goods or services
- Indulging in practices leading to the denial of market access.
- The Bill permits CCI to close inquiry proceedings if the enterprise offers:
- Settlement (may involve payment)
- Commitments (may be structural or behavioural in nature).
- The manner and implementation of settlement and commitment may be specified by CCI through regulations.
Relevant product market:
- The Act defines relevant product market as products and services which are considered substitutable by the consumer.
- The Bill widens this to include the production or supply of products and services considered substitutable by the suppliers.
Appointment of Director General:
- The Act empowers the central government to appoint a Director General to CCI. The Director General assists in conducting inquiries into contraventions of any provisions of the Act.
- The Bill amends this to empower the CCI to appoint the Director General, with prior approval of the government.
Qualification of members of CCI:
- As per the Act, the chairperson and members of CCI should have professional experience of at least 15 years in fields such as:
- Economics,
- Competition matters,
- Law,
- Management,
- Business
- The Bill expands this to include experience in the field of technology.
Decriminalisation of certain offences:
- The Bill changes the nature of punishment for certain offences from imposition of fine to penalty.
- These offences include failure to comply with orders of CCI and directions of Director General with regard to anti-competitive agreements and abuse of dominant position.
Major change in dealing with new-age market combinations
- Any acquisition, merger or amalgamation may constitute a combination.
- Section 5 currently says parties indulging in merger, acquisition, or amalgamation need to notify the Commission of the combination only on the basis of ‘asset’ or ‘turnover’.
- The new Bill proposes to add a ‘deal value’ threshold.
- It will be mandatory to notify the Competition Commission of any transaction with a deal value in excess of ₹2,000 crore and if either of the parties has ‘substantial business operations in India’.
What is gun-jumping?
- Parties should not go ahead with a combination prior to its approval.
- If the combining parties close a notified transaction before the approval, or have consummated a reportable transaction without bringing it to the Commission’s knowledge, it is seen as gun-jumping.
- The penalty for gun-jumping was a total of 1% of the asset or turnover. This is now proposed to be 1% of the deal value.
What next?
- By implementing these amendments, the Commission should be better equipped to handle certain aspects of the new-age market and transform its functioning to be more robust.
- The proposed amendments are undoubtedly needed; however, these are heavily dependent on regulations that will be notified by the Commission later.
- These regulations will influence the proposals. Also, the government needs to recognise that market dynamics change constantly, so it is necessary to update laws regularly.
African Rhinoceros
Context:
Recently, a report has stated that Rhino poaching rates in Africa declined to 2.3% in 2021 from 3.9% in 2018.
- At least 2,707 rhinos were poached in Africa between 2018 and 2021, including critically endangered black rhino and near threatened white rhino.
Relevance:
GS II: Environment and Ecology
Dimensions of the Article:
- Key findings of the Report
- About Black Rhino & White Rhino
Key findings of the Report
- The African and Asian Rhino Specialist Group (AfRSG), the Species Survival Commission (SSC), the International Union for Conservation of Nature (IUCN), and TRAFFIC put together the study.
- The thirteen nations that make up the rhino’s range that the African Rhino Specialist Group (AfRSG) gathered data from are Botswana, Chad, Eswatini, Kenya, Malawi, Mozambique, Namibia, Rwanda, South Africa, Tanzania, Uganda, Zambia, and Zimbabwe.
- From a peak of 5.3% of the total population in 2015 to 2.3% in 2021, rhinoceros were poached at a lower rate in Africa.
- 90% of all documented cases originated in South Africa, mostly affecting white rhinos in Kruger National Park.
- While there was no poaching in Kenya in 2020, South Africa lost 394 rhinoceros to the practise.
About Black Rhino & White Rhino:
:
Black Rhino:
- Black rhinos are the smaller of the two African Rhino species.
- The most notable difference between white and black rhinos is their hooked upper lip.
- While White Rhino has a square lip.
- Black rhinos are browsers rather than grazers, and their pointed lip helps them feed on leaves from bushes and trees.
- They have two horns, and occasionally a third, small posterior horn.
Habitat:
Semi-Desert Savannah, Woodlands, Forests, Wetlands.
Protection Status:
- IUCN Red List: Critically Endangered
- CITES: Appendix I
- Wildlife Protection Act 1972: N/A
White Rhino:
- White rhinos are the second largest land mammal after the elephant.
