The CCI strikes the right balance: regulator and business facilitator – Industry News

It has been a busy year for the competition watchdog, both in terms of the number of cases handled and changes to existing regulations to strengthen the commission and create a business-friendly environment.

In March, the Competition Commission of India (CCI) has notified two essential tools – engagement and settlement – ​​to reduce disputes and ensure a walk corrections. Around the same time, the CCI introduced the leniency plus mechanism which aims to further improve the cartel detection mechanism.

Experts said these tools and a series of other changes to competition laws over the past year would make enforcement procedures smoother. “Changes to the General Regulation, the Lesser Sanctions Regulation, the Recovery of Financial Sanctions and the Combined Regulation have taken place over the past year. All this will provide certainty and clarity to the enforcers as well as all stakeholders,” said KK Sharma, noted competition lawyer.

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Although CCI already had transaction value thresholds (DVT) based on turnover and asset size, the regulator introduced a new DVT in September which requires mergers and acquisitions (M&A) to exceed a value of Rs 2,000 crore (and where the target entity has “substantial values”). business operations in India”, to obtain regulatory approval. The move was intended to target M&A in the startup space where there have been previous cases of a large technology company acquiring a significant stake in a smaller startup that did not need approval from the CCI at that time. But over time, the acquisition became large enough to impact the market.

In fact, at a recent event, CCI Chairman Ravneet Kaur said the regulator was now closely studying digital market transactions to identify “killer” and “creeping” acquisitions. However, some experts warn the regulator. Vinod Dhall, former chairman of CCI, said CCI needs to understand digital markets better. “CCI should not get carried away by the steps taken in many other countries to discipline big tech companies. It must adopt a balanced approach without losing sight of the consumer interest, which is the primary objective of competition law. Big Tech brings innovation, and that adds value to consumers,” he said.

The CCI’s efforts to expedite prosecutions against Big Tech hit a speed bump when the Supreme Court recently rejected its request to transfer petitions filed in various high courts by Big Tech vendors. Amazon And Flipkart against its antitrust investigation.

To be fair, the ICC is doubling down on its efforts to understand digital markets. For example, it hired the Management Development Institute Society (MDIS) to conduct market research on artificial intelligence (AI) and competition. Previously, the antitrust regulator established a dedicated Digital Markets and Data Unit (DMDU) in July last year to monitor activities in the digital sector.

Experts said the green lane, which is an automated approval mechanism for certain types of mergers and acquisitions, has started to show results. Even in cases where the CCI raised objections, the regulator acted promptly if remedial measures were proposed by the parties. In the case of Dependence-Disney merger, the deal was approved by the CCI within a week of objections being raised.

On the application side, opinions are divided between competition law experts. While some experts said there has been an upswing in enforcement activities such as the recent penalty of Rs 213.14 crore against Meta, others believe there is still room for improvement. On the antitrust side, the CCI has passed a total of 52 orders till December 22.

“Orders directing the DG’s investigation are showing a downward trend, as are the cases of reports submitted by the DG. Instances of imposition of sanctions are decreasing from a historical perspective, with 2024 having seen only one instance of imposition of sanctions for anti-competitive behavior,” Sharma said.