1

AS INTRODUCED IN LOK SABHA

Bill No. 136 of 2012

THE COMPETITION (AMENDMENT) BILL, 2012

A

BILL
further to amend the Competition Act, 2002.
BE it enacted by Parliament in the Sixty-third Year of the Republic of India as follows:—
1. (1) This Act may be called the Competition (Amendment) Act, 2012. Short title and
commencement.
(2) It shall come into force on such date as the Central Government may, by notification
in the Official Gazette, appoint.
12 of 2003. 5 2. In the Competition Act, 2002 (hereinafter referred to as the principal Act), in section Amendment
2, in clause (y), after the words "goods or services", the words "excluding the taxes, if any, of section 2.
levied on sale of such goods or provision of services" shall be substituted.
 2
Amendment 3. In section 3 of the principal Act,—
of section 3.
(A) in sub-section (4), for the Explanation, the following Explanation shall be
substituted, namely:-—
‘Explanation.—For the purposes of this sub-section,—
(a) "tie-in arrangement" includes any agreement requiring a 5
purchaser of goods or recipient of services, as a condition of such
purchase or provision of such services, to purchase some other goods or
availing of some other services;
(b) "exclusive supply agreement" includes any agreement
restricting in any manner the purchaser of goods or recipient of services 10
in the course of his trade from acquiring or otherwise dealing in any
goods or services other than those of the seller or service provider or any
other person;
(c) "exclusive distribution agreement" includes any agreement to
limit, restrict or withhold the output or supply of any goods or provision 15
of services or allocate any area or market for the disposal or sale of the
goods or provision of services;
(d) "refusal to deal" includes any agreement which restricts, or is
likely to restrict, by any method the persons or classes of persons to
whom goods are sold or services are provided or from whom goods are 20
bought or services are availed of;
(e) "resale price maintenance",—
(i) in case of goods includes any agreement to sell goods on
condition that the prices to be charged on the resale by the
purchaser shall be the prices stipulated by the seller unless it is 25
clearly stated that prices lower than those prices may be charged;
(ii) in case of services includes any agreement to provide
services on condition that the prices to be charged on retailing of
services by the recipient of services shall be the prices stipulated
by the service provider unless it is clearly stated that prices lower 30
than those prices may be charged;’;
(B) in sub-section (5), in clause (i) after sub-clause (f), the following
sub-clause shall be inserted, namely:—
"(g) any other law for the time being in force relating to the protection of
other intellectual property rights;". 35

Amendment 4. In section 4 of the principal Act, in sub-section (1), after the words "or group", the
of section 4. words "jointly or singly" shall be inserted.
Amendment 5. In section 5 of the principal Act, in the Explanation, in clause (b), in sub-clause (i),
of section 5. for the words "twenty-six per cent.", the words "fifty per cent." shall be substituted.
Insertion of 6. After section 5 of the principal Act, the following section shall be inserted, 40
new section 5A. namely:—
Power to "5A. Notwithstanding anything in section 5, the Central Government may, in
specify consultation with the Commission, by notification, specify different value of assets
different
and turnover for any class or classes of enterprise for the purpose of section 5.".
value of assets
and turnover.
Amendment 7. In section 9 of the principal Act,— 45
of section 9.
(a) in sub-section (1), the words "and other Members" shall be omitted;
 3

(b) after sub-section (1), the following sub-section shall be inserted, namely:—
"(1A) The Members of the Commission shall be appointed by the Central
Government from a panel of names recommended by a Selection Committee
consisting of—
5 (a) the Chief Justice of India or his nominee — Chairperson;
(b) the Secretary in the Ministry of Corporate Affairs — Member;
(c) the Secretary in the Ministry of Law and Justice — Member;
(d) the Chairperson of the Commission — Member;
(e) one expert of repute who has special knowledge of, and
10 professional experience in, international trade, economics, business,
commerce, law, finance, accountancy, management, industry, public affairs
or competition matters including competition law and policy — Member. ”.
8. In section 20 of the principal Act, in sub-section (2), the words "or reference" shall Amendment
be omitted. of section
20.
15 9. In section 21 of the principal Act, in sub-section (1),— Amendment
of section
(a) for the words "is raised by any party", the word "arises" shall be substituted; 21.

