Competition (amendment) Bill, 2020: from a Digital Market Perspective

Competition (Amendment) Bill, 2020: from a Digital Market Perspective

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Every economy has to change its market policies to keep up with global standards and technological advances. The Competition Act was one such change due to liberalization in 1991 to prepare Indian markets to deal with competition and control anti-competition practices. In 2018, a similar need was felt by the Government of India to review the 2002 Act and to pace it up with the current market trends. 

Hence, a Competition Law Review Committee (CLRC) was created to study these trends and suggest ways to keep the Competition Act in sync with the current regime. Based on the committee’s recommendations and the proposed analysis, the Competition (Amendment) Bill, drafted in 2020. 

The Bill appears to be a wholesome package that brings forth the long-awaited changes. It seems to demand transparency in the system while presenting the clarity and robustness of its provisions. Some of Bill’s salient features include changes concerning settlements and commitments, stipulating penalty guidelines for Appeals, dilution of standstill obligations regarding hostile takeovers and public bids, amongst other things. 


In recent times we have witnessed much public debate around the necessity for healthy competition. But with a pandemic hitting the world and everyone staying locked indoors, this debate becomes even more imperative for digital markets’ niche area. The new normal will be to order groceries online and sign business deals via zoom- our everyday transactions will now become digital. Such experiences will have to be monitored and guided by bodies like India’s Competition Commission (CCI). This article will attempt to understand how far the Competition (Amendment) Bill has come in bringing these transactions within its new regulation scope. Set below are certain salient features of the Bill on the Digital Era:


Previously, Section 3 of the Act had a narrow scope, and it only governed horizontal and vertical agreements, which caused an opposite effect on competition. The Bill seeks to change this stance and include within its ambit other contracts as well. This move is in direct relation to the case of Ramakant Kini v. Dr. L.H.Hiranandani Hospital, which discussed the scope of this provision to include agreements entered within the digital market. The Bills expressly have the ‘control over data’ or ‘specialized assets’ under the list of conditions that constitute a company’s dominance in the market. The rationale behind such inclusion was to expand the section’s scope to online businesses collecting customer data through user feedback loops, which would lead to the company having a more targeted approach. 

The Bill makes several changes in its existing structure to cater to a digital market’s growing needs. To achieve their said goal, they have started to recognize the companies’ tactics to escape scrutiny under the Act. In doing so, they shed light on the orders issued by the CCI in the Uber case and Hyundai Motors case and further recommended that the element of ‘knowledge’ or ‘intention’ should not be considered under such agreements. The CCI follows the US model of excluding these elements to be taken into account when penalizing the same. However, it has also been suggested that, much like the UK courts, CCI should also look at whether entities intentionally engage in deceitful conduct while assessing unlawful conduct in cartel formation. 

Section 2(c) of the 2002 Act defines a ‘cartel,’ but it does not refer to buyers or a buyer’s cartel. However, the Amendment Bill fills in this lacuna by explicitly recognizing buyer cartels. Such inclusion is especially relevant, considering a rising number of platforms facilitate collaboration between partners/vendors. There is enough literature to suggest that buyer cartels have equal potential in harming economic efficiency, similar to the effects of seller-power. 


The previous definition of control under the Act had not defined the minimum standards required to establish such control. Therefore, the CCI used to measure the ability to exercise both ‘decisive influence’ and ‘material influence.’ However, the definition of power is now proposed to be amended. It is defined as an exercise of “material influence” over the management or affairs or strategic commercial decisions of one or more enterprises/groups by another. Such standards of control help in serving a dual purpose- firstly, it brings forth consistency and certainty in future decisions. Secondly, it maintains an investment-friendly economy while simultaneously reserving the powers of scrutinizing such transactions. 

While the expansion of this definition creates a broader scope of the inquiry, it falls short in providing guidelines that explain what constitutes “material influence,” which amounts to “control” as per Bill’s terms. 


