See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/272245266

Regulation of Combinations Under the Competition Law in India

Article  in  SSRN Electronic Journal · January 2014

DOI: 10.2139/ssrn.2485557

CITATIONS READS
0 5,207

1 author:

Shivam Goel
S.G. & Co.
34 PUBLICATIONS   3 CITATIONS   

SEE PROFILE

All content following this page was uploaded by Shivam Goel on 15 January 2018.

The user has requested enhancement of the downloaded file.

 1

COMPETITION LAW

REGULATION OF COMBINATIONS UNDER THE COMPETITION LAW IN

INDIA

SHIVAM GOEL

[B.Com (H), D.U.; LL.B., Faculty of Law, D.U.; LL.M., NUJS, Kolkata]

Electronic copy available at: http://ssrn.com/abstract=2485557

 2

Table of Contents

Introduction Pg. 3

Hypothesis Pg. 7

Research Questions Pg. 7

Chapter 1: Combinations, Regulation of Combinations & Merger Pg. 8

Control Thresholds

Chapter 2: Evaluation of Appreciable Adverse Effect on Competition Pg. 12

Chapter 3: Procedure for Investigation of Combinations Pg. 16

Chapter 4: Regulation of Combinations- Order of Commission on Pg. 20

Certain Combinations, Remedies under the Act & Appeals

Conclusion Pg. 23

Bibliography Pg. 27

Electronic copy available at: http://ssrn.com/abstract=2485557

 3

Regulation of Combinations under the Competition Law in India

Introduction:

In the wake of liberalisation and privatisation that was triggered in India in early nineties, a
realisation gathered momentum that the existing Monopolistic and Restrictive Trade Practices
Act, 1969, was not equipped adequately enough to tackle the competition aspect of the Indian
economy.

Competition is a situation in market, in which sellers independently strive for buyer’s

patronage to achieve business objectives. Competition and liberalisation, together unleash the
entrepreneurial forces in the economy. Competition offers wide array of choices to
consumers at reasonable prices, stimulates innovation and productivity, and leads to optimum
allocation of resources.

With starting of the globalisation process, Indian enterprises started facing the heat of
competition from domestic players as well as from global giants, which called for level
playing field and investor-friendly environment. Hence, need arose with regard to
competition laws to shift the focus from curbing monopolies to encouraging companies to
invest and grow, thereby promoting competition while preventing any abuse of market
power.

In an open market economy, some enterprises may undermine the market by resorting to anti-
competitive practices for short-term gains. These practices can completely nullify the benefits
of competition. It is for this reason that, while countries across the globe are increasingly
embracing market economy, they are also reinforcing their economies through the enactment
of competition law and setting up competition regulatory authority. In India, in line with the
international trend and, to cope up with the changing realities, the Competition Act, 2002 was
enacted, establishing the Competition Commission of India (CCI) as the competition
regulatory authority.1

In Competition Commission of India v. SAIL2, the Supreme Court of India held that the main
objective of competition law is to promote economic efficiency using competition as one of
the means of assisting the creation of market responsive to consumer preferences. The
advantages of perfect competition are three fold: allocative efficiency, which ensures the
affective allocation of resources; productive efficiency, which ensures that cost of production
is kept at a minimum; and dynamic efficiency, which promotes innovative practices. These
factors, by and large have been accepted all over the world as the guiding principles for
effective implementation of Competition Law. In view of the Preamble of the Competition

1
Anti-trust and competition issues in India are governed by the Competition Act, 2002. In addition, the
Companies Act, 1956 (now replaced by the Companies Act, 2013) contains provisions with regard to the
acquisition and transfer of shares by or to enterprises having a dominant position or which will become
dominant as a result of such acquisition or transfer. See: The Asia- Pacific Antitrust Review 2013,
http://globalcompetitionreview.com/reviews/51/sections/175/chapters/1971/india-overview/, Visited on:07-03-
2014
2
(2010) 10 SCC 744
 4

Act, 2002, it requires not only protection of free trade but also protection of consumer
interest.

The Competition Act, 2002 was enacted to achieve the following objectives3:

1. To check anti-competitive practices.

2. To prohibit the abuse of dominance.
3. Regulation of Combinations.
4. To provide for the establishment of CCI, a quasi-judicial body to perform below
mentioned duties-
a. Prevent practices having adverse impact on competition.
b. Promote and sustain competition in the market.
c. Protect consumer interests at large.
d. Ensure freedom of trade (i.e. trade being carried on by other participants in the
market)
e. Look into matters connected therewith or incidental thereto.

Combinations include mergers, amalgamations and acquisition of control, shares, voting

rights or assets. Combinations are classified into:

1. Horizontal Combinations4
2. Vertical Combinations5
3. Conglomerate Combinations6

If a proposed combination causes or is likely to cause appreciable adverse effect on

competition, it cannot be permitted to take effect.

The scrutiny of a combination under the Competition Act, 2002 in India is usually expected
to take place before it comes into effect with an idea of preventing a possible anti-competitive
behaviour which may adversely affect the consumers. Combinations likely to have an anti-
competitive effect can be permitted after such effects are removed by modifications.7

It is pertinent to note that, the worldwide term used for this concept of regulation of
combinations is merger review or merger control, which is done by competition regulators to
prevent mergers and acquisitions that are likely to reduce competition in the market and lead
to higher prices, lower quality of goods or services, or less innovation. Some countries have
voluntary regimes while most have mandatory regimes, regulating combinations. Mandatory

3
See: Rajkumar Dubey, Indian Competition Act: An Overview, 27 July 2005,
http://www.mondaq.com/india/x/33971/Antitrust+Competition/Indian+Competition+Act+An+Overview,
Visited on: 07-03-2014; Also see: The preamble of the Competition Act, 2002.
4
Horizontal combinations are those that are between rivals and are most likely to cause appreciable adverse
effect on competition.
5
Vertical combinations are those that are between enterprises that are at different stages of the production chain
and are less likely to cause appreciable adverse effect on competition.
6
Conglomerate combinations are those that are between enterprises not in the same line of business or in the
same relevant market and are least likely to cause appreciable adverse effect on competition.
7
See: Competition Commission of India, Regulation of Combinations,
http://www.cci.gov.in/index.php?option=com_content&task=view&id=34, Visited on: 03-03-2014
 5

regime implies that, enterprises having thresholds above the defined thresholds as under the
governing Competition Law; have to mandatorily notify the competition regulator for merger
clearance.

In the U.S., anti-trust law was enacted in 1890 primarily to control the concentration of
economic and industrial power. However, Section 7 of the Clayton Act is the primary
legislation in the U.S. governing mergers and acquisitions, but limits itself to the territory of
the U.S. The Clayton Act applies to both mergers with immediate anticompetitive effects and
those that have a future probability of substantially reducing competition. In addition, the
principal legislation Sherman Act broadly states that every contract, combination, or
conspiracy that restrains trade or commerce among the states, or with foreign nations, is
illegal and that every person who monopolises, or attempts to monopolise is guilty of a
felony.8

The European competition law is governed primarily by Articles 85 and 869 of the Treaty
Establishing the European Community. Article 85 is designed primarily to achieve the same
goals as the Sherman Act in the U.S. legislation in so far as it prohibits all agreements and
concerted practices that affect trade among the E.U. members and which have as their main
objective the prevention, restriction or distortion of competition. Article 86 is designed to
meet the policy objectives of the Clayton Act that it prohibits the abuse of dominant market
position through unfair trading conditions, pricing, limiting production, tying and dumping.
In the E.U. the mergers and acquisitions are taken care of by the Merger Regulation of the
European Commission10 and the Implementation Regulation of the European Commission11.

