The Competition (Amendment) Act, 2023 is a legislative provision that significantly amends the Competition Act, 2002, which is India's primary competition law. The original Act was enacted to replace the Monopolies and Restrictive Trade Practices Act, 1969, with the goal of promoting and sustaining market competition, protecting consumer interests, and ensuring freedom of trade. The 2023 Amendment was introduced to modernize the law to reflect the dynamics of the digital and globalized economy, receiving the President's assent on April 11, 2023.
The Act works by introducing several key provisions that change the mechanism of competition regulation. A major change is the establishment of a Deal Value Threshold (DVT) under Section 5 for combinations (mergers and acquisitions). Previously, scrutiny was based on asset size or turnover; now, any transaction exceeding INR 2,000 crore must be notified to the Competition Commission of India (CCI) if the acquired enterprise has "substantial business operations in India". This addresses high-value transactions in digital markets where the target may lack traditional assets.
The amendment also changes the definition of "control" in Section 5 to formally include the ability to exercise "material influence" over an entity's management or strategic commercial decisions. Furthermore, it expands the scope of anti-competitive agreements under Section 3 to include "hub-and-spoke" cartels, bringing in entities that participate in the furtherance of such agreements even if they are not engaged in identical trade. The timeline for the CCI to approve combinations has been reduced from 210 days to 150 days.
A significant change in enforcement is the provision that penalties for anti-competitive conduct can now be imposed based on an enterprise's global turnover derived from all products and services, a legislative overruling of the Supreme Court's "relevant turnover" ratio in Excel Crop Care Ltd. v. CCI. The Act also introduces a mechanism for enterprises to offer settlements and commitments to the CCI for abuse of dominance or anti-competitive agreements, excluding cartel offenses.