This article is written by  Shivam pursuing Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions). This article discusses the various nuances of the Competition (Amendment) Act, 2023.

It has been published by Rachit Garg.


The Competition Act, 2002 (“the Act”) is a legislation enacted by the Central government to promote and sustain market competition, protect consumers’ interests, and ensure freedom of trade and commerce. It aims to prevent anti-competitive practices, such as price-fixing, bid-rigging, and abuse of dominant position by companies.

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In 2023, the Competition Act underwent an amendment to strengthen the provisions further and address emerging challenges in the market. This article will delve into the recent amendments to the Competition Act, 2002 and analyse their impact on the Indian economy and competition landscape. We will also explore the implications of the amendments for businesses, consumers, and other stakeholders.

Merger Control

Deal Value Threshold

The new amendment to Section 5 of the Act requires that for deals whose total value of the transaction exceeds INR 2000 cr and additionally the target enterprises (the acquisition of any control, shares, voting rights or assets of an enterprise, merger or amalgamation) has substantial business operations in India (SBOI to be specified by the further rules and regulations) will now qualify for the definition of the Combinations under Section 5 and the concerned parties to the deal have to file a notice to the CCI (“commission”) for approval of the deal according to Section 6 (2).

Change in definition of control

Previously the definition of control included only the control of the affairs or management of enterprises by another enterprises/group or the control of the affairs or management of the group by another group/enterprises.

But now, the definition will include the ability of one enterprise or group to exercise material influence in any manner over the management or affairs of another enterprise or group. This amendment has lowered the definition of control to material influence. Therefore the deals having a material influence on the management or the affairs of other entities can now invite scrutiny of the commission.

Value of the assets, turnover, and transaction where the whole enterprise is not involved in the transaction

Vide newly inserted Explanation (f) to Section 5, when a portion of an enterprise or division or business is being acquired, taken control of, merged or amalgamated with another enterprise, then the value of the assets, turnover and value of the transaction of the portion, division, or business shall be the relevant assets or turnover or relevant value of the transaction for the purpose of Section 5.

Timeline for the approval of the merger reduced

Time to file notice to commission

If any person or enterprise proposes to enter into a combination, then notice to the commission after the board of director’s approval of the merger/amalgamation or the execution of any agreement for acquisition (as the case may be) the previous restriction to file a notice to commission within thirty days of such approval or execution is omitted. Now the notice can be filed by the concerned parties before the consummation of the combination.

Reduction of approval period

The time period for the approval of the combination by the commission was reduced by the amendment Act from 210 days to 150 days. In other words, if the commission does not take any action on the notice of the combination submitted to it by the party concerned under Section 6(2) of the Act, then the combination is deemed to be approved.

Limiting the time for forming prima facie opinion

By introducing Section 29(1B), the time for forming the prima facie opinion on the notice received by the commission under Section 6(2) from the person or enterprises which proposes to enter into a combination is limited to 30 days. After that, the combination is deemed to be approved.

Reduction of the time to issue show cause notice to parties involved in combination

The time period to issue show cause notice to the parties involved in the combination, which in the opinion of the commission causes adverse effects on the competition, has been reduced from 30 days to 15 days.

Dilution of standstill obligation for open market purchases

Previously the parties to a transaction involving the purchase on the stock market which breached certain monetary thresholds provided in Section 5 required to notify the commission before consummation of the transaction for its approval. After the amendment, the standstill obligation is diluted for the acquisition which involved i) open offer; ii) an acquisition of convertible shares or securities on a stock market.

Now, the notice has to be filed with the commission after coming into effect of the transaction and the acquirer cannot exercise any ownership rights including voting rights and receipt of dividends, etc. unless and until the commission approves the acquisition according to the provision Section 6(2A).

Increased Penalty for False Statements

By amending Section 44 of the Act the maximum limit of penalty for giving false statements or omission to furnish information knowingly increased to 5cr from the previous penalty of 1cr.

Antitrust enforcement

Introduction of Settlement and Commitments

This is the most significant and important amendment by introducing Section 48A and Section 48B, which talks about the Settlement and Commitments in case of Vertical agreements and Abuse of Dominance cases. The parties investigated by the Commission for Abuse of Dominance and for Vertical Agreement causing an Appreciable Adverse Effect on the Competition (“AAEC”) can settle their dispute before the commission and put an end to the investigation by submitting the application for settlement or commitments to the commission according to the rules that will be formulated later. But cartels are not included in these sections therefore, in case of cartels, there will be no settlement or commitments.

When to make the proposal

For commitments, the offer is to be made any time between order to direct the director general (“DG”) to investigate the matter and before receiving the report of the DG by parties under Section 26(4).

For settlement, the application is to be made after receiving the report of DG by parties but prior to the final decision made by the commission in the matter.

Factors for consideration

The commission may after considering the nature, gravity and impact of the contraventions may agree to the proposal on other such terms as may be provided later in the regulations. While considering the proposal, the commission shall provide an opportunity to the parties concerned, the DG and other parties (if any) to submit their objections and suggestions. If the commission is of the opinion that the proposal is not appropriate or if the commission and the party concerned do not reach an agreement on the terms of the settlement or commitments within the time period as may be provided in the regulation, then the commission shall reject the proposal and proceed further with the inquiry.