In the U.K., the Competition Act, 1998 and the Enterprise Act, 2002 are the most important
statutes with purely national dimension. However, Section 60 of the Competition Act, 1998
provides that U.K. rules are to be applied in line with European jurisprudence. The prime
purpose of competition law in U.K. as is there in competition laws of other jurisdictions is-
prevention of cartelisation resulting in appreciable adverse effect on competition; prevention
of abuse of dominant position and supervising mergers and acquisitions of large corporations,
including some joint ventures.

As already stated, the term combination for the purposes of the Indian Competition Law is
defined very broadly, to include any acquisition of shares, voting rights, control of assets or
merger or amalgamation of enterprises. Under the Indian Competition Law Regime, where
the parties to the acquisition, merger or amalgamation satisfy the prescribed monetary
threshold in relation to size of the acquired enterprise and the combined size of the acquiring
and acquired enterprise, then such combinations are approved. The thresholds are

8
See: Competition laws in India- Analysis & Comparison, Impact of competition laws on domestic and foreign
M&A, takeovers, JVs & like alliances, India Juris, http://www.indiajuris.com/comlaw.pdf, visited on: 20-03-
2014
9
Article 86 of EC is designed to meet policy objectives of the Clayton Act.
10
COUNCIL REGULATION (EC) No. 139/2004 of 20 January 2004 on the control of concentrations between
undertakings (the EC Merger Regulation).
11
The Implementing Council Regulation (EC) No. 139/2004 on the control of concentrations between
undertakings.
 6

unambiguously specified in the Competition Act, 2002 in terms of assets or turnover in India
and abroad.

Entering into a combination which causes or is likely to cause an appreciable adverse effect
on competition within the relevant market in India is prohibited and such combination would
be void. The provisions relating to regulations of combinations (M&A) in the Act have come
into force from June 1, 2011.12 The main enforcement provisions of regulation of
combinations are given under the following sections: Section 5 (Combination), Section 6
(Regulation of combinations), Section 20 (Inquiry into Combination by Commission),
Section 29 (Procedure for Investigation of Combinations), Section 30 (Procedure in Case of
Notice under Sub-Section (2) of Section 6) and Section 31 (Orders of Commission on certain
Combinations).

The review process for combination under the Indian Competition Act involves mandatory
pre-merger notification to the Commission (CCI) of combinations that exceed the prescribed
threshold. In case of a merger to be notified is not notified, the Commission has the option to
inquire into it within one year of the taking into effect of the merger. In case such an inquiry
finds appreciable adverse effect on competition, the Competition Commission of India may
order de-merger which would involve social and economic costs. The Commission is also
authorised to impose a fine which may extend to one percent of the total turnover or the
assets of the combination.13

In nutshell, in case of combination, CCI may pass the following orders14-

1. Approval of the combination if no appreciable adverse effect on competition is found.

2. Disapproval of the combination in case appreciable adverse effect on competition is
found.
3. It may propose suitable modification as accepted by the parties.
4. During enquiry grant interim relief by way of temporary injunctions.
5. Award compensation.

12
See: The Central Government notification S.O. 479(E) dated 4th March, 2011
13
See: Regulation of Combination, http://arthapedia.in/index.php?title=Regulation_of_Combinations, Visited
on: 14-03-14; Also see: Provisions Relating to Combinations, Advocacy Booklet Series 6, The Competition Act,
2002.
14
Supra 2
 7

Hypothesis:

The basic premise of the Competition law is based on three-fold aspects- firstly, maintenance
or promotion of market competition; secondly, curbing anti-competitive market practices and
thirdly, consumer welfarism. All these three aspects are inter-connected and inter-linked.

Regulation of combinations is one aspect of the competition law in regards to which the law
in India is still growing and jurisprudential aspects as to the same are being incorporated from
the laws as so prevalent in the EU jurisdiction and the U.S. jurisdiction. The term
Combination, speaking in regards to the Competition law as so prevalent in the Indian
jurisdiction comprises of mergers, amalgamations and acquisition of control, shares, voting
rights and assets of one company by another company or group. In line with the notified
merger thresholds, notified by way of Combination Regulations 2011, the CCI looks into the
aspect of effect to market competition efficacy and effectiveness of a particular combination.

Assessment of whether a particular combination is legally feasible, what the CCI looks into is
the relevant market the Combination will be catering to, the term relevant market is to include
the relevant product market and the relevant geographical market; appreciable adverse effect
on competition the particular combination shall be casting on the relevant market; and there
so the Commission shall be ordering as to whether the combination is to be approved,
rejected or is to be approved with modifications.

Jurisprudentially, the Competition Act, 2002 is based on the effects doctrine15 and draws
inspiration from the MRTP Act, 1969, which in turn seeks inspiration from Article 38 and
39(c) of the Constitution of India, 1950. Regulation of combinations as a means to curb anti-
competitive market practices is witnessing constant growth in India, in terms of both law and
legal philosophy. The Researcher in his research paper shall be giving due stress on three
major aspects: meaning of the term Combination, how Combinations are as such regulated in
India and procedure of investigation into the combinations, remedies & appeals.

Research Questions Formulated:

1. What is the meaning of the term Combination in regards to the Competition Act,
2002? How combinations can be regulated in terms of powers and authority expressly
granted to the CCI? How appreciable adverse effect to completion can be evaluated in
regards to combinations? What is the procedure of inquiry as so undertaken by the
CCI when market competitiveness of a Combination is evaluated?

2. What is the jurisprudential basis of Section 5 & 6 of the Competition Act, 2002, as
also of Section 20(4) read in terms with the Combination Regulations 2011? What are
the relevant merger thresholds in practice at present?

15
National competition law usually does not cover activity beyond territorial borders unless it has significant
effects at national-state level. Countries may allow for extra-territorial jurisdiction in competition cases based on
the effects doctrine. See- Section 32 of the Competition Act, 2002.
 8

Chapter 1: Combinations, Regulation of Combinations & Merger Control Thresholds

Combinations: Combinations mean mergers16, amalgamations of companies17 or acquisition

of control18, shares19, voting rights or assets of one company20 by another company or
group21. As such, combinations are usual business activities, which allow companies to
consolidate their position in markets.

A merger is a combination of two or more businesses into one business. Laws in India use the
term ‘amalgamation’ for merger. The Income Tax Act, 1961, Section 2(1A) defines
amalgamation as the merger of one or more companies with another or merger of two or
more companies to form a new company, in such a way that all assets and liabilities of the
amalgamating companies become assets and liabilities of the amalgamated company and
shareholders not less than nine-tenth in value of shares in the amalgamating company or
companies become shareholders of the amalgamated company.

