CUTS International: Govt Should not Delegate Power to Appoint CCI Director General

CUTS International: Govt Should not Delegate Power to Appoint CCI Director General
Photo: Getty Images 01.07.2024 264

At present, the Centre appoints the director general to assist CCI in conducting inquiry into contravention of any of the provisions of the competition law.

A proposal to let the Competition Commission of India (CCI) appoint the director general who investigates anti-competitive practices, moving away from the current practice of the government making the appointment directly, should be reviewed as it could blur the line between the investigating and adjudicating arms of the competition watchdog, according to think tank CUTS International.

The think tank said in a statement that the proposal contained in the Competition (Amendment) Bill, 2022, currently being studied by the Parliamentary Standing Committee on Finance, should be reviewed.

At present, the Centre appoints the director general to assist CCI in conducting inquiry into contravention of any of the provisions of the competition law. The proposal is to let CCI appoint the official with the prior approval of the government.

CUTS said this proposed amendment could blur the line between investigative arm and (quasi) adjudication arm of the CCI, which in turn can disturb the existing checks and balance. The amendment, it said, goes against the intent of the legislature which has envisaged a separation of powers between the DG and CCI –as is evident in the power of the DG to conduct an independent unannounced search and seizure under Section 41 of the competition law after obtaining approval from the Chief Metropolitan Magistrate, without taking any approval from CCI.

This amendment, CUTS stated, could impact the arm’s length functioning of the DG and hence could compromise the independence of investigation. “It is, therefore, recommended that this provision should be reviewed and more expert insights invited. It would be better proposition if the Central Government appoints DG in consultation with the Commission,” CUTS stated.

CUTS said it welcomed the Bill, in particular, the introduction of a framework for ‘settlement’ and ‘commitment’ in the law, improving the leniency framework, introduction of ‘limitation’, introduction of deal value threshold for M&A notification, recognition of ‘hub and spoke’ cartels etc. All these are likely to reduce case load on the Competition Commission of India (CCI) as well as enhance ease of doing business, the think tank said. It said that it has presented its comments to the Parliamentary panel.

The think tank also said that the proposed amendment with respect to the explanation of the term ‘control’ is fine but it could be better if some guidance in the form of illustration could be given on what would constitute ‘material influence’.

The Committee may recommend the introduction of guidance on the interpretation of the term “material influence”, by way of regulation, in the interest of maintaining the ease of doing business, the think tank suggested.

Source: Mint

India 

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