Amendments To The Indian Competition Law Framework Go Live: Khaitan & Co. Analysis

Khaitan & Co. Update

Only a few days before the Competition Commission of India celebrated its 14th Annual Day on May 20, 2023, the Ministry of Corporate Affairs notified the enforcement of certain provisions of the Competition (Amendment) Act, 2023 (CAA 23), with effect from May 18, 2023.

The enforcement of the provisions comes shortly after the appointment of Ms. Ravneet Kaur as the new Chairperson, CCI was made public. These developments have formally ushered in a fresh and long-awaited chapter in India’s competition law framework; a chapter which promises to be characterised by robust enforcement action and M&A scrutiny.

A quick recap of a few noteworthy amendments that came into force on May 18, 2023.

Amendment to key definitional provisions:   

• The definition of “relevant product market” now formally recognises supply-side substitutability as a consideration when delineating relevant markets.

• A definition of the term “party” has been introduced to refer to a broad set of stakeholders including consumers, trade associations, information providers, opposite parties, and persons or enterprises that may have been impleaded by the CCI to join proceedings.

• Ahead of the enforcement of the detailed framework for “settlements” and “commitments”, the definition of the terms themselves have been notified.

Expanding the scope of anti-competitive agreements:

• With respect to anti-competitive horizontal agreements under Section 3(3), “hub-and-spoke cartels” have finally received statutory recognition. Now, any party that participates or intends to participate in an anti-competitive horizontal agreement may be found liable under Section 3(3) - irrespective of whether the party is engaged in an identical or similar trade as the remaining participants.

• The phrase “exclusive supply agreement” under Section 3(4)(b) has been rechristened “exclusive dealing agreement” and the definition has been updated to expand its scope.

• Agreements between an enterprise and an end-consumer has been explicitly excluded from the scope of vertical agreements under Section 3(4).

Expanding the application of “meeting competition” defence:

• “Meeting competition” will now be available as a valid defence to justify the imposition of unfair and discriminatory conditions. Reliance on the defence was earlier restricted to cases involving imposition of discriminatory conditions alone.

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