New Delhi: The proposed sector specific thresholds for merger and acquisitions in the competition amendment bill would "undesirably" add complexity to the existing rules, industry body CII has said.
Raising concerns over certain aspects in the Competition (Amendment) Bill, 2012, CII has said there should also be safeguards in place while expanding powers of Competition Commission's DG to carry out search and seizure.
Director General (DG) is the investigation arm of the Competition Commission of India.
CII said it was concerned over the proposed introduction of sector-specific thresholds, revision in search & seizure procedures, and introduction of the principle of joint dominance in the amended legislation.
The Competition Act is aimed at ensuring fair trade practices in the market and CCI keeps a tab on anti-competitive ways.
"None of the major jurisdictions including European Union and the United States apply sector specific thresholds to assess mergers and acquisitions... The provision will undesirably add another layer of complexity to the merger control regulations," the statement said.
Among others, the new legislation plans to introduce concept of joint or collective dominance by companies.
The industry body noted that such a clause could lead to possible scrutiny of business conduct of an enterprise, even if that entity does not qualify as being dominant on its own.
"... Introduction of the concept of joint dominance raises several issues, including absence of definition of collective dominance resulting in the CCI having discretionary powers," the statement said.
On increasing the powers of DG, the industry body has suggested that the same should be accompanied by sufficient safeguards.
"Specific guidelines and best practices to be followed by DG while conducting raids may be introduced and a provision be provided allowing companies to challenge the Commission's decision to conduct dawn raids before the Competition Appellate Tribunal," it added.
CII Director General Chandrajit Banerjee said it has requested for a review of the proposed amendments. Besides, the industry body has sought more clarity on provisions such as computation of penalties and incentives for companies that put in place competition compliance programmes.
Representation on the issues have been made to the Parliamentary Standing Committee on Finance, which is currently reviewing the bill. The bill was introduced in the Lok Sabha in December 2012.
First Published: Sunday, March 24, 2013, 12:51