16
Eric L. Kohler defines ‘merger’ in his Dictionary for Accountants, in the words: “The fusion of two or more
enterprises, through the direct acquisition by one of the net asset of the other or others. A merger differs from a
consolidation in that in the former no new concern is created, whereas in a consolidation a new corporation or
entity acquires the net assets of all combining units.” See: Siddharth Bawa, Law of Competition in India,
Allahabad Law Agency, First Edition 2005, Chapter III: Prohibition of Certain Agreements, Abuse of Dominant
Position and Regulation of Combinations, p.28
17
Some scholars are of the opinion that: Amalgamation of Companies means, the combination of one or more
companies into a new entity. An amalgamation is distinct from a merger because neither of the combining
companies survives as a legal entity. Rather, a completely new entity is formed to house the combined assets
and liabilities of both companies. See: www.investopedia.com/terms/a/amalgamation.asp, Visited on: 17-03-
2014. In India, however, we have merger in two defined forms i.e. merger by absorption and merger by
consolidation, hence- merger and amalgamation are considered one and the same thing.
18
According to Section 2(a) of the Competition Act, 2002, acquisition means directly or indirectly, acquiring or
agreeing to acquire:
1. Shares, voting rights or assets of any enterprise;
2. Control over management or Control over assets of any enterprise.
Also, Explanation (a) to Section 5 of the Competition Act, 2002 defines control. Control includes controlling
the affairs or management by:
1. One or more enterprises, either jointly or singly, over another enterprise or group;
2. One or more groups, either jointly or singly, over another group or enterprise.
19
As per Section 2(v) of the Competition Act, 2002, the term “Shares” means shares in the share capital of a
company carrying voting rights and includes-
(i). Any security which entitles the holder to receive shares with voting rights;
(ii). Stock except where a distinction between stock and share is expressed or implied.
20
The term person includes a company. The term person has been defined under Section 2(l) of the Competition
Act, 2002.
21
‘Group’ has been defined in clause (b) of the explanation to Section 5 in the following way:
‘Group’ means two or more enterprises which, directly or indirectly, are in a position to-
(i). Exercise twenty six percent or more of the voting rights in the other enterprise; or
(ii). Appoint more than fifty percent, of the members of the board of directors in the other enterprise; or
(iii). Control the management or affairs of the other enterprise.
The government has exempted “Group” exercising less than fifty percent of voting rights in other enterprise
from the provisions of Section 5 of the Act for a period of five years. See: The Central Government notification
S.O. 479(E), dated 4th March, 2011.
 9

Merger in India may take place in either of the two forms:

1. Merger through absorption, absorption is a combination of two or more companies

into an ‘existing company’. All companies except one lose their identity in such a
merger.
2. Merger through consolidation, consolidation is a combination of two or more
companies into a ‘new company’. In this form of merger, all companies are legally
dissolved and a new entity is created.

An acquisition may be defined, in Indian context, as an act of acquiring effective control by

one company over assets or management of another company without any combination of
companies. Thus, in an acquisition two or more companies may remain independent, separate
legal entities, but there may be a change in control of the companies. When an acquisition is
'forced' or 'unwilling', it is called a takeover. In an unwilling acquisition, the management of
'target' company would oppose a move of being taken over. But, when managements of
acquiring and target companies mutually and willingly agree for the takeover, it is called
acquisition or friendly takeover.22

Regulation of Combinations: Most combinations do not raise serious prospect of an

increase in market power; some however may raise serious concerns, which can be
detrimental to competition. The core purpose of regulating combinations is to prevent the
prospective anti-competitive effects of such combinations through appropriate remedies,
including prohibition, if necessary. It is ex-ante in nature and aims to ensure that firms do not
acquire such a degree of market power after the combination so as to harm the interests of
consumers, the economy and society as a whole.

The Competition Act, 2002 provides for mandatory filing of proposed combinations based
on thresholds, which were further raised by 50 percent through notification by the
Government of India. The relevant provisions of the Act relating to Combinations have come
into effect from 1st June, 2011 after an extensive consultation process with stakeholders.23 In
order to minimise regulatory compliance cost on the industry, the Regulations lay down the
categories of transactions that ordinarily are not likely to have an appreciable adverse effect
on competition and, therefore, ordinarily not required to make any filing.24 The Regulations
also provide certainty on the applicability of the law by stipulating that only combination

22
See: Merger and Acquisition, http://business.gov.in/growing_business/mergers_acq.php, visited on 20-03-
2014.
Note: Under the MRTP Act, 1969, takeover meant acquisition of not less than 25% of the voting power in a
company while in the Companies Act, 1956 (Section 372), a company’s investment in the shares of another
company in excess of 10% of the subscribed capital can result in takeovers. An acquisition or takeover does not
necessarily entail full legal control. A company can also have effective control over another company by
holding a minority ownership.
23
Regulation notified by the Competition Commission of India: The Competition Commission of India
(Procedure in regard to the Transaction of business relating to combination) Regulation 2011 (No. 3 of 2011).
See:http://www.cci.gov.in/images/media/Regulations/CCI_Combination_Regulations_as_amended_upto_23_02
_2012.pdf, Visited on: 15-03-2014
24
The Competition Commission of India (Procedure in regard to the Transaction of business relating to
combination) Regulation 2011 (No. 3 of 2011); Regulation 4 i.e. Categories of transactions not likely to have
appreciable adverse effect on competition, read with Schedule I.
 10

proposals approved by their boards, or for which binding documents were executed, on or
after June 1, 2011, are required to make a filing to the Commission.

The Combination Regulations are reviewed and amended from time to time with a view to
simplify the filing requirements and bring about greater certainty in the application of the Act
and the Regulations. The Commission has the power to take suo-moto action by calling for
notice from parties to the mergers, who do not comply with the mandatory filing
requirements.

Merger Control Thresholds25:

The criteria that will trigger a merger filing in India relate to either the turnover or assets of:

a. The acquirer and the target (the individual or parties); or

b. The group to which the merged entity will belong after the acquisition (the Group).

The current merger control thresholds are as follows-

Individual: Either the combined assets of the enterprises are more than Rs. 1500 crores in
India or the combined turnover of the enterprise is more than Rs. 4500 crores in India.

In case either or both of the enterprises have assets/turnover outside India also then: the
combined assets of the enterprises are more than U.S. $ 750 million, including at least Rs.
750 crores in India, or combined turnover of the enterprises is more than U.S. $ 2250
million, including at least Rs.2250 crores in India

Group: The group to which the enterprise (whose control, shares, assets or voting rights are
being acquired) would belong after the acquisition or the group of which the enterprise
remaining the merger or amalgamation would belong has either, assets of more than Rs.
6000 crores in India or turnover more than Rs. 18,000 crores in India.

Where the group has presence in India as well as outside India then the group has assets more
than U.S. $ 3 billion including at least Rs.750 crores in India or turnover more than U.S. $ 9
billion including at least Rs. 2250 crores in India.

25
See: Krishan Keshav & Divya Verma, Competition and Investment Laws in India, Singhal Law Publications,
Chapter 2: Prohibition of Agreements, Abuse of Dominant Position and Regulation of Combinations, p.82-83.
 11

Thus, a total of eight permutations of threshold can trigger the requirements of notification
and approval of notification and approval of CCI.