No appeal shall lie under Section 53B against any order passed by the commission under these sections regarding the settlement or commitments.

Revocation of the order 

By application of Section 48C, in case the concerned party to the settlement or commitments does not give full and true disclosure or any material change that occurred in the facts and the party concerned fails to disclose to the commission, then the order passes under Sections 48A and 48B shall stand revoked and withdrawn and penalty up to 1 cr can be imposed and the inquiry can be restored by the commission.

Compensations for loss suffered due to settlement

If any loss is suffered by any enterprises, central govt., state govt., or any person due to contravention on which the commission passes the settlement order under Section 48A then that party which suffered the loss can claim compensation

Leniency plus for disclosing undisclosed cartels

According to new Section 46, if any seller, distributor, producer, trader, or service provided is being investigated for the alleged contravention of Section 3(3) and has disclosed about the cartel under Section 46(1), then makes a full and true disclosure about another cartel in which it is alleged to have violated Section 3, and that information enables the commission to form a prima facie opinion that there exists another cartel then the commission may impose lesser additional penalty.

The producer, seller, distributor, trader, or service provider may be allowed to withdraw their application for a lesser penalty according to the regulation provided later. But the commission and DG can act upon or use any evidence or information provided by such a person (mentioned above).

Hub and Spoke Cartels

The new proviso added to Section 3(3) provides that if any enterprises or association of enterprises or association of persons not related to the trade which is identical or similar in which the cartel is formed and if they participate or intend to participate in that cartel they are also presumed to have participated in that cartel and commission can proceed against that entity.

Limitation on Filing Information before CCI

The time period for filing information before the commission by person or entity mentioned in Section 19(1) for the alleged agreement which caused or is likely to cause AAEC vide Section 3(1) or abuse of dominance by any enterprises vide Section 4(1), limited to 3 years from the date on which cause of action arises but commission on providing sufficient cause for not filing the information can condone the delay.

Turnover i.e., Global Turnover

The amendment Act amended in Section 27(b) has introduced an explanation that defines the turnover as global turnover, which means when the commission finds that an agreement is in contravention of Section 3 or action of an enterprise contravenes Section 4, then the commission may impose a penalty up to 10% of the average global turnover for the last three preceding years.

This amendment is in derogation of the Supreme Court Judgment in the case of Excel Crop Care Limited v. Competition Commission of India & Anr. (2017), in which it was held that the turnover must be construed as relevant turnover, which means the turnover of the enterprises calculated as turnover specific to that product or services affected by the violation.

The Supreme Court, in this case, also talked about the doctrine of proportionality and observed that there should be a balance between the penalty imposed by the commission and the object that the commission wants to achieve i.e.,  to stop anti-competitive activities. The punishment imposed by the administrative authorities should not be too harsher than is necessary and rejected the contention of CCI to construe turnover as the total turnover of all the products. Therefore, this amendment can be challenged in a court of law as it violates the doctrine of proportionality and also the direction of the Supreme Court of India.

But this amendment has a positive side also that this will encourage more enterprises to resort to provisions such as settlement, commitments, or leniency.

Pre-deposit mandate of penalty for appeal

The amendment introduced in Section 53B mandates that to file an appeal against the order of the commission before NCLAT and if a penalty is imposed on the concerned party, 25% of the penalty is to be deposited by the party. Only then can it file an appeal to NCLAT.

Other important amendments

Provision related to Director General (DG)

Earlier DG was appointed by the Central government but now the provision has been  changed and now DG is to be appointed by the CCI but with prior approval of the Central Government.

According to Section 41, the powers of DG have also been increased by the amendment Act and the DG can now summon and examine on oath the officers, other employees, and agents of the party being under inquiry and this examination can be used as evidence against them thereafter.

The agents under this section include bankers, auditors and legal advisors, etc. Although the legal advisor here means in-house legal counsel, this amendment raises a question regarding taking away the attorney-client privilege granted by Section 126 of the Indian Evidence Act, 1872.

Reduction in the punishment for contravening the NCLAT orders

Earlier (Acc. to Section 53Q), if a person contravenes the order given by the appellate tribunal was punished with imprisonment of 3 years and/or a fine up to 1cr but the new amendment reduces this punishment to mere contempt proceedings under Section 53U.

Experts to be called by parties

A party to a case before the commission can call experts from the field of economics, commerce, international trade, or from any other discipline to provide expert opinion in connection with the case.


This amendment aims to enhance the competition landscape in India and promote and improve the overall economic welfare of the country and has significant implications for businesses, consumers, and other stakeholders.

Reducing the timeline for the approval of the combinations and forming a prima facie opinion by the commission will provide more speedy approval for the combinations. The introduction of the new threshold of INR 2000 cr will increase the scrutiny of the commission on the large-scale combinations and the introduction of settlement and commitments provision will encourage the parties to resolve their disputes through these mechanisms quickly and efficiently and saving their significant time and legal costs. The introduction of the hub and spoke cartels and leniency plus will help burst the cartels and encourage competition in the country’s market.

But provisions regarding the global turnover and the examination of in-house legal advisors on oath also raise questions of constitutionality and breach of attorney-client privilege. They can be challenged in the courts. Nonetheless, the amendments represent a significant step towards strengthening India’s antitrust enforcement framework and promoting a competitive market.


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