The ongoing legal dispute between tech giant Google and domestic startups over the Play Store Billing policy has led to a significant development in India’s competition law landscape. The Centre has introduced a new provision in the recently amended Competition law, enabling penalties to be imposed on a “global turnover” basis for anti-competitive behavior or abuse of dominant position by enterprises.
This move signals the Competition Commission of India (CCI) to soon issue regulations on ‘Turnover determination,’ which will determine the amount of penalties imposed on enterprises for their anti-competitive conduct. The Corporate Affairs Ministry has concurrently paved the way for the CCI to issue regulations on Commitment and Settlement mechanisms.
The relevant provisions regarding “global turnover” and “Commitment and Settlement” in the Competition (Amendment) Act 2023 are set to come into force on March 6, as specified by the Ministry.
The introduction of penalties on a ‘global turnover basis’ is a significant feature of the amended law, providing the CCI with enhanced powers to address anti-competitive practices effectively. This provision, inserted through the Competition (Amendment) Act 2023, aims to strengthen the regulatory framework without prior public consultations.
In response to the proposed regulations, the CCI had issued draft regulations for ‘turnover determination’ in December last year, seeking public comments until January 25. These regulations are crucial as they will determine the computation of corporate fines, with exclusions such as indirect taxes, intra-group sales, and discounts.
The concept of ‘global turnover’ for penalty imposition overrides a previous Supreme Court ruling, which restricted the CCI’s powers by limiting penalties to relevant turnover linked to infringing goods or services. This development is seen as empowering the CCI to effectively deter potential violators of antitrust laws, particularly multinational companies operating across multiple jurisdictions.
Additionally, the CCI had previously issued draft regulations on settlement and commitment in August last year, in line with the amendments to the Competition Act, 2002. These mechanisms aim to expedite the resolution of competition law concerns by offering companies the option to modify their business practices or negotiate agreements with the competition authority, thereby avoiding lengthy legal proceedings.