Digital transactions were previously outside their inquiry scope as CCI did not possess any residuary power under the Act. Subject to the proviso under Section 5, the Central government has been empowered to define new thresholds for merger notification in consultation with the CCI. They have been induced with the power to identify any other ground that would constitute combination and delist any land that otherwise formed across. The formation of these new thresholds, which can be notified in the public interest, helps enable the CCI to frame sector-specific points based on the transaction/deal value’s size, amongst other reasons. This is a clear step in the direction of capturing transactions in the digital market. With such unprecedented times, the need to regulate this digital area has increased exponentially. Since many mergers and acquisitions fall within the radar of these technology markets, they end up gaining market control and dominance in a silent manner that may not come within the purview of the public or that of the regulators. Some of the significant examples include market leaders like- Facebook’s acquisitions of WhatsApp and Instagram, or Microsoft’s acquisitions of Skype and LinkedIn, or Google’s acquisitions of health companies like Fitbit. Usually happens within the digital market realm, as it may be challenging to gauge assets and genuinely comprehend the concentration’s nature in the market space. Another area of concern that such mergers and acquisitions pose is protecting user data and privacy. There is a growing need to bring this sphere to CCI’s attention and offer protection long. 

The Bill has listed out specific grounds that would constitute combination, and it requires the parties involved in the said transactions to notify the CCI before executing such agreements mandatorily. While the scope of power that the CCI previously exercised may have increased, such expansion causes a direct surge in the number of requirements businesses must meet. While the scrutiny may be necessary, it may also lead to an increase in businesses’ compliance costs, impacting the ease of doing business. Small companies and start-ups, who have drastically increased in number, especially more in digital markets, may be affected by such legal necessities and technical compliance. 

The Bill has given statutory recognition to the Green Channel Process, which helps enable fast-paced regulatory approvals for a vast majority of mergers and acquisitions that may have no significant concerns regarding adverse effects on competition. Such measures help create a strict regime where non-disclosure of accurate or complete information may lead to severe consequences and force parties to abide by it. Further, a period of 30 days has been stipulated within which a time-bound assessment of combination occurs. The Bill also reduces the time within which the CCI has to issue its preliminary opinion on whether a variety would cause adverse effects on competition, from thirty working days to twenty calendar days. These strict timelines would help in reducing the burden on the parties involved in such transactions. 


The nature of the proposed amendments is a mix of structural, substantive, and procedural changes. While the procedural changes cover the settlement and commitment requirements, the structural modifications concern themselves with introducing a governing body and subsuming the DG’s office in the CCI. While the amendments have been praised for its transparency and consistency in their approach, it has also been criticized for compromising the CCI and DG’s independent functioning, respectively. Regardless of the various hurdles, the Amendment Bill is all set to move forward with the right intention. 

The desired goal is to achieve accountability from its functionaries while maintaining the independence of the body. 

However, there exists a greater need to teach the regulation of digital markets within its ambit. In the coming times, CCI will be in situations that require them to coordinate with modern technology markets like digital payments, telecom, and user privacy. In Vinod Kumar Gupta v. WhatsApp, we witnessed the current ideology of the competition law regime, which does not consider privacy to be an essential component when judging issues concerning competition practices. This outlook is an output of ignorance, especially when the need for the hour is data protection and individual privacy rights recognition. The CCI should reevaluate its framework and modernize its approach by coordinating with relevant data protection authorities and undertake privacy impact assessments, especially in light of the upcoming Personal Data Protection Bill, 2019.

Physical borders no longer determine competition within a country; if anything, the boundaries have become digital. With the changing business landscape, the Bill needs to reflect dimensions of innovation, user welfare, and privacy concerns. The Competition (Amendment) Bill, popularly called the CCI 2.0, has been much appreciated, as it helps increase the jurisdictional threshold of CCI but more so, due to the ability of CCI, in the beginning, to include digital transactions within the scope of its scrutiny.

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