By Mr. Abhyudaya Yadav, Dr. Ankit Shrivastav and Dr. Jasmine Kaur

The implementation of global penalty under the Competition Act, 2002 through the Competition (Amendment) Act, 2023 has raised concerns among competition law academics and practitioners. This revision marks a significant departure from the relevant turnover doctrine based on the ruling in Excel Crop Care Ltd. v. CCI, raising concerns over proportionality and economic coherence. The legislative change creates a structural disconnect between an act within a constrained economic context, geographically within India, and the ambit of sanctions imposed globally. This paper challenges this trend by attempting to reconcile global turnover linked sanctions with legal theory and economic tools. This involves deterrence theory, optimal fine determination, proportionality norms, and marginal harm analysis to suggest that global turnover linked penalties may be economically unviable and legally unsustainable. This paper adopts a doctrinal and law and economics methodology, analysing Indian and comparative approaches to global turnover based penalties. The paper contends that the prevailing policy risks chilling innovation and investment, creates tensions with competitive neutrality, and weakens the territorially grounded orientation of the Competition Act, 2002. It argues for a penalty model grounded in harm attribution rather than enterprise size to restore proportionality and regulatory legitimacy.

Keywords: Global turnover, penalty, proportionality, optimal fine and marginal harm etc.

To read full paper click here