CCI slaps 392 cr fine on Oyo, MakeMyTrip, Goibibo

CCI slaps 392 cr fine on Oyo, MakeMyTrip, Goibibo

Subject : Statutory organisations

Context :The Competition Commission of India (CCI) on Wednesday slapped penalties totalling more than Rs 392 crore on online travel firms MakeMyTrip, Goibibo and hospitality services provider OYO for unfair business practices..

Concept :

• Competition Commission of India (CCI) is a statutory body of the Government of India responsible for enforcing the Competition Act, 2002, it was duly constituted in March 2009.
• The Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) was repealed and replaced by the Competition Act, 2002, on the recommendations of Raghavan committee.
• Competition Commission of India aims to establish a robust competitive environment.
• It primarily pursues three issues of anti-competitive practices in the market:
  • Anti-competitive agreements.
  • Abuse of dominance.
  • Combinations

Competition Act, 2002

• The Competition Act was passed in 2002 and has been amended by the Competition (Amendment) Act, 2007. It follows the philosophy of modern competition laws.
• The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.
• In accordance with the provisions of the Amendment Act, the Competition Commission of India and the Competition Appellate Tribunal have been established.
• Government replaced Competition Appellate Tribunal (COMPAT) with the National Company Law Appellate Tribunal (NCLAT) in 2017.

Composition of CCI

• The Commission consists of one Chairperson and six Members as per the Competition Act who shall be appointed by the Central Government.
• The commission is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases. The Chairperson and other Members shall be whole-time Members.
• Eligibility of members: The Chairperson and every other Member shall be a person of ability, integrity and standing and who, has been, or is qualified to be a judge of a High Court, or, has special knowledge of, and professional experience of not less than fifteen years in international trade, economics, business, commerce, law, finance, accountancy, management, industry, public affairs, administration or in any other matter which, in the opinion of the Central Government, may be useful to the Commission.

The Competition (Amendment) Bill, 2022

Highlights of the Bill

• The Bill seeks to amend the Competition Act, 2002, to regulate mergers and acquisitions based on the value of transactions.
• Deals with transaction value of more than Rs 2,000 crore will require CCI’s approval.  The Bill proposes to reduce the timeline for the CCI to pass an order on such transactions from 210 days to 150 days.
• The Bill expands the scope of entities that can be adjudged to be a part of anti-competitive agreements.
• Currently, enterprises or persons engaged in similar businesses can be held to be a part of anti-competitive agreements. The Bill expands this to also include enterprises or persons who are not engaged in similar businesses.
• The Bill provides a framework for settlement and commitment for faster resolution of investigations of anti-competitive agreements and abuse of dominant position.
• The Bill decriminalises certain offences under the Act by changing the nature of punishment from imposition of fine to civil penalties.
• These offences include failure to comply with orders of the CCI and directions of the Director General related to anti-competitive agreements and abuse of dominant position.