(b) for the words "authority may", the words "authority shall" shall be
substituted;
(c) the proviso shall be omitted.
20 10. In section 21A of the principal Act, in sub-section (1),— Amendment
of section
(a) for the words "is raised by any party", the word "arises" shall be substituted; 21A.

(b) for the words "this Act", the words "any Act" shall be substituted;
(c) for the words "Commission may", the words "Commission shall" shall be
substituted;
25 (d) the proviso shall be omitted.
11. In section 26 of the principal Act,— Amendment
of section 26.
(a) in sub-section (7), after the words "in accordance with the provisions of
this Act", the words "and make appropriate orders thereon after hearing the
concerned parties" shall be inserted;
30 (b) in sub-section (8), after the words "in accordance with the provisions of
this Act", the words "and make appropriate orders thereon after hearing the
concerned parties" shall be inserted.
12. In section 27 of the principal Act,— Amendment
of section 27.
(i) in clause (b), after the proviso, the following proviso shall be inserted,
35 namely:—
"Provided further that no such penalty shall be imposed by the Commission
under this section without giving an opportunity of being heard to the producer,
seller, distributor, trader or service provider, as the case may be;".
(ii) in clause (g), after the proviso, the following proviso shall be inserted,
40 namely:—
"Provided further that while passing orders under this section, the
Commission shall give due regard to the opinion given by the statutory authority,
where such opinion has been obtained under the provisions of sub-section (1)
of section 21A of this Act.".
 4
Amendment 13. In section 31 of the principal Act,—
of section 31.
(a) in sub-section (11), for the words "two hundred and ten days", at both the
places where they occur, the words "one hundred and eighty days" shall be
substituted;
(b) in sub-section (12), for the words "ninety working days" the words "one 5
hundred and eighty days" shall be substituted.
Amendment 14. In section 41 of the principal Act,—
of section 41.
(a) for sub-section (3), the following sub-sections shall be substituted,
namely:—
"(3) Where in the course of investigation, the Director General has reason 10
to believe that any person or enterprise, to whom a notice under sub-section (2)
has been issued,—
(a) has omitted or failed to provide the information or produce
documents as required notice; or
(b) would not provide the information or produce documents which 15
will be useful for, or relevant to, the investigation; or
(c) would destroy, mutilate, alter, falsify or secrete the information
or documents useful for, or relevant to, the investigation, then,
he may, after obtaining the authorisation from the Chairperson of the
Commission,— 20