Individuals Group

Assets26 1. Over Rs. 1,500 crores in India;
or
2. Over U.S. $ 750 million
worldwide, of which at least
Rs.750 crores is in India.
Turnover27 1. Over Rs. 4,500 crores in India;
or
2. Over U.S. $ 2250 million
worldwide, of which at least
Rs.2250 crores is in India.
3. Over Rs. 6,000 crores in India;
or
4. Over U.S. $ 3 billion
worldwide, of which at least
Rs.750 crores is in India.
3. Over Rs. 18,000 crores in
India; or
4. Over U.S. $ 9 billion
worldwide, of which at least
Rs. 2,250 crores is in India.

26
The term Assets has not been defined under the Act. However, Explanation (c) to Section 5 gives some
indication as to the meaning of this term and deals with determining the value of assets as follows: “The value
of assets shall be determined by taking the book value of the assets as shown, in the audited books of account of
the enterprises, in the financial year immediately preceding the financial year in which the date of proposed
merger falls, as reduced by any depreciation, and the value of assets shall include the brand value, value of
goodwill, or value of copyright, patent permitted use, collective mark, registered proprietor, registered
trademark, registered user, homonymous geographical indication, geographical indications, design or layout-
design or similar commercial rights, if any, referred to in sub-section (5) of Section 5.”
27
Section 2(y) of the Competition Act, 2002, talks about the term turnover to include the value of sale of goods
or services.
 12

Chapter 2: Evaluation of Appreciable Adverse Effect on Competition

It is significant to note that, not all combinations are deemed to be anti-competitive. Some
instances of such combinations are28:

1. Combinations within the same group of companies;

2. Acquisition of not more than 15% of voting rights, not leading to control;
3. Acquisition of shares where the acquirer already has 50% or more shareholding;
4. Combinations taking place entirely outside India which, have insignificant local nexus
and effects on markets in India.

Mergers are subject to review because of their potential adverse effect on competition in the
relevant market. Such adverse effect could be the result of a unilateral conduct (exercise of
dominance) or of coordinated conduct between two or more enterprises facilitated by the
merger. Control of either type of conduct is prospective and aimed at preventing such
conduct post-merger.

Effect of merger on competition is thus classified into two broad categories: unilateral effects
and coordinated effects.

Unilateral Effects: When a merged enterprise gains sufficient market power to enable it to
behave independently of market forces, such conduct results in ‘unilateral’ effect on
competition. This happens when the rivals in the market are not able to increase output in
response to a unilateral increase in price by the merged enterprise. It can also occur when the
products are differentiated and are not close substitutes of each other.

Coordinated Effects: The anti-competitive effect of a merger is termed ‘coordinated’ when

it facilitates collusive behaviour, either due to express agreement among competitors, as in

28
See: The Combination Regulations 2011 [The Competition Commission of India (Procedure in regard to the
Transaction of business relating to combination) Regulation 2011]. Also see: Competition Laws in India: An
Overview, Kochhar & Co., http://www.kochhar.com/pdf/Rationale%20For%20Competition%20Laws.pdf,
visited on: 18-03-14.
Note: The CCI has further amended the Combination Regulations on April 4, 2013 with a view to
simplify the filing requirements and bring about greater certainty in the application of the Act and the
Regulations. And as per the recent amendment-
1. The Combination Regulations now do not require a notice to be filed for acquisition of shares or voting
rights of companies, if the acquisition is less than 5% of the shares or voting rights of the company in a
financial year, where the acquirer already holds more than 25% but less than 50% of the shares or
voting rights of the company.
2. To significantly reduce compliance requirements, the provision for giving notice is now dispensed for
mergers/amalgamations involving two enterprises, where one of the enterprises has more than 50%
shares or voting rights of the other enterprise. Similarly, the requirement of giving notice is also
dispensed for merger or amalgamation of enterprises in which more than 50% shares or voting rights in
each of such enterprises are held by enterprise(s) within the same group.
3. To provide clarification on the nature of intra-group acquisitions for which notice has to be given, Item
8 of Schedule I, has been amended to state that the relaxation would not apply, where the acquired
enterprise is jointly controlled.
4. To avoid repetition and to have one category of exemption for acquisition of certain current assets like
stock-in-trade, raw materials etc., Item 5 and Item 9 of Schedule I, have been clubbed and provided as
one category under Item 5.
 13

cartels, or due to tacit coordination by competitors that have similar effects, irrespective of
whether the coordination is legal or not. Markets that are highly concentrated make such
coordination easy. Product markets that are homogenous are prone to such coordination.

Evaluation of ‘Appreciable Adverse Effect on Competition’: The Competition Act, 2002,

envisages appreciable adverse effect on competition in the relevant market in India as the
criterion for regulation of combinations. In order to evaluate appreciable adverse effect on
competition, the Act empowers the commission to evaluate the effect of Combinations on the
basis of factors mentioned in sub-section (4) of section 20. These factors are as follows29:

(Factors to be considered by the Commission while evaluating appreciable adverse effect of

Combinations on competition in the relevant market)

1. Actual and potential level of competition through imports in the market;

2. Extent of barriers to entry into the market;
3. Level of concentration in the market;
4. Degree of countervailing power in the market;
5. Likelihood that the combination would result in the parties to the combination being
able to significantly and sustainably increase prices or profit margins;
6. Extent of effective competition likely to sustain in a market;
7. Extent to which substitutes are available or are likely to be available in the market;
8. Market share in the relevant market, of the persons or enterprise in a combination,
individually and as a combination;
9. Likelihood that the combination would result in the removal of a vigorous and
effective competitor or competitors in the market;
10. Nature and extent of vertical integration in the market;
11. Possibility of a failing business;
12. Nature and extent of innovation;
13. Relative advantage, by way of the contribution to the economic development, by any
combination having or likely to have appreciable adverse effect on competition;
14. Whether the benefits of the combination outweigh the adverse impact of the
combination, if any.

To understand the jurisprudence as to AAEC it is pertinent to take note of the following:

In the case of the Board of Trade of the City of Chicago v. United States30, it was held:

If the expression “appreciable adverse effect on competition” is not defined abstractly or in

general terms in the Competition Act, every case has to be examined individually and facts
are to be considered peculiar to the business condition before and after the restraint was
imposed, the nature of restraint and its effect- actual or probable, as to the competition
generally prevailing in the relevant market.

29
See: Combination Regulations, www.cci.gov.in/images/media/Advocacy/combinations2012.pdf, Visited on:
17-03-2014
30
246 U.S. 231
 14

Also- in the case of, Haridas Exports v. All India Float Glass Manufacturers Association31,
it was held, the words “adverse effect on competition” embraces acts, contracts, agreements
or combinations which operate to the prejudice of the public interests by unduly restricting
competition or unduly obstructing due course of trade. Public interest is the first
consideration. It does not necessarily mean interest of the industry.

It is interesting to take note of the decision rendered by the U.S. Supreme Court in the case of
Brown Shoe Co. v. United States32, here, the SC prohibited a merger under Section 7 of the
Clayton Act, 1914 between two shoe manufacturers stating that the paramount issue in the
case was to protect small businesses against potential abuses of power by larger firms, despite
acknowledging that the merger would allow the firms to ‘market their own brands at prices
below those of competing independent retailers’.33 Hence, the courts may apply the principles
of judicial balancing and thereby may give more regards to one criteria pertaining to AAEC
over the others.

