Daily Current Affairs for 25th August 2022

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GS Paper 1: Art & Culture
Important For:
Prelims exam: Yakshagana
Why in News
The all-night Yakshagana performances by more than a century-old Yakshagana theatre troupe Kateel Durgaparameshwari Prasadita Yakshagana Mandali will soon be history as the group has decided to switch over to short duration shows from November.

What is Yakshagana?

• Yakshagana is a traditional theatre, developed in Chikmagalur district in the state of Karnataka and in Kasaragod district in Kerala.
• It emerged in the Vijayanagara Empire and was performed by Jakkula Varu.
• It combines dance, music, dialogue, costume, make-up, and stage techniques with a unique style and form.
• It is believed to have evolved from pre-classical music and theatre during the period of the Bhakti movement.
• It is sometimes simply called “Aata” (meaning “the play”).
• This theatre style is mainly found in coastal regions of Karnataka in various forms.
• Towards the south, the form of Yakshagana is called Thenku thittu and towards the north, it is called Badaga thittu.
• Its stories are drawn from Ramayana, Mahabharata, Bhagavata and other epics from both Hindu and Jain and other ancient Indic traditions.
Early poets
• Early Yakshagana poets included Ajapura Vishnu, Purandaradasa, Parthi Subba, and Nagire Subba.
• King Kanteerava Narasaraja Wodeyar II authored 14 Yakshaganas in various languages in the Kannada script.
• Mummadi Krishnaraja Wodeyar also wrote several Yakshagana prasanga.
• Noted poet, Muddana, composed several Yakshagana prasanga’s, including the very popular Rathnavathi Kalyana.

The Competition (Amendment) Bill, 2022

GS Paper 2: Government Policies & Interventions
Important For:
Prelims exam: Provisions of the bill
Why in News
A review committee was established in 2019 which proposed several major amendments to the Competition Act, 2002. The long-awaited Bill to amend the foresaid bill, was finally tabled in the Lok Sabha recently.

The Indian Competition Act of 2002

• The Indian Competition Act was passed in 2002, but it came into effect only seven years later.
• The Competition Commission primarily pursues three issues of anti-competitive practices in the market: anti-competitive agreements, abuse of dominance and combinations.

Why the amendment was needed?

As the dynamics of the market changes rapidly due to technological advancements, artificial intelligence, and the increasing importance of factors other than price, amendments became necessary to sustain and promote market competition.

Key features of the Bill:

• Regulation of combinations based on transaction value:
o The Act prohibits any person or enterprise from entering into a combination which may cause an appreciable adverse effect on competition.
o Combinations imply mergers, acquisitions, or amalgamation of enterprises.
o The prohibition applies to transactions where parties involved have: (i) cumulative assets of more than Rs 1,000 crore, or (ii) cumulative turnover of more than Rs 3,000 crore, subject to certain other conditions.
o The Bill expands the definition of combinations to include transactions with a value above Rs 2,000 crore.
• Definition of control for classification of combination:
o For classification of combinations, the Act defines control as control over the affairs or management by one or more enterprises over another enterprise or group. The Bill modifies the definition of control as the ability to exercise material influence over the management, affairs, or strategic commercial decisions.
• Time limit for approval of combinations: The Act specifies that any combination shall not come into effect until the CCI has passed an order or 210 days have passed from the day when an application for approval was filed, whichever is earlier. The Bill reduces the time limit in the latter case to 150 days.
• Anti-competitive agreements: Under the Act, anti-competitive agreements include any agreement related to production, supply, storage, or control of goods or services, which can cause an appreciable adverse effect on competition in India. Any agreement between enterprises or persons, engaged in identical or similar businesses, will have such adverse effect on competition if it meets certain criteria. These include: (i) directly or indirectly determining purchase or sale prices, (ii) controlling production, supply, markets, or provision of services, or (iii) directly or indirectly leading to collusive bidding. The Bill adds that enterprises or persons not engaged in identical or similar businesses shall be presumed to be part of such agreements, if they actively participate in the furtherance of such agreements.
• Settlement and Commitment in anti-competitive proceedings: Under the Act, CCI may initiate proceedings against enterprises on grounds of: (i) entering into anti-competitive agreements, or (ii) abuse of dominant position. Abuse of dominant position includes: (i) discriminatory conditions in the purchase or sale of goods or services, (ii) restricting production of goods or services, or (iii) indulging in practices leading to the denial of market access. The Bill permits CCI to close inquiry proceedings if the enterprise offers: (i) settlement (may involve payment), or (ii) commitments (may be structural or behavioural in nature). The manner and implementation of settlement and commitment may be specified by CCI through regulations.
• Relevant product market: The Act defines relevant product market as products and services which are considered substitutable by the consumer. The Bill widens this to include the production or supply of products and services considered substitutable by the suppliers.
• Appointment of Director General: The Act empowers the central government to appoint a Director General to CCI. The Director General assists in conducting inquiries into contraventions of any provisions of the Act. The Bill amends this to empower the CCI to appoint the Director General, with prior approval of the government.
• Qualification of members of CCI: As per the Act, the chairperson and members of CCI should have professional experience of at least 15 years in fields such as: (i) economics, (ii) competition matters, (iii) law, (iv) management, or (v) business. The Bill expands this to include experience in the field of technology.
• Decriminalisation of certain offences: The Bill changes the nature of punishment for certain offences from imposition of fine to penalty. These offences include failure to comply with orders of CCI and directions of Director General with regard to anti-competitive agreements and abuse of dominant position.
What is the major change in dealing with new-age market combinations?
• Provisions for combination:
o Any acquisition, merger or amalgamation may constitute a combination.
o Section 5 currently says parties indulging in merger, acquisition, or amalgamation need to notify the Commission of the combination only on the basis of ‘asset’ or ‘turnover’.
o The new Bill proposes to add a ‘deal value’ threshold. It will be mandatory to notify the Commission of any transaction with a deal value in excess of ₹2,000 crore and if either of the parties has ‘substantial business operations in India’. The Commission shall frame regulations to prescribe the requirements for assessing whether an enterprise has ‘substantial business operations in India’. This change will strengthen the Commission’s review mechanism, particularly in the digital and infrastructure space, a majority of which were not reported earlier, as the asset or turnover values did not meet the jurisdictional thresholds.
When business entities are willing to execute a combination, they must inform the Commission. The Commission may approve or disapprove the combination, keeping in mind the appreciable adverse effect on competition that is likely to be caused. The Commission earlier had 210 days to approve the combination, after which it is automatically approved. The new Bill seeks to accelerate the timeline from 210 working days to only 150 working days with a conservatory period of 30 days for extensions. This will speed up the clearance of combinations and increase the importance of pre-filing consultations with the Commission.