(i) enter, with such assistance and force, as may be required, the
place or places where such information or documents are expected to be
kept;
(ii) search such place or places, as the case may be;
(iii) seize documents and take copies of information, including 25
electronic mail, hard disk of computer and such other media;
(iv) record on oath statements of persons having knowledge of
the information or documents referred to in sub-clause (iii).
(4) The provisions of the Code of Criminal Procedure, 1973, relating to 2 of 1974.
searches and seizure shall apply, so far as may be, to searches and seizure 30
under sub-section (3).";
(b) the Explanation shall be omitted.
Amendment 15. In section 43 of the principal Act, for the words "punishable with fine", the words
of section 43. "liable to a penalty" shall be substituted.
Amendment 16. In section 51 of the principal Act, in sub-section (2), in clause (a), for the words 35
of section 51. "the Registrar", the words "the Secretary" shall be substituted.
Amendment 17. In section 53A of the principal Act, in sub-section (1), in clause (a), for the
of section words, brackets and figures "sub-sections (2) and (6)", the words, brackets and figures
53A.
"sub-sections (2), (6), (7) and (8)" shall be substituted.
Amendment 18. In section 63 of the principal Act, in sub-section (3), after the words "Every 40
of section 63. notification issued under", the word, figure and letter "section 5A", shall be inserted.
 STATEMENT OF OBJECTS AND REASONS
The Competition Act was enacted in 2002 keeping in view the economic developments
that resulted in opening up of the Indian economy, removal of controls and consequent
economic liberalisation which required that the Indian economy be enabled to allow
competition in the market from within the country and outside. It was subsequently amended
in 2007 and 2009. The Competition Act, 2002, inter alia, provides for the following, namely:—
(a) establishment of the Competition Commission of India, which shall be an
expert body and would function as a market regulator for preventing and regulating
anti-competitive practices in the country in accordance with the provisions of the Act
and it would also have advisory and advocacy functions in its role as a regulator
which can also impose a penalty in certain cases specified in the Act;
(b) establishment of the Competition Appellate Tribunal, which shall be a three
member quasi-judicial body headed by a person who is or has been a Judge of the
Supreme Court or the Chief Justice of a High Court to hear and dispose of appeals
against any direction issued or decision made or order passed by the Competition
Commission and to adjudicate claims on compensation and for passing of orders for
the recovery of compensation from any enterprise for any loss or damage sufferred as
a result of any contravention of the provisions of the Act.
2. The Competition Commission of India (the Commission) has become fully functional
since 2009. In the light of the experiences gained in its operation and the working of the
Commission, the Government of India in June, 2011, constituted an Expert Committee to
examine and suggest the modifications in the Competition Act, 2002. As suggested by the
Expert Committee, the Central Government has decided to amend the said Act and therefore,
the Competition (Amendment) Bill, 2012 is being introduced.
3. The Competition (Amendment) Bill, 2012, inter alia, provides the following, namely:—
(a) to insert a new sub-clause (g) in clause (i) of sub-section (5) of section 3 so
as to provide that anti-competitive agreements shall not restrict the matters regarding
the protection of intellectual property rights for the purposes of clause (i) of sub-
section (5) of the said section;
(b) to amend section 4 of the Act relating to abuse of dominant position so as to
provide that no enterprise or group either jointly or singly shall abuse its dominant
position;
(c) to amend sub-clause (i) of clause (b) in the Explanation to section 5 so as to
increase the percentage of voting rights from twenty-six per cent. or more to fifty
per cent. or more for the purpose of regulation of combinations;
(d) to insert a new section 5A in the Act so as to confer power upon the Central
Government to specify, in consultation with the Commission, different value of assets
and turnover for any class of enterprises for the purpose of section 5 of the Act;
(e) the reference of issues by the Statutory Authority to the Commission and the
Commission to the Statutory Authority are made mandatory;
(f) to empower the Commission to decide the matter after hearing the concerned
parties in cases where the Commission may not agree with Director General’s
investigation;
(g) to make provision that no penalty shall be imposed by the Commission for
contravention of the provisions of section 3 or section 4 without giving an opportunity
of being heard to the concerned person;

5
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(h) to amend sub-section (11) of section 31 so as to reduce the period from two
hundred and ten days to one hundred and eighty days within which the Commission
has to pass an order or issue direction on combinations and also to amend sub-
section (12) of the said section so as to increase the period from ninety working days
to one hundred and eighty days to bring the time period on par with sub-section (11);
(i) to amend section 51 of the Act so as to substitute the expression ‘‘the Secretary’’
in place of the ‘‘the Registrar’’ in clause (a) of sub-section (2) of the said section as
there is no post of the Registrar in the Commission.
4. The Bill seeks to achieve the above objectives.

NEW DELHI; SACHIN PILOT

The 16th November, 2012.
 ANNEXURE
EXTRACTS FROM THE COMPETITION ACT, 2002
(12 OF 2003)
* * * * *
2. In this Act, unless the context otherwise requires,— Definitions.