Case Studies:

It shall be pertinent to take note of the Mahindra-CIE Combination as so approved by the

CCI. On July 12, 2013, CIE Group of Companies (hereafter, CIE) and certain Mahindra
Group of Companies (hereafter, Mahindra) filed a notice under Section 6(2) of the Act with
regards to a proposed combination. As a consequence of the combination, CIE would control
approximately 45-52% stake in the post-resultant entity, Mahindra CIE Automotive Limited.
Mahindra & Mahindra (M&M) would also hold approximately 20% stake in Mahindra-CIE.
The transaction involved multiple agreements and stages but the trigger documents, i.e.
documents whose execution triggers a Section 6(2) pre-merger notification requirement, were
executed on June 15, 2013.

CCI examined the proposed combination in light of the criteria given in Section 20(4) of the
Act and made the following observations-

(i) CIE had no presence or investment in India, either directly or indirectly, and was
not engaged in any activity that either competed with, or was vertically related to,
the business proposed to be acquired by way of the proposed combination.
(ii) The proposed combination is not between two existing players in the relevant
market.
(iii) Post-combination, M&M would still hold 20% of the equity in Mahindra CIE and,
(iv) Technologies used by Mahindra would continue to be used by Mahindra CIE post-
combination.

Based on the aforementioned observations, CCI found no likelihood of any appreciable

adverse effect on competition within the relevant market in India and approved the proposed
combination under Section 31(1) of the Act.

31
(2002) 111 Comp. Cas. 617 (SC)
32
370 U.S. 294 (1962)
33
See: Maher M. Dabbah, International and Comparative Competition Law, Cambridge University Press, First
Edition 2010, Chapter 5: U.S. Competition Law Regime, p.253
 15

Also, in May 2012, the CCI approved the RIL’s stake buy in Network 18.34 A notice was
filed by Independent Media Trust relating to a series of inter-connected and inter-dependent
acquisitions intended to acquire control over Network18 Group companies by Reliance
Industries Limited.

The Commission observed that the subscription to Zero Coupon Optionally Convertible
Debentures (ZOCDs) (which could be converted into equity shares of the target enterprises,
at any time before the expiry of ten years from the date of acquisition) confers the acquirer
with the ability to exercise decisive influence over the management and affairs of each of the
target enterprises. This amounted to control for the purposes of the Act. It was also held that
since the acquisition of ZOCDs entitled the holder to receive equity shares of the target
enterprises, the ZOCDs are shares within the meaning of Section 2 (i) (v) of the Act. The
subscription to ZOCDs amounted to acquisition of shares of the target enterprises. CCI held
that subscription to optionally convertible debentures enabling the acquirer to exercise
decisive influence over the management and affairs of a company would amount to
acquisition of control.

The Commission assessed the effect of the combination on the businesses for supply of
televisions channels, event management services and broadband internet services using 4G
technologies and content accessible through such services. It was concluded that the
combination was not likely to give rise to any appreciable adverse effect on competition and
was cleared.

34
See: Combination Filings, Acquisition of Control over Network 18 Group Companies by Reliance Industries
cleared, Fairplay, April- June 2012, Volume 1, p.6, http://www.cci.gov.in/Newsletter/CCI_NL_(1)2012.pdf,
visited on: 19-03-2014. Also see: http://www.thehindubusinessline.com/markets/stock-markets/competition-
panel-approves-rils-stake-buy-in-network18/article3470109.ece, visited on: 19-03-2014
 16

Chapter 3: Procedure for Investigation of Combinations

The procedure for investigation into a combination is set out in section 29 of the Competition
Act, 2002 and Regulation 19 of the Combination Regulations 2011. Merger control can be
divided into two phases:

Phase I: The Competition Commission of India must form a prima facie opinion as to
whether a combination has caused, or is likely to cause an appreciable adverse effect on
competition within the relevant market in India within 30 working days of receipt of the
notification. The time period can be extended by 15 working days in cases where the parties
offer to modify the terms of the combination. The CCI can either decide to approve the
combination within this period or subject it to further investigation. If the CCI forms a prima
facie opinion that a combination is likely to cause, or has caused, an appreciable adverse
effect on competition, it initiates a detailed investigation (Regulation 19(1), Combination
Regulations 2011).

Phase II: The CCI can conduct the investigation itself or direct its Director General to
conduct an investigation. It must take a final decision on whether to approve, modify or reject
the combination within an additional working 180 days, failing which the combination will
be deemed to have approved (section 29(1A) and section 31(11) of the Competition Act,
2002 and Regulation 28(6) of the Combination Regulations 2011).

In forming its prima facie opinion, the CCI can (Regulations 19(2) and (3) of the
Combination Regulations, 2011):

a. Ask parties to the combination to file additional information.

b. Accept modifications proposed by the parties.
c. Ask for information from any other enterprise in relation to a proposed combination.

If CCI is of a prima facie opinion that a combination is likely to cause appreciable adverse
effect on competition, it will issue a show cause notice to the parties to the combination
calling on them to respond within 30 days of the receipt of the notice to explain why an
investigation should not proceed [Section 29(1) of the Competition Act, 2002].

After receipt of the response to the notice to show cause from the parties, the CCI can decide
to call for a report from the Director General (Regulation 20(1) of the Combination
Regulations 2011). Within seven working days of the receipt of the parties’ response or
receipt of the DG’s report (whichever is later), the CCI will direct the parties to publish
details of the combination to the public within a further ten working days (Section 29(2) of
the Competition Act, 2002).

The CCI can invite affected or likely to be affected parties or members of the public to file
written objections to the combination within 15 working days from the date of publication of
details of the combination (Section 29(3) of the Competition Act, 2002).

The CCI can call for additional information from the parties to the combination within 15
working days of the expiry of the time for filing objections by affected parties or members of
 17

the public. The parties must file additional documents within a further 15 days (Section 29(4)
and (5) of the Competition Act, 2002).

Once it has received the requested information, the CCI must deal with the case within 45
working days (Section 29(6) of the Competition Act, 2002).

In short:

The procedure for investigating a Combination, comprise of three steps-

1. A relevant market35 is identified according to the definition accorded under the Act,
this entails identifying both the relevant product market36 as well as the relevant
geographic market37.
2. The Combination is scrutinised to determine whether the combination has an
appreciable adverse effect on competition in the relevant market. The criteria for such
an analysis are laid down under Section 20(4) of the Act.
3. On the basis of (1) and (2), the Commission decides whether the combination should
be approved, rejected or approved with modifications to the combination. The
modifications to the Combinations are made on the basis of how the anti-competitive
effects could be minimised or eliminated.

Timelines: The Competition Act, 2002 provides a time period of 210 days to CCI to take a
decision on a Combinations filing. Since time is a crucial element in Combination cases, a
provision to reduce the time period to one hundred and eighty days on best endeavour basis
has been included in the Combinations Regulations. The Commission has to form a prima
facie opinion within thirty days as to whether the Combination is likely to cause an
appreciable adverse effect on competition. In pursuance of this provision, most filings are
likely to be approved in this shorter time frame. Only few filings with serious competition
concerns are likely to go beyond this period to the second stage of investigation. These will
be automatically cleared at the end of 210 days, if no order is passed.

