CCI draft regulations: Company commitments to be closely watched

The monitoring agencies may include an accounting firm, management consultancy, any other professional organisation or chartered accountants, company secretaries or cost accountants

The Competition Commission of India (CCI) plans to closely monitor implementation of settlement and commitment offered by companies such as Big Tech entities in antitrust cases by engaging monitoring agencies to oversee such implementation. 

This is part of the draft regulations released by the competition regulator on Thursday to overhaul the regulatory framework of CCI introduced in 2009, to bring it up to speed with the latest changes in the Competition Act passed by the government in April 2023. 
 

“Where the Commission is of the opinion that the implementation of its orders passed under Section 31 or Section 48A or Section 48B or any other provisions of the Act, and regulations made thereunder need monitoring, it may appoint agencies to oversee such implementation, on such terms and conditions as deemed fit by the Commission,” the draft regulations say.
 

The sections mentioned by the CCI relate to mergers, commitment and settlement applications. Sources have said that the Commission has received good response to its settlement and commitment scheme. Companies can, without 

admission of guilt, opt for the settlement or commitment option and provide a full and true disclosure of facts in respect of the alleged contraventions of the Act.

Monitoring agencies may include an accounting firm, management consultancy, any other professional organisation or chartered accountants, and company secretaries or cost accountants. They would be required to submit reports to the CCI from time to time.

                          

 “While the procedural changes are quite ordinary, the proposed amendment enhances the authority of the CCI and rightly so. In the past, we have seen too many comments that the CCI is toothless, etc. These amendments allow for the CCI to receive comments from all avenues and monitor orders that are being passed by them,” said Prashanth Shivadass, Partner, Shivadass & Shivadass Law Chambers.

The draft regulation for procedures for inquiry under Section 26 has also undergone a change, allowing for a supplementary investigation report with views from Central or State governments. “The Commission can consider such views either for closure of the information or for further investigation,” Shivadass added.

The proposed regulations now provide for some form of limitation — if an information is filed three years from the date of cause of action, it would have to be accompanied by a condonation of delayed application. The information now must also contain a statement that specifies if the said info with similar facts and issues has already been tested or decided by the CCI. An affidavit is now mandatory to verify the contents of the information.

On April 11 last year, the Competition (Amendment) Act, 2023 was passed by the Government, incorporating certain new provisions — such as settlement and commitment, and leniency, among others — and amending certain previously existing ones.

“This created a need for amendment/repeal/overhauling of the various regulations framed by the CCI as well as for introduction of certain new ones,” the Commission said.

The CCI has invited stakeholders to submit their comments on the draft amendments within 30 days beginning June 6, 2024.

“The primary objective of this amendment is to simplify and expedite procedural requirements, thereby facilitating a more efficient process. Additionally, it seeks to guarantee that every party involved has a fair and equal chance to participate and have their interests adequately represented and considered. We believe these changes will significantly improve the overall effectiveness and fairness of the process,” said Jidesh Kumar, Managing Partner of King Stubb & Kasiva Advocates and Attorneys.

Overhauling the framework

According to draft norms, companies can, without admission of guilt, opt for the settlement or commitment option
 

Can provide a full and true disclosure of facts in respect of the alleged contraventions of the Act
 

Sections relate to mergers, commitment, and settlement applications
 

Allows for a supplementary probe report with views from central or state govts
 

CCI invites comments from stakeholders within 30 days from June 6