* * * * *
(y) "turnover" includes value of sale of goods or services;
* * * * *
CHAPTER II
PROHIBITION OF CERTAIN AGREEMENTS, ABUSE OF DOMINANT POSITION AND REGULATION OF
COMBINATIONS

Prohibition of agreements
3. (1) * * * * * Anti-
competitive
(4) Any agreement amongst enterprises or persons at different stages or levels of the agreements.
production chain in different markets, in respect of production, supply, distribution, storage,
sale or price of, or trade in goods or provision of services, including—
(a) tie-in arrangement;
(b) exclusive supply agreement;
(c) exclusive distribution agreement;
(d) refusal to deal;
(e) resale price maintenance,
shall be an agreement in contravention of sub-section (1) if such agreement causes or is
likely to cause an appreciable adverse effect on competition in India.
Explanation.—For the purposes of this sub-section,—
(a) "tie-in arrangement" includes any agreement requiring a purchaser of goods,
as a condition of such purchase, to purchase some other goods;
(b) "exclusive supply agreement" includes any agreement restricting in any
manner the purchaser in the course of his trade from acquiring or otherwise dealing in
any goods other than those of the seller or any other person;
(c) "exclusive distribution agreement" includes any agreement to limit, restrict or
withhold the output or supply of any goods or allocate any area or market for the
disposal or sale of the goods;
(d) "refusal to deal" includes any agreement which restricts, or is likely to restrict,
by any method the persons or classes of persons to whom goods are sold or from
whom goods are bought;
(e) "resale price maintenance" includes any agreement to sell goods on condition
that the prices to be charged on the resale by the purchaser shall be the prices stipulated
by the seller unless it is clearly stated that prices lower than those prices may be
charged.

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 8

(5) Nothing contained in this section shall restrict—

(i) the right of any person to restrain any infringement of, or to impose reasonable
conditions, as may be necessary for protecting any of his rights which have been or
may be conferred upon him under—
* * * * *
Prohibition of abuse of dominant position
Abuse of 4. (1) No enterprise or group shall abuse its dominant position.
dominant
position. * * * * *
Regulation of combinations
Combination. 5. The acquisition of one or more enterprises by one or more persons or merger or
amalgamation of enterprises shall be a combination of such enterprises and persons or
enterprises, if—
(a) any acquisition where—
(i) the parties to the acquisition, being the acquirer and the enterprise,
whose control, shares, voting rights or assets have been acquired or are being
acquired jointly have,—
(A) either, in India, the assets of the value of more than rupees one
thousand crores or turnover more than rupees three thousand crores; or
(B) in india or outside India, in aggregate, the assets of the value of
more than five hundred million US dollars, including at least rupees five
hundred crores in India, or turnover more than fifteen hundred million US
dollars, including at least rupees fifteen hundred crores in India; or
(ii) the group, to which the enterprise whose control, shares, assets or
voting rights have been acquired or are being acquired, would belong after the
acquisition, jointly have or would jointly have,—
(A) either in India, the assets of the value of more than rupees four
thousand crores or turnover more than rupees twelve thousand crores; or
(B) in India or outside India, in aggregate, the assets of the value of
more than two billion US dollars, including at least rupees five hundred
crores in India, or turnover more than six billion US dollars, including at
least rupees fifteen hundred crores in India; or
(b) acquiring of control by a person over an enterprise when such person has
already direct or indirect control over another enterprise engaged in production,
distribution or trading of a similar or identical or substitutable goods or provision of a
similar or identical or substitutable service, if—
(i) the enterprise over which control has been acquired along with the
enterprise over which the acquirer already has direct or indirect control jointly
have,—
(A) either in India, the assets of the value of more than rupees one
thousand crores or turnover more than rupees three thousand crores; or
(B) in India or outside India, in aggregate, the assets of the value of
more than five hundred million US dollars, including at least rupees five
hundred crores in India, or turnover more than fifteen hundred million US
dollars, including at least rupees fifteen hundred crores in India; or
 9
(ii) the group, to which enterprise whose control has been acquired, or is
being acquired, would belong after the acquisition, jointly have or would jointly
have,—
(A) either in India, the assets of the value of more than rupees four
thousand crores or turnover more than rupees twelve thousand crores; or
(B) in India or outside India, in aggregate, the assets of the value of
more than two billion US dollars, including at least rupees five hundred
crores in India, or turnover more than six billion US dollars, including at
least rupees fifteen hundred crores in India; or
(c) any merger or amalgamation in which—
(i) the enterprise remaining after merger or the enterprise created as a
result of the amalgamation, as the case may be, have,—
(A) either in India, the assets of the value of more than rupees one
thousand crores or turnover more than rupees three thousand crores; or
(B) in India or outside India, in aggregate, the assets of the value of
more than five hundred million US dollars, including at least rupees five
hundred crores in India, or turnover more than fifteen hundred million US
dollars, including at least rupees fifteen hundred crores in India; or
(ii) the group, to which the enterprise remaining after the merger or the
enterprise created as a result of the amalgamation, would belong after the merger
or the amalgamation, as the case may be, have or would have,—
(A) either in India, the assets of the value of more than rupees four
thousand crores or turnover more than rupees twelve thousand crores; or
(B) in India or outside India, in aggregate the assets of the value of
more than two billion US dollars, including at least rupees five hundred
crores in India, or turnover more than six billion US dollars, including at
least rupees fifteen hundred crores in India.
Explanation.—For the purposes of this section,—
* * * * *