35
As per section 2(r) of the Competition Act, 2002, “relevant market” means the market which may be
determined by the Commission with reference to the relevant product market or the relevant geographic market
or with reference to both the markets.
36
As per section 2(t) of the Competition Act, 2002, “relevant product market” means a market comprising all
those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of
characteristics of the products or services, their prices and intended use.
37
As per section 2(s) of the Competition Act, 2002, “relevant geographic market” means a market comprising
the area in which the conditions of competition for supply of goods or provision of services or demand of goods
or services are distinctly homogenous and can be distinguished from the conditions prevailing in the
neighbouring areas.
 18

Procedure for investigation of Combinations38:

Filing of
Combination
Notice

Review of
Notice

Combination Detailed inquiry is

Combination
cleared within 30 launched
deemed to be
days
cleared if no order
passed within 210
days

Inquiry Report
Considered by the
Commission

Combination Combination Combination

approved approved with not approved
Modifications

38
See: The Competition Commission of India, Newsletter: Fair play, Volume 7, October to December 2013,
p.28, http://www.cci.gov.in/Newsletter/nl7.pdf, Visited on: 16-03-2014
 19

Remarks39:

Certain transactions that meet a specified financial threshold are referred to as combinations
and must be notified to the CCI and are subject to review by the CCI for possible adverse
effect on competition. Such transactions cannot be completed until the CCI has explicitly
approved the transaction. The transactions referred to here may be in the nature of acquisition
of shares, voting rights, control over assets, mergers and de-mergers and amalgamations that
meet the prescribed financial thresholds.

For example: In March, 2013, the CCI approved British liquor company Diageo PLC’s offer
to buy a majority share in United Spirits, an Indian company. The CCI said the relevant
geographic market was the whole of India. As to product market, the probe focused on wine
and branded spirits. CCI observed that United Spirits and Diageo are mostly in different
price/quality categories so there is little competitive overlap. In the whiskey market, where
the two companies are close competitors, the CCI observed there are other players with
multiple brands effectively competing in the market.

While the CCI has been relatively quick to review and approve mergers, failure to file has
resulted in penalties and many times of a considerable sum. CCI does take seriously instances
where companies fail to file, or make a timely filing with the Commission. It is important for
companies doing business in India, or purchasing Indian assets (even indirectly) to be aware
of the reporting thresholds. In fact, there are over 100 countries with competition agencies
and filing requirements, so careful consideration must be given to worldwide filing
requirements.

39
See: Robert E. Connolly, Nisha Menon & Joywin Mathew, India’s Competition Act takes shape with
enforcement actions and appeals: Key Cases & Key Points for International Companies, Antitrust Update-
DLA PIPER, 21 November 2013, http://www.dlapiper.com/india-s-competition-act-takes-shape-key-cases-key-
points/, Visited on: 14-03-2014
 20

Chapter 4: Regulation of Combinations- Order of Commission on Certain

Combinations, Remedies under the Act & Appeals

Order of Commission on Certain Combinations40-

Section 31(1) of the Act, provides that where the Commission is of the opinion that any
combination does not, or is not likely to, have an appreciable adverse effect on competition, it
shall, by order, approve that combination including the combination in respect of which a
notice has been given under Section 6(2).41

Section 31(2) provides that where the Commission is of the opinion that the combination has,
or is likely to have, an appreciable adverse effect on competition it shall direct that the
combination shall not take effect.

Section 31(3) provides that where the Commission is of the opinion that the combination has,
or is likely to have, an appreciable adverse effect on competition but such adverse effect can
be eliminated by suitable modification to such combination, it may propose appropriate
modification to the combination, or to the parties to such combination.

Section 31(4) provides that the parties, who accept the modification proposed by the
commission under Section 31(3), shall carry out such modification within the period
specified by the Commission.

Section 31(5) provides that if the parties to the combination, who have accepted the
modification under Section 31(4), fail to carry out the modification within the period
specified by the Commission, such combination shall be deemed to have an appreciable
adverse effect on competition and the Commission shall deal with such combination in
accordance with the provisions of the Act (the Competition Act, 2002).

Section 31(6) provides that if the parties to the combination do not accept the modification
proposed by the Commission under Section 31(3), such parties may, within 30 working days
of the modification proposed by the Commission, submit amendment to the modification
proposed by the Commission under the sub-section.

Section 31(7) provides that if the Commission agrees with the amendment by the parties
under Section 31(6), it shall, by order, approve the combination.
40
See: Avtar Singh, The Competition Law, Eastern Book Company, First Edition 2012, Chapter 4: Duties,
Powers and Functions of Commission, p.209
41
Jet-Airways and Etihad Airways combination was approved by the CCI, vide majority order dated November
12, 2013. Jet and Etihad filed a joint notice with CCI for the acquisition of 24 percent equity stake and certain
other rights in Jet by Etihad pursuant to an Investment Agreement (IA), a Shareholders’ Agreement (SHA) and a
Commercial Cooperation Agreement (CCA). The Parties entered into a composite combination comprising inter
alia the IA, SHA and the CCA with the common/ultimate objective of enhancing their airline business through
joint initiatives. The effect of the said agreements including the governance structure envisaged in the CCA
established Etihad’s joint control over Jet, more particularly over the assets and operations of Jet. The
combination was approved under sub-section (1) of Section 31 of the Act. However, CCI observed that the
approval was granted pursuant to the underlying competition assessment based upon the information provided
by the Parties, in the notice given under Section 6(2) of the Act (as modified and supplemented from time to
time). The CCI further observed that the approval is not to be construed as immunity in any manner from
subsequent proceedings before the Commission for violations of other provisions of the Act.
 21

Section 31(8) provides that if the Commission does not accept the amendment submitted
under Section 31(6), then, the parties shall be allowed a further period of 30 working days
within which such parties shall accept the modification proposed by the Commission under
Section 31(3).

Section 31(9) provides that if the parties fail to accept the modification proposed by the
Commission within 30 working days referred to in Section 31(6) or within a further period of
30 working days referred to in Section 31(8), the combination shall be deemed to have an
appreciable adverse effect on competition and be dealt with in accordance with the provisions
of this Act.

Section 31(10) provides that where the Commission has directed under Section 31(2) that the
combination shall not take effect or the combination is deemed to have an appreciable
adverse effect on competition under Section 31(9), then, without prejudice to any penalty
which may be imposed or any prosecution which may be initiated under this Act [The
Competition Act, 2002], the Commission may order that the following shall not be given
effect to:

a. The acquisition referred to in Section 5(a); or

b. The acquiring of control referred to in Section 5(b); or
c. The merger or amalgamation referred to in Section 5(c).

The Commission may, however, if it considers appropriate, frame a scheme to implement its
order under this sub-section.

Section 31(11) provides that if the Commission does not, on the expiry of a period of 210
days from the date of notice given to the Commission under Section 6(2), pass an order or
issue direction in accordance with the provisions of Section 31(1) or Section 31(2) or Section
31(7), the combination shall be deemed to have been approved by the Commission.

Explanation- For the purposes of determining the period of 210 working days the period of
30 working days specified in Section 31(6) and a further period of 30 working days specified
in Section 31(8) shall be excluded.

