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Competition Commission of India readying to notify Section 5 and 6 Print E-mail
Written by Arjun   
Tuesday, 13 October 2009
Bangalore: The Competition Commission of India (CCI) will soon notify Section 5 and 6 of the Competition Act, which relates to acquisitions and merger of companies.

"Consumer and the industry, both are the center of the competition commission," said  H. C. Gupta, Member, Competition Commission of India, while addressing industrialists and senior industry representatives, at an interactive session organised by CII.

As per Section 6, all M&A's above a certain threshold will have to be notified to the commission. Mr. Gupta said that thresholds above which M&As have to be notified to the commission are comparable with those set by European and other countries. "In the case of M&As, the threshold have been decided very categorically so there is no room for interpretation," he said.

More than 120 countries have this act, said Mr. Gupta. Section 3 & 4 were notified on 20th May and the commission has already started getting cases related to these sections. Section 3 deals with prohibition of anti-competitive agreements while Section 4 deals with the abuse of dominance.

Though the act was passed in India in 2003, it could not be enforced. It was amended in 2007, wherein the voluntary notification regime was changed to introduce a mandatory notification regime.

"Prior permission will ensure regulatory certainty. Under the act no one is exempted other than some sovereign functions of the government like police and defence. Except for 12 countries 108 countries have the provision to take prior permission, " explained Mr. Gupta.

He also said that the competition act is different from the MRTP act in that being dominant is okay as long as you don't abuse that dominance.

Industry leaders were concerned that approval from the Competition Commission of India could take up to 210 days. Mr. Gupta said that 210 days is the outer limit and that most cases would be cleared within 30 days. Only 4 to 5 percent of the cases will take longer.

"In a single year not more than 30 to 40 cases will come to the commission to get cleared. If commission comes to a conclusion that competition will be adversely affected then longer time will be taken. Majority of the cases would be cleared in a period of 30 days," he said.

The commission came into being on 1st March 2009.  The Central Government has appointed the Chairman and Members of the Competition Commission of India. Dr. Justice Arijit Pasayat joined as Chairperson, Competition Appellate Tribunal on May 20, 2009.

The commission has been established with a mandate to prevent practices having an adverse effect on competition.

H. C. Gupta said that the objective of the commission is to promote growth, both industrial and economic, not to become a bottleneck for growth.

The duties of the CCI include elimination of practices having adverse effect on competition; promoting and sustaining competition and protect interest of consumers. To fulfill these duties, the CCI has jurisdiction to enquire into anti-competitive agreements, enquire into abuse of dominant position, regulate combinations and undertake competitive advocacy.

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