Aditi Verma and Aman Yuvraj Choudhary
The Competition (Amendment) Act, 2023, overhauls the Competition Act, 2002 to bring it up to speed with more mature jurisdictions. It brings about a paradigm shift by making the penalty under Section 27 calculable upon global turnover rather than relevant turnover. This is to bring gatekeeper entities like the GAFA in line. This amendment overturned the holding of the Supreme Court in the Excel Crop case and flies in the face of the doctrine of proportionality.
Competition law in India applies to enterprises, the ambit of which is expansive and covers all entities: gatekeepers and non-gatekeepers alike. Unlike the EU, India does not identify “gatekeepers” as a different class from other undertakings. The EU imposes penalties on worldwide turnover upon the former only. Other jurisdictions that impose penalties upon worldwide turnover also have legislations founded upon the principle of proportionality and reasonability. This paper seeks to analyse the current approach to the determination of turnover in India under the existing laws, present a cross-jurisdictional analysis, discuss the doctrine of proportionality and make a case against the imposition of penalty based on global turnover upon enterprises without creating an intelligible differentia between gatekeeper enterprises and non-gatekeeper enterprises. A worldwide turnover-based penalty must be imposed upon the former only to avoid absurd consequences.
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