Section 31(12) provides that where any extension of time is sought by the parties to the
combination, the period of 90 working days shall be reckoned after deducting the extended
time granted at the request of the parties.

Section 31(13) provides that where the Commission has ordered a combination to be void,
the acquisition or acquiring of control or merger or amalgamation referred to in Section 5,
shall be dealt with by the authorities under any other law for the time being in force as if such
acquisition or acquiring of control or merger or amalgamation had not taken place and the
parties to the combination shall be dealt with accordingly.

Section 31(14) provides that nothing contained in this Chapter (i.e. Chapter IV of the Act)
shall affect any proceeding initiated or which may be initiated under any other law for the
time being in force.
 22

Remedies-

Most of the possible/anticipated anti-competitive effects of Combination can be remedied

without holding back the Combination itself. The CCI has specific power to propose and
accept modifications to combinations in order to avert an appreciable adverse effect on
competition in the relevant market. Furthermore, the CCI may appoint ‘agencies’ to oversee
the implementation of such modifications or remedies where it considers that they required
supervision.

Combination analysis consists of assessment of the likely anti-competitive effect of the

merger under analysis and how such effect could be minimised or eliminated. Prohibition is
considered only when remedies are either not available or not feasible.

Remedies can be either structural or behavioural. Although behavioural remedy is

preferable, its implementation and monitoring is difficult. On the other hand, structural
remedy would entail requiring the combining enterprises to make structural adjustment which
could be in the form of sale of assets, divestment of a division or a unit or creation or
strengthening competitors through, for example, licensing of an Intellectual Property Right.

Appeals-

The Central Government has notified the Competition Appellate Tribunal (COMPAT) to hear
and dispose of appeals against any direction issued or decision made or order passed by the
Commission under respective sections of the Act, such as orders relating to notification of
combination, inquiry by the Commission and penalties.42

An appeal has to be filed within 60 days of receipt of the order/direction/decision of the

Commission.

42
See: Section 53A of the Competition Act, 2002- Establishment of Appellate Tribunal.
 23

Conclusion:

Competition law (or antitrust law) is generally taken to refer to the laws that regulate private
anti-competitive conduct. Although, it is commonly said that competition laws are directed at
private commercial activities, a number of states including India apply the same rules to
government-owned business enterprises. This, however, is by no means a universal practice.
Additionally, competition law does not normally have constitutional status and hence its
content is not insulated from government interference.43

Competition laws in India are aimed to imbibe the social and economic philosophy enshrined
in the Directive Principles of State Policy contained in the Constitution44. The mandate to
draw up a policy that prevents the concentration of wealth and means of production to the
common detriment can not only be located in the Constitution but also in the Act which aims
to prevent anti-competitive practices. Amongst the principal kinds of anti-competitive
behaviour the Act prohibits are combinations resulting in an appreciable adverse effect on
competition (‘AAEC’) within the relevant market in India. The regulation of Combinations in
India is to take place in line with Section 5 & 6 of the Competition Act, 2002 read with the
Combination Regulations 2011.45

As on 4 March 2011, the Government of India (GOI) issued notifications relating to, inter
alia, bringing into effect from 1 June 2011 onwards the merger control regime in India and
raising the asset and turnover thresholds provided in Section 5 of the Competition Act, and
introduced certain exemptions. Additionally, on 11 May 2011, the CCI issued the
Competition Commission of India (Procedure in regard to the transaction of business relating
to combination) Regulations 2011. On 23 February 2012, just 8 months into the merger
control regime, the Regulations were amended through the Competition Commission of India
(Procedure in regard to the transaction of business relating to combination) Amendment
Regulations 2012- with a view of clarifying and addressing concerns and gaps which were
identified in the first few months of the regime. The Commission further amended the
Combination Regulations 2011 on 4 April 2013, with a view to simplify the filing
requirements and bring about greater certainty in the application of the Act and the
Regulations.46

43
See: Vijay K. Singh, Competition Law and Policy in India: The journey in a decade, NUJS Law Review,
October-December 2011, 4 NUJS L. REV. 523(2011), p.523- 566
44
See: Article 38 of the Constitution of India, 1950. The MRTP Act, 1969, owes its existence to the provision
provided under Article 39(c) of the Constitution of India, which provided that the States shall strive to secure
that the operation of the economic system does not result in the concentration of wealth and means of
production to the common detriment. The preamble to the MRTP Act rests on this very provision of the
Constitution of India.
45
See: Tanaya Sanyal & Sohini Chatterjee, Combination Control: Strengthening the Regulatory Framework of
Competition law in India? NUJS Law Review 2012,
http://www.nujslawreview.org/pdf/articles/2012_3/07_tanaya_&_sohini.pdf, visited on: 18-03-2014.
46
See: Shweta Shroff Chopra & Harman Singh Sandhu (Amarchand Mangaldas), India: Merger Control,
Global Competition Review, The Asia-Pacific Antitrust Review 2013,
http://globalcompetitionreview.com/reviews/51/sections/175/chapters/1972/india-merger-control/, visited on:
19-03-2014
 24

It is by far necessary to read the Competition Act, 2002 with the Combination Regulations,
2011 (as amended from time to time), along with the necessary statutes in the nature of the
Foreign Exchange Management Act, 1999 and the Income Tax Act, 1961. Besides, the
Securities and Exchange Board of India (SEBI) has issued guidelines to regulate mergers and
acquisitions. The SEBI (Substantial Acquisition of Shares and Take-overs) Regulations, 1997
and its subsequent amendments aim at making the take-over process transparent, and also
protect the interests of minority shareholders.47

Exploring the premise of section 5 and section 6 of the Competition Act, 2002-

Merger and Acquisition Deal

Analysis as Combination-
Section 5 of the Act

Not Applicable

Applicable

Whether exemption is Proceed with Deal

available? Closure

Yes

No

File notice with CCI

Short Form To call for more details Long Form

Deal Reject* Approval of CCI

Approval of CCI
No
No
Yes Yes

47
Supra 22
 25

*Grounds for rejection- If combination causes appreciable adverse effect on competition; or

modifications to combination sought by CCI are not carried out, etc.

Section 6 of the Competition Act, 2002 inter alia provides that no person or enterprise shall
enter into a combination which causes or is likely to cause an appreciable adverse effect on
competition within the relevant market in India and such a combination shall be void.

Short Form and Long form48: The Combination Regulations 2011 set out three different
forms for filing a combination notification:

 Form I (short form): Combination notifications must usually be filed in Form I (Regulation
5(2)).
 Form II (long form): The parties to the combination have the option to give notice in Form
II. Form II is preferred where (Regulation 5(3)):
o The parties to the combination either individually or jointly have a market share after
combination of more than 25% in the relevant market, in the case of any vertical overlaps; or
o The parties to the combination have a combined market share after combination of more than
15% in the relevant market, in the case of any horizontal overlaps.
 Form III. This form is for filing details of an acquisition by a public financial institution,
foreign institutional investor, bank or venture capital fund, under any covenant of a loan or
investment agreement. It must be filed within seven days of the date of acquisition. The
acquisition need only be notified, approval is not required.