(b) "group" means two or more enterprises which, directly or indirectly, are in a
position to—
(i) exercise twenty-six per cent. or more of the voting rights in the other
enterprise; or
* * * * *
9. (1) The Chairperson and other Members of the Commission shall be appointed by Selection
the Central Government from a panel of names recommended by a Selection Committee Committee for
Chairperson
consisting of— and Members
* * * * * of Commission.

20. (1) * * * * * Inquiry into

combination
(2) The Commission shall, on receipt of a notice under sub-section (2) of section 6, by Commission.
inquire whether a combination referred to in that notice or reference has caused or is likely to
cause an appreciable adverse effect on competition in India.
* * * * *
21. (1) Where in the course of a proceeding before any statutory authority an issue is Reference by
raised by any party that any decision which such statutory authority has taken or proposes statutory
authority.
to take, is or would be, contrary to any of the provisions of this Act, then such statutory
authority may make a reference in respect of such issue to the Commission:
 10
Provided that any statutory authority, may, suo motu make such a reference to the
Commission.
* * * * *
Reference by 21A. (1) Where in the course of a proceeding before the Commission an issue is raised
Commission. by any party that any decision which, the Commission has taken during such proceeding or
proposes to take, is or would be contrary to any provision of this Act whose implementation
is entrusted to a statutory authority, then the Commission may make a reference in respect of
such issue to the statutory authority:
Provided that the Commission, may, suo motu, make such a reference to the statutory
authroity.
* * * * *
Procedure for 26. (1) * * * * *
inquiry under
section 19. (7) If, after consideration of the objections or suggestions referred to in sub-section (5),
if any, the Commission is of the opinion that further investigation is called for, it may direct
further investigation in the matter by the Director General or cause further inquiry to be made
in the matter or itself proceed with further inquiry in the matter in accordance with the
provisions of this Act.
(8) If the report of the Director General referred to in sub-section (3) recommends that
there is contravention of any of the provisions of this Act, and the Commission is of the
opinion that further inquiry is called for, it shall inquire into such contravention in accordance
with the provisions of this Act.
Orders by 27. Where after inquiry the Commission finds that any agreement referred to in
Commission section 3 or action of an enterprise in a dominant position, is in contravention of section 3 or
after inquiry
section 4, as the case may be, it may pass all or any of the following orders, namely:—
into
agreements or * * * * *
abuse of
dominant (b) impose such penalty, as it may deem fit which shall be not more than ten per
position.
cent. of the average of the turnover for the last three preceding financial years, upon
each of such person or enterprises which are parties to such agreements or abuse:
Provided that in case any agreement referred to in section 3 has been entered into by
a cartel, the Commission may impose upon each producer, seller, distributor, trader or service
provider included in that cartel, a penalty of up to three times of its profit for each year of the
continuance of such agreement or ten per cent. of its turnover for each year of the continuance
of such agreement, whichever is higher.
* * * * *
(g) pass such other order or issue such directions as it may deem fit:
Provided that while passing orders under this section, if the Commission comes
to a finding, that an enterprise in contravention to section 3 or section 4 of the Act is
a member of a group as defined in clause (b) of the Explanation to section 5 of the Act,
and other members of such a group are also responsible for, or have contributed to,
such a contravention, then it may pass orders, under this section, against such members
of the group.
Orders of 31. (1) * * * * *
Commission
on certain (11) If the Commission does not, on the expiry of a period of two hundred and ten days
combinations. from the date of notice given to the Commission under sub-section (2) of section 6, pass an
order or issue direction in accordance with the provisions of sub-section (1) or sub-section
(2) or sub-section (7), the combination shall be deemed to have been approved by the
Commission.
 11
Explanation.—For the purposes of determining the period of two hundred and ten
days specified in this sub-section, the period of thirty working days specified in sub-section
(6) and a further period of thirty working days specified in sub-section (8) shall be excluded.
(12) Where any extension of time is sought by the parties to the combination, the
period of ninety working days shall be reckoned after deducting the extended time granted at
the request of the parties.
* * * * *
CHAPTER V
DUTIES OF DIRECTOR GENERAL
41. (1) * * * * * Director
General to
(3) Without prejudice to the provisions of sub-section (2), sections 240 and 240A of investigate
1 of 1956 the Companies Act, 1956 so far as may be, shall apply to an investigation made by the contraventions.
Director General or any other person investigating under his authority, as they apply to an
inspector appointed under that Act.
Explanation.—For the purposes of this section,—
(a) the words “the Central Government” under section 240 of the Companies
1 of 1956 Act, 1956 shall be construed as “the Commission”;
1 of 1956 (b) the word “Magistrate” under section 240A of the Companies Act, 1956 shall
be construed as the “the Chief Metropolitan Magistrate, Delhi”.
* * * * *
43. If any person fails to comply, without reasonable cause, with a direction given Penalty for
by— failure to
comply with
(a) the Commission under sub-sections (2) and (4) of section 36; or directions of
Commission
(b) the Director General while exercising powers referred to in sub-section (2) of and Director
section 41, General.