What is gun-jumping?

Parties should not go ahead with a combination prior to its approval. If the combining parties close a notified transaction before the approval, or have consummated a reportable transaction without bringing it to the Commission’s knowledge, it is seen as gun-jumping. The penalty for gun-jumping was a total of 1% of the asset or turnover. This is now proposed to be 1% of the deal value.

What challenge do combining parties face in open market purchases?

There have been several gun-jumping cases owing to the combining parties’ inability to defer the consummation of open market purchases. Many of them argue that acquisitions involving open market purchase of target shares must be completed quickly, lest the stock value and total consideration undergo a change. If parties wait for the Commission’s clearance, the transaction may become unaffordable.
Similar to the European Union merger regulations, the present amendment Bill also proposes to exempt open market purchases and stock market transactions from the requirement to notify them to the Commission in advance. This is subject to the condition that the acquirer does not exercise voting or ownership rights until the transaction is approved and the same is notified to the Commission subsequently.

Does the amendment Bill address the issue of Hub-and-Spoke Cartels?

A Hub-and-Spoke arrangement is a kind of cartelisation in which vertically related players act as a hub and place horizontal restrictions on suppliers or retailers (spokes). Currently, the prohibition on anti-competitive agreements only covers entities with similar trades that engage in anti-competitive practices. This ignores hub-and-spoke cartels operated at different levels of the vertical chain by distributors and suppliers. To combat this, the amendment broadens the scope of ‘anti-competitive agreements’ to catch entities that facilitate cartelisation even if they are not engaged in identical trade practices.

What is the amendment to the ‘settlements’ and ‘commitments’ mechanisms?

The new amendment proposes a framework for settlements and commitments for cases relating to vertical agreements and abuse of dominance. In the case of vertical agreements and abuse of dominance, the parties may apply for a ‘commitment’ before the Director General (DG) submits the report. ‘Settlement’ will be considered after the report is submitted and before the Commission decides. According to the amendment, the Commission’s decision regarding commitment or settlement will not be appealable after hearing all stakeholders in the case. The Commission will come out with regulations regarding procedural aspects.

What are the other major amendments?

In the amendment Bill, a provision called ‘Leniency Plus’ allows the commission to give an additional waiver of penalties to an applicant who discloses the existence of another cartel in an unrelated market, provided the information enables the Commission to form a prima facie opinion about the existence of the cartel. Other noteworthy amendments include the appointment of the DG by the Commission rather than the Central government, giving the Commission greater control. According to the Bill, the DG has the power to conduct investigations, including raids. The Commission will only consider information filed within three years of the occurrence of the cause of action. As part of the Bill, penalties and penalty guidelines are proposed to be amended. For any false information filed, a penalty of five crore will be imposed, and for failure to comply with the Commission directions, a penalty of ₹10 crore will be imposed. Additionally, the Commission will develop guidelines regarding the amount of penalties for various competition violations. For an appeal to be heard by the National Company Law Tribunal (NCLT) against the Commission’s order, the party will have to deposit 25% of the penalty amount.

What next?

By implementing these amendments, the Commission should be better equipped to handle certain aspects of the new-age market and transform its functioning to be more robust. The proposed amendments are undoubtedly needed; however, these are heavily dependent on regulations that will be notified by the Commission later. These regulations will influence the proposals. Also, the government needs to recognise that market dynamics change constantly, so it is necessary to update laws regularly.[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

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