Introduction

The UK government recently introduced key changes to its competition law regime. The changes are based on the 4Ps framework - pace, predictability, proportionality and process - which seeks to increase operational efficiency of the Competition and Markets Authority (CMA) and enhance business and investor relations. The overall objective of the reforms is to enhance stakeholder confidence in the CMA and ensure better outcomes for the consumers.

Key changes proposed

The government has proposed changes under four headers, i.e. competition body’s decision-making accountability, markets work and market remedies, merger control and other cross-cutting changes. As part of the decision-making structure, the government has proposed to merge the panel-led investigation wing of the CMA with the adjudicating members.This is to ensure consistency and better accountability to the businesses.

The changes under markets work and market remedies are classified under three headers, i.e. streamlining market studies and investigation, introducing a sunset clause of ten years for the remedies ordered and providing the CMA with the discretion on how to proceed with the references from concurrent sector regulators for investigation. The objective here is to promote growth and innovation as part of the regulatory ecosystem.

The merger regime has been made business-friendly by introducing further safeguards at the jurisdictional level and rationalised timelines to save resources of the competition body. The government has introduced further criterias under the ‘share of supply’ test and ‘material influence’ at the threshold to assure businesses and seek to save up to 24 weeks of investigation under rationalised timelines.

Some other changes include using a single legal standard for the combined market review work, providing more discretion to the CMA to investigate algorithms and giving more powers to the Secretary within the Authority as part of the international cooperation division. These changes are based on past documents published by the government and decisional practice of the CMA.

Comparative Analysis with India

Competition body's decision-making accountability

The UK position is now closer to India as far as decision-making structure of the competition body is concerned. The Indian government has already merged the DG office with the adjudicating members of the Commission through the Competition (Amendment) Act, 2023. The underlying logic is the same which is to streamline the process and enhance accountability to the affected parties.

Markets work and market remedies

As far as markets work and market remedies is concerned, India would still hold the distinction between market studies and investigation unlike the UK. The Competition Commission of India could take a cue on the merger given the efficiency. The sunset clause is also a welcome move as Indian markets are equally dynamic in nature with a need to constantly update the remedies. Last but not the least, the Indian competition authority is already empowered to receive and make references to concurrent sector-regulators. The government could here ensure better coordination by integrating monitoring of competition remedies through the sector-based regulators.

Merger control

The Competition Commission of India will have a higher level of discretion in terms of assessing the mergers which fall under its jurisdiction. This discretion is welcome since the underlying markets are dynamic in nature and it is important that the competition body is able to match up. Any curtailing of this dynamism is likely to make the regulatory process static and inefficient. The UK regime, though, is advanced in the sense that it has already introduced further checks on the mergers in digital markets under the Digital Markets Competition and Consumers Act, an area where India lags.

Other changes

The single legal test for markets work in India is ‘Appreciable Adverse Effect on Competition (AAEC)’ with a strong preference for consumers. This position is balanced contrary to the UK as it allows the competition authority to factor in various dynamic factors affecting competition in the market while keeping consumers at the centre stage. The CCI, unlike the CMA, doesn't have specific powers to investigate algorithms. This could be either achieved by amending the law or drawing a causal link with the current provisions.

Table 1: Comparative Analysis of UK and Indian competition law review

Issue	Draft UK position	Indian position
Decision-making accountability	Investigation wing and adjudication members merged	Investigation wing and adjudicating members merged
Markets work and market remedies	Market studies and investigations streamlined Provision of sunset clause Discretion to process reference from sector regulators	Market studies and investigations are separate No provision of sunset clause Discretion to process reference from sector regulators
Mergers	Share of supply test Material influence test	Share of supply test Material influence test Other factors as the CCI may deem fit
Other changes	Single legal standard for intervention as “Adverse Effect on Consumers (AEC)” Higher discretion to investigate algorithms Increased powers to the Secretary	Single legal standard for intervention as “Appreciable Adverse Effect on Competition (AAEC)” with a strong preference for consumers No specific powers to investigate algorithms

Conclusion

Indian competition law draws inspiration from the UK. Some of the changes introduced in the UK such as streamlining market studies and investigations, introducing sunset clauses and granting higher discretion in the context of algorithms are worth considering for India. Implementation of the same in due measure is likely to further the cause of competition law and policy in both the countries.