- White rhinos are also known as the square-lipped rhinoceros due to their square (not pointed) upper lip.
- Two genetically different subspecies exist, the northern and southern white rhino and are found in two different regions in Africa.
Habitat:
Long and short grass savanna areas in grasslands.
Protection Status:
- IUCN Red List: Near Threatened
- CITES: Appendix I & Appendix II
- Wildlife Protection Act 1972: N/A
New Norms to Invest Overseas
Context:
Recently, The Ministry of Finance noticed new norms making it easier for domestic corporates to invest abroad, while making it tougher for loan defaulters and those facing a probe by investigative agencies to invest in overseas entities.
Relevance:
GS III: Indian Economy
Dimensions of the Article:
- Key Highlights of the New Rules
- Significance of the News rules:
Key Highlights of the New Rules
Reserve Bank of India:
- The Reserve Bank of India (RBI) will be in charge of enforcing the Overseas Investment Rules and Regulations, which were notified under the Foreign Exchange Management Act.
- These rules will supersede all current regulations relating to foreign investments as well as the purchase and sale of real estate outside of India.
No-Objection Certificate
- Anyone who has a bank account that is considered a non-performing asset, is identified as a wilful defaulter by any bank, is under investigation by a financial sector regulator, the Enforcement Directorate (ED), or the Central Board of Investigation must obtain a No-Objection Certificate (NOC).
- Additionally, without the express permission of the central bank, no Indian resident will be allowed to invest in foreign companies involved in the real estate industry, gambling of any kind, or the trading of financial goods pegged to the Indian rupee.
Sixty Day Timeline:
- However, it may be assumed that the lenders and any relevant regulatory body or investigative agency have no objections to the proposed transaction if they fail to provide the NOC within sixty days of receiving an application.
Significance of the News rules:
- The updated regulatory framework for foreign investment offers simplification of the current framework and has been adjusted to reflect the current dynamics of business and the economy.
- A lot of clarity has been added to the terms “overseas direct investment” and “overseas portfolio investment,” and “many overseas investment-related activities that were previously under the approval route are now under the automatic route, considerably improving convenience of doing business.”
Vannuramma
Context:
The fort of legendry Vannuramma in Nallamala forest in the present day Mydukur mandal of Kadapa district is trending due to its rundown condition.
Relevance:
GS I: History
Dimensions of the Article:
- Who was Vannuramma?
- Her death
Who was Vannuramma?
- Between 1781 and 1796, Vannuramma controlled five “Durgams” (sub fiefdoms), with Sakarlapadu serving as her administrative centre. She was reportedly born in Pathimadugu Rekulakunta, which is currently in the Kadapa district, and she wed Veerneni Chinna Narasimha Naidu in 1764.
- The family often made prayers at Kalyanadurgam’s Vannuru Swamy temple in the Anantapur area. As a result, Vannuramma received her name since it was thought that she was a gift from the gods when she was born.
- The Matli kings and Kadapa Nawabs shivered at the mere mention of the name “Vannuramma.”
- Vannuramma’s family was attacked by other Polegars and forced to flee Thippireddypalle, where they took refuge in Chagalamarri fort, where they remained for eight years before her husband passed away in 1780.
- Of all the Polegars (local chieftains) who had ruled the regional territories of Rayalaseema before the arrival of the British, the lone woman ruler remains forgotten from the pages of history.
- When the Mysore Sultan Hyder Ali’s disciple Meeru Saheb and the Matli king Appayya Raju engaged in battle, invaded Sakerlapadu Durgam, and stole the possessions of residents, Vannuramma handled the sword.
- She assembled her troops, waged war, and annexed the region back into her control in 1781
Her death
- Even the Golconda Nawabs, through their Kadapa henchman Khadarvali Khan, strove in vain to subjugate her.
- At that point, they came up with a scheme to seduce her adoptive son and had her detained on false grounds.
- Treason charges were brought against the innocent Vannuramma when she went to the Matli king’s court to show her innocence.
- The Nawabs imprisoned her and gave her the cruel penalty of “Korthi,” which involves forcing a person to sit on a pointed tree stump and being abandoned to perish.
- Vannuramma died in full public view in the year 1718 of Salivahana Saka, which translates to August 16, 1796, i.e., 226 years back.
