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NEW DELHI, CORPORATE MISCONDUCT, COMPETITION BILL : The proposed limit of three years for a business to drag another party into the Competition Commission of India (CCI) for alleged anti-competitive conduct in the past does not prevent the regulator from initiating proceedings against corporate misconduct at any time on its own, CCI chairman Ashok Kumar Gupta said.

In the Competition (Amendment) Bill introduced in Parliament last week, the government had proposed a three-year period of limitation for anyone to bring cases before CCI about anti-competitive behaviour in order to offer certainty to businesses and markets. The idea was to ensure that corporate practices get scrutinized within a reasonable period of time and not long after the incident.

However, this time period does not apply to the regulator for acting on its own. Gupta explained the rationale for the proposed three-year limit for filing complaints saying that sometimes, information providers bring cases before CCI in respect of agreements or cause of action which dates back in time far too long. This creates uncertainty in the markets and puts businesses on perpetual risk of being dragged to CCI for any clause in an agreement which was executed long time back and is now alleged to be anti-competitive.

In some cases, agreements were executed prior to 2009 when the Competition Act came into being, he explained, adding that this was not a happy situation for a conducive regulatory environment. Therefore, it became necessary to provide a threshold beyond which cases cannot be brought before CCI. This period of limitation provides the much-needed certainty to businesses and markets, which is essential for ease of doing business, he said.

However, this restriction is not absolute, explained Gupta. “Firstly, the restriction is on the parties, and not on CCI. So, CCI can always take up cases suo motu (on its own accord) which it may consider to be egregious infractions of law, without being hidebound by period of limitation." Secondly, even in the context of parties filing cases before CCI belatedly, CCI has been vested with discretion to condone delay if it is satisfied that there has been sufficient cause for not filing information or reference within time, Gupta explained.

The Bill to amend the Competition Act was introduced in order to fine-tune the regulatory framework in line with the changes in business models that have emerged over the last two decades. The Bill proposes global best practices like settlement and commitment and enhanced leniency provisions in addition to cutting short the maximum time that can be taken for clearing mergers and acquisitions.

The Competition Act presently allows 210 days for CCI to assess the likely adverse effect of mergers and acquisitions on competition. Through a slew of legislative, procedural and administrative changes, CCI, over a period of time, has made the process from notification of a transaction to its approval simple and user-friendly, Gupta said.

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