Suggesting substantial changes to competition regulatory framework, a government-constituted high level panel has recommended a green channel route for automatic approval of certain combinations, including those under the insolvency law, by the Competition Commission.
Under the Competition Act, combinations (mergers and acquisitions) beyond a certain threshold require clearance from the Competition Commission of India (CCI).
The Competition Law Review Committee, chaired by Corporate Affairs Secretary Injeti Srinivas, has recommended a slew of changes with respect to the Act.
The panel has suggested a "green channel route" for automatic approval of certain combinations.
"Parties to the combination may self-assess, based on specified criteria and pre-filing consultation with the CCI, whether they qualify for notification under the Green Channel," the report, uploaded on the corporate affairs ministry website, said.
Green Channel route should be the de facto route for merger notification and approval for majority cases. The government can formulate a detailed eligibility criteria in consultation with the CCI.
"Combinations arising out of the insolvency resolution process under the IBC (Insolvency and Bankruptcy Code) should be eligible for the Green Channel," the panel said.
The mandatory 30-day timeline for completion of the first phase of review of combination cases should be included in the Act itself, the report said.
"This timeline would continue to govern combinations that are not eligible for the proposed Green Channel," it added.
Another recommendation is that all permissible time exclusions from the 210-day timeline for assessment of mergers have to be codified in the Act itself in order to provide certainty and transparency in the process.
The panel also suggested that the regulator's power be enhanced to impose penalty for false statement.
To address issues related to jurisdictions when it comes to digital markets, the panel has suggested that a "size of transaction or deal value" threshold could be introduced for notification of combinations under the Act.
A ranking system for states on the basis of competitiveness of their laws and policies in the context of competition has also been suggested by the panel.
The committee has also called for insertion of a new explanation in the Act to cover hubs in 'hub and spoke cartel' to provide clarity on the liability of hubs while assessing violations regarding anti-competitive agreements.
Another suggestion is for having a dedicated bench of the National Company Law Appellate Tribunal(NCLAT) to hear appeals under the Act.
Setting up of a governing board comprising a chairman, six whole time and six part time members has also been recommended.
"The Director General's (DG) office should be formally folded into the CCI as an investigation division," the report said.
At present, the regulator's probe arm -- DG office -- functions separately.
The panel was set up in October 2018.