The Lok Sabha passed the Competition (Amendment) Bill, 2023, which could pose new challenges for global technology companies.

Changes brought by the Amendment

(1) Penal powers to CCI

• It grants the CCI the authority to penalize entities found engaging in anti-competitive behavior based on their global turnover, rather than just their annual domestic turnover, which was the case previously.

(2) Turnover Definition

• The definition of “turnover” has been a widely debated subject in the competition law landscape.
• The Supreme Court had previously fixed the criteria for determining turnover in competition law contraventions, holding that it should be the “relevant turnover,” i.e., turnover derived from the sales of goods or services.

(3) Mergers and acquisition

• The CCI will have greater authority in mergers and acquisitions worth more than Rs 2,000 crore.
• Additionally, the time limit for approval of mergers and acquisitions has been reduced from 210 days to 150 days.

Impact on Tech Companies

• While the provision on global turnover will not be exclusively applicable to tech companies, they are likely to be the most affected by it, given the nature of their business that operates across geographies.
• Typically, the revenue earned from these companies’ India operations is much smaller than their income in other regions, such as the US and Europe.

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