such person shall be punishable with fine which may extend to rupees one lakh for each day
during which such failure continues subject to a maximum of rupees one crore, as may be
determined by the Commission.
* * * * *
51. (1) * * * * * Constitution
of Fund.
(2) The Fund shall be applied for meeting—
(a) the salaries and allowances payable to the Chairperson and other Members
and the administrative expenses including the salaries, allowances and pension payable
to the Director General, Additional, Joint, Deputy or Assistant Directors General, the
Registrar and officers and other employees of the Commission;
* * * * *
CHAPTER VIIIA
COMPETITION APPELLATE TRIBUNAL
53A. (1) The Central Government shall, by notification establish an Appellate Tribunal Establishment
to be known as Competition Appellate Tribunal,— of Appellate
Tribunal.
(a) to hear and dispose of appeals against any direction issued or decision made
or order passed by the Commission under sub-sections (2) and (6) of section 26,
section 27, section 28, section 31, section 32, section 33, section 38, section 39, section
43, section 43A, section 44, section 45 or section 46 of this Act;
* * * * *
Power to 63. (1) * * * * *
make rules.
(3) Every notification issued under sub-section (3) of section 20 and section 54 and
every rule made under this Act by the Central Government shall be laid, as soon as may be
after it is made, before each House of Parliament, while it is in session, for a total period of
thirty days which may be comprised in one session, or in two or more successive sessions,
and if, before the expiry of the session immediately following the session or the successive
sessions aforesaid, both Houses agree in making any modification in the notification or rule,
or both Houses agree that the notification should not be issued or rule should not be made,
the notification or rule shall thereafter have effect only in such modified form or be of no
effect, as the case may be; so, however, that any such modification or annulment shall be
without prejudice to the validity of anything previously done under that notification or rule,
as the case may be.
* * * * *

12
 LOK SABHA

————

BILL
further to amend the Competition Act, 2002.

————

(Shri Sachin Pilot, Minister of State for Corporate Affairs)

GMGIPMRND—3740LS(S3)—04.12.2012.