Under section 31 of the Competition Act, broadly if the CCI opines that the Combination-

a. Does not or is not likely to have an appreciable adverse effect on competition, it

would order approval of the combination.
b. Is or is likely to have an appreciable adverse effect on combination, it would order
that the combination shall not take effect.
c. Is or is likely to have an appreciable adverse effect on combination but such an
adverse effect can be eliminated by suitable modification of such combination, the
CCI may suggest appropriate modification to the combination for approval by the
parties. CCI, in such case would pass appropriate order based on response received
from the parties to the combination.

The pillars of Competition Law in India, primarily are- the anti-competitive agreements;
abuse of dominance; regulation of combinations and competition advocacy. The provisions of
Competition Act could have implications on the way business is carried out. The provisions
relating to anti-competitive agreements and abuse of dominant position are for protection of
consumer interests and enhancing competition in the market place. Similarly, the provisions
relating to combinations are to ensure that a combination does not create an appreciable
adverse effect on competition. It is a necessity to understand applicability and implications of

48
See: G.R. Bhatia, Luthra & Luthra Law Offices, Competition Law in India: Overview, Practical Law, 1 June
2013, http://uk.practicallaw.com/0-501-2861, visited on: 20-03-2014
 26

these provisions to one’s business as the cost of non-compliance could be too steep and
detrimental.49

An Expert Committee headed by Dhanendra Kumar (formerly Chairman of the Competition

Commission of India) was set up to draft a National Competition Policy document and
suggest amendments to the Competition Act 2002. The draft National Competition Policy
suggested by the committee is under consideration by the Government of India. Based on the
committee's recommendations, the Government introduced the Competition (Amendment)
Bill, 2012. This has been referred to a Standing Committee of Parliament to examine and
report. The Standing Committee report is awaited.

49
See: The Competition Act, 2002, Deloitte- February 2012, https://www.deloitte.com/assets/Dcom-
India/Local%20Assets/Documents/Tax%20documents/Competition%20Act,%202002.pdf, Visited on: 18-03-
2014
 27

BIBLIOGRAPHY:

STATUES REFERRED-

1. The Constitution of India, 1956

2. The Monopolies and Restrictive Trade Practices Act, 1969
3. The Competition Act, 2002
4. The Competition Amendment Act, 2009
5. The Companies Act, 1956
6. The Companies Act, 2013
7. The Sherman Act, 1890- U.S.
8. The Clayton Act, 1914- U.S.
9. The Federal Trade Commission Act, 1914- U.S.
10. The Robinson-Patman Act, 1936- U.S.
11. The Restrictive Practices Act, 1956- U.K.
12. The Competition Act, 1998- U.K.
13. The Enterprise Act, 2002- U.K.

BOOKS REFERRED-

1. Richard Whish & David Bailey, Competition Law, Oxford University Press, Seventh
Edition
2. Maher M. Dabbah, International and Comparative Competition Law, Cambridge
University Press, First Edition 2010
3. Avtar Singh, The Competition Law, Eastern Book Company, First Edition 2012,
Chapter 4: Duties, Powers and Functions of Commission
4. Siddharth Bawa, Law of Competition in India, Allahabad Law Agency, First Edition
2005, Chapter III: Prohibition of Certain Agreements, Abuse of Dominant Position
and Regulation of Combinations
5. T.Ramappa, Competition Law in India: Policy, Issues & Developments, Oxford
University Press, Third Edition
6. Krishan Keshav & Divya Verma, Competition and Investment Laws in India, Singhal
Law Publications, Chapter 2: Prohibition of Agreements, Abuse of Dominant Position
and Regulation of Combinations
7. Suzzane Rab, Indian Competition Law: An International Perspective, Wolters Kluwer
(India) Pvt. Ltd.

ONLINE ARTICLES REFERRED-

1. Rajkumar Dubey, Indian Competition Act: An Overview, 27 July 2005,

http://www.mondaq.com/india/x/33971/Antitrust+Competition/Indian+Competition+
Act+An+Overview, Visited on: 07-03-2014
2. Competition Commission of India, Regulation of Combinations,
http://www.cci.gov.in/index.php?option=com_content&task=view&id=34, Visited
on: 03-03-2014
 28

3. Regulation of Combination,
http://arthapedia.in/index.php?title=Regulation_of_Combinations, Visited on: 14-03-
14
4. www.investopedia.com/terms/a/amalgamation.asp, Visited on: 17-03-2014
5. Regulation notified by the Competition Commission of India: The Competition
Commission of India (Procedure in regard to the Transaction of business relating to
combination) Regulation 2011 (No. 3 of 2011).
See:http://www.cci.gov.in/images/media/Regulations/CCI_Combination_Regulations
_as_amended_upto_23_02_2012.pdf, Visited on: 15-03-2014
6. Competition Laws in India: An Overview, Kochhar & Co.,
http://www.kochhar.com/pdf/Rationale%20For%20Competition%20Laws.pdf, visited
on: 18-03-14.
7. Combination Regulations,
www.cci.gov.in/images/media/Advocacy/combinations2012.pdf, Visited on: 17-03-
2014
8. Combination Filings, Acquisition of Control over Network 18 Group Companies by
Reliance Industries cleared, Fairplay, April- June 2012, Volume 1, p.6,
http://www.cci.gov.in/Newsletter/CCI_NL_(1)2012.pdf, visited on: 19-03-2014.
9. http://www.thehindubusinessline.com/markets/stock-markets/competition-panel-
approves-rils-stake-buy-in-network18/article3470109.ece, visited on: 19-03-2014
10. The Competition Commission of India, Newsletter: Fair play, Volume 7, October to
December 2013, p.28, http://www.cci.gov.in/Newsletter/nl7.pdf, Visited on: 16-03-
2014
11. Robert E. Connolly, Nisha Menon & Joywin Mathew, India’s Competition Act takes
shape with enforcement actions and appeals: Key Cases & Key Points for
International Companies, Antitrust Update- DLA PIPER, 21 November 2013,
http://www.dlapiper.com/india-s-competition-act-takes-shape-key-cases-key-points/,
Visited on: 14-03-2014
12. Tanaya Sanyal & Sohini Chatterjee, Combination Control: Strengthening the
Regulatory Framework of Competition law in India? NUJS Law Review 2012,
http://www.nujslawreview.org/pdf/articles/2012_3/07_tanaya_&_sohini.pdf, visited
on: 18-03-2014.
13. Shweta Shroff Chopra & Harman Singh Sandhu (Amarchand Mangaldas), India:
Merger Control, Global Competition Review, The Asia-Pacific Antitrust Review
2013,
http://globalcompetitionreview.com/reviews/51/sections/175/chapters/1972/india-
merger-control/, visited on: 19-03-2014
14. The Competition Act, 2002, Deloitte- February 2012,
https://www.deloitte.com/assets/Dcom-
India/Local%20Assets/Documents/Tax%20documents/Competition%20Act,%202002
.pdf, Visited on: 18-03-2014
15. Competition laws in India- Analysis & Comparison, Impact of competition laws on
domestic and foreign M&A, takeovers, JVs & like alliances, India Juris,
http://www.indiajuris.com/comlaw.pdf, visited on: 20-03-2014
 29

16. G.R. Bhatia, Luthra & Luthra Law Offices, Competition Law in India: Overview,
Practical Law, 1 June 2013, http://uk.practicallaw.com/0-501-2861, visited on: 20-03-
2014

View publication stats