Changes proposed to competition act see mixed response
The introduction of the Competition (Amendment) Bill, 2022, seeks to overhaul the competition law framework in India. Several competition law practitioners have hailed the bill for its ambition and the far-reaching changes it proposes.
However, as our Cover story explains, the matter is far from black and white. The bill in its current form will see pushback from the industry seeking to water down certain provisions. One aspect is the deal value threshold that seeks to net a larger number of deals occurring in the digital space for regulatory clearance.
The other is the empowerment of the regulator to appoint the director general (DG), moving away from the current practice where the DG is appointed by the government. This will allow the Competition Commission of India to have a greater involvement in the affairs of its investigative wing, which discharged its responsibilities at arm’s length until now.
The bill in its current form also expands the powers of the DG to summon and examine officers of a company under oath, causing apprehension among legal advisers, bankers and auditors.
The bill did not get passed during the monsoon session of parliament and will be now be debated and deliberated during the winter session, which starts at the end of November. Furthermore, the Parliamentary Standing Committee for Finance was also asked to examine the bill and present its report around mid-November, giving unhappy parties a narrow window of opportunity to present their concerns.
In our Intelligence Report, we zoom into how anti-competitive behaviour is assessed. Competition authorities the world over do so through the lens of either the per se rule or the rule of reason. However, in India, the regulator determines liability on the basis of an appreciable adverse effect on competition, where factors such as the creation of entry barriers and the elimination of existing competition are primary.
Our author, professor Souvik Chatterji, argues that time and expense can be saved by relying on the per se rule, which only requires anti-competitive practice to occur, and does not establish the extent of the anti-competitive effect.
In The Briefing we look at the guidelines on digital lending rolled out by the Reserve Bank of India (RBI) that led to a hue and cry from industry players. The guidelines were in response to concerns that this innovative way of delivering credit to the populace was being misused by some online credit companies that charged exorbitant interest rates, violated the data privacy of users and harassed borrowers to the point of suicide.
The sector is estimated to grow to USD1.3 trillion by 2030 in India, and in the ongoing gold rush the RBI seeks to rein in the unfair business practices so that consumer trust can recover.
Regulated entities such as banks have been given until the end of November to ensure that their processes for white listing digital lending entities, due diligence and oversight of outsourced activities are in compliance with RBI’s guidelines.
In Vantage point, Mike Madden, global board chair at the ACC, alerts corporate counsel that interest and activity relating to environmental, social and governance-related (ESG) issues will only intensify in the future. And with ESG becoming a part of regular business function, the task of adherence with regulatory and compliance requirements will fall onto the legal department.
Madden informs general counsel that ESG very much falls into their domain, given that falling afoul of this area is linked with reputational and litigation risk. It is thus a subject to specialise in and an opportunity to be embraced rather than avoided.
In Electric dreams, we look at the roadblocks facing the rollout of electric vehicles (EV) in the country. The government, and Transport Minister Nitin Gadkari in particular, have been gung ho about EVs becoming mainstream. Doing so will lower the country’s oil import bills and dependence on Middle Eastern countries, and reduce air pollution given that Indian cities regularly figure on the world’s most polluted lists.
Gadkari said that by 2025 India would become the world’s No. 1 EV manufacturer, and export them around the world. But do ground realities match up to these lofty ambitions, or will they remain dreams?
Talks between Tesla and the government that were ongoing for years for setting up a manufacturing plant in the country fell through this year due to disagreements over import duties. Ford also abandoned its plans to manufacture EVs and export vehicles from two plants in India. Our article looks at important factors such as battery charging infrastructure, comparative costs, and a regulatory framework that was developed with a focus on internal combustion engine vehicles.