The Competition Commission of India (CCI) has been granted expanded jurisdiction to levy fines on companies for violations, based on their global turnover. The amended competition norms, notified by the government, empower the CCI to impose penalties considering a company’s global turnover, rather than solely focusing on turnover from specific business segments where violations occur.
Notification of Amended Provisions
The corporate affairs ministry has officially notified the provisions amended under the Competition Act, effective from March 6. According to Vaibhav Choukse, Partner and Head of Competition Law at JSA Advocates and Solicitors, this amendment grants the CCI authority to levy penalties based on a company’s global turnover derived from all its products and services.
Implications and Considerations
The amended regulations are expected to have significant implications, particularly for multi-product companies and those with global operations. It may lead to perceived disparities between domestic companies and those with global reach, as well as between multi-product and single-product companies.
In response to the heightened penalty potential, companies, especially prominent tech giants, may be incentivized to explore settlement options or commit to remedial actions in cases of abuse or vertical restraints. Similarly, in cartel cases, leniency measures may be pursued to mitigate potential fines.
Clarification and Guidance
As part of the amendment, the CCI is mandated to release detailed penalty guidelines to offer clarity on the methodology for calculating fines. These guidelines are anticipated to be published soon, providing stakeholders with clear parameters for compliance and enforcement.
The introduction of these amendments reflects an effort to strengthen competition regulation in India and align it with global standards, ensuring fair practices and fostering a competitive business environment.
