Photo of Bharat Budholia

Partner in the Competition Practice at the Mumbai office of Cyril Amarchand Mangaldas. Bharat advises on the full range of competition matters, including cartel enforcement, abuse of dominance, merger control and competition audit and compliance. He can be reached at bharat.budholia@cyrilshroff.com

The Competition Commission of India (CCI), in its order dated 11 July 2018[1], has awarded a 100 per cent reduction in penalty to leniency applicants Globecast India Private Limited (GI) and Globecast Asia Private Limited (GA) (collectively referred to as Globecast), along with their respective responsible office-bearers. It has also awarded a 30 per cent reduction to Essel Shyam Communication Limited (now Planetcast Media Services Limited) (ESCL) along with their responsible officer bearers, in a cartel case in the broadcasting services industry.

This is the latest and the fourth such order of the CCI granting reduction of penalty to applicant(s) under Section 46 of the Competition Act, 2002 (Act) and the Competition Commission of India (Lesser Penalty) Regulations, 2009 (Leniency Regulations).

Continue Reading Fourth Order in Less than Two Years: The CCI’s Leniency Regime Gathers Momentum

In a recently released order, the Competition Commission of India (CCI) has imposed a token penalty of INR 5 lakhs (approx. USD 7800) on ITC Limited (ITC) for its failure to notify a combination. The combination relates to ITC’s acquisition of the trademarks “Savlon” and “Shower to Shower”, along with other related assets, from Johnson & Johnson by way of two separate asset purchase agreements entered into on 12 February 2015.

In its order, the CCI has held that trademarks are assets for the purposes of the Competition Act, 2002 (as amended) (Competition Act). Further, the order also re-emphasises the position that the Indian merger control regime relates to not only an acquisition of one or more enterprises but also acquisition of control, shares, voting rights or assets of another enterprise. In the event the jurisdictional thresholds prescribed under Section 5 of the Act are met, such an acquisition requires prior notification to, and approval from, the CCI.

Continue Reading The CCI Reinforces Trademarks are Assets

* This piece was first published in the November 2017 issue of the Practical Lawyer [(2017) PL (Comp. L) November 86]


Enforced in 2011, the Indian merger control regime envisages an ex-ante assessment by the Competition Commission of India (CCI) of all M&A transactions meeting certain financial thresholds provided in the Competition Act, 2002, as an anticipatory step to avoid potential anti-competitive outcomes such as creation of a monopoly or co-ordinated action by competitors. However, considering the need to avoid filing requirement for certain types of M&A transactions which are not likely to cause an appreciable adverse effect on competition, the CCI, by way of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (Combination Regulations) exempted certain categories of M&A transactions from a notification requirement. One such exemption (provided in Item 1 of Schedule I to the Combination Regulations) deals with minority investments and exempts acquisitions of less than 25% shares, if they are made “solely as an investment” or in the acquirer’s “ordinary course of business”, with a categorical caveat that such transaction should not result in the acquisition of ‘control’ (25% Exemption).

Though the 25% Exemption may, at first glance, seem extremely advantageous to private equity and other financial investors, the verbose riders under Item 1 and various CCI orders, considerably limits its scope. More often than not, acquirers are willing to err on the side of caution and seek the CCI’s approval, to avoid monetary as well as reputational loss. This article highlights a few of the issues that are encountered when determining the applicability of the 25% Exemption and in particular, the phrase “solely as an investment”.

Continue Reading Antitrust Approval in Minority Acquisitions – A Case of Several Ifs and Buts

This piece was first published in the Competition Policy International on August 28, 2017


Introduction

If one looks back at the progress of human kind- one will see that every step forward was always greeted with great scepticism. Inventions and new theories propounded were never accepted easily, for the simple reason that they were not understood well enough. In fact, innovations were always viewed as disruptive ideas. All innovators were ahead of their times and the merit of their ideas was acknowledged only after they were tried, tested and proved to be not only good but also better than the old ones. But time and again history has shown us that old ideas did bow out giving place to the new when their worth was proven, society was benefited and efficiency increased manifold – be it the transformation from doves to the postal system, telegraph, telephone, cellular phones and now the world wide web, that has revolutionized communications. Computers were viewed with great suspicion as they would leave a whole section of people jobless. However, these very same computers created an entirely new industry in the form of the software industry – which is one of the biggest in the world and employs millions today. All of these innovations which seemed disruptive initially have now woven themselves inextricably into the processes of production as well as consumption and have led to great technological advancement and overall economic development. Thus, the relationship between economic development and innovation, in particular disruptive innovation, cannot be overstated.

Continue Reading Disruptive Innovations: CCI’s Progressive Outlook

On 31 October 2017, the Competition Commission of India (CCI) passed cease and desist orders against certain national and regional trade associations of film artists and producers for engaging in practices of controlling/limiting the supply of services and market sharing. Such acts have been held to be in contravention of Sections 3(3)(b) and 3(3)(c) read with Section 3(1) of the Competition Act, 2002 (Competition Act).

Background

Mr. Vipul Shah (Informant), a producer of films, filed an information against Artists’ Associations, comprising the All India Film Employees Confederation, Federation of Western India Cine Employees (FWICE) and its affiliated associations[1], as well as Producers’ Associations, comprising the Indian Motion Picture Producers Association, the Film and Television Producers Guild of India, and the Indian Film and Television Producers Council (Artists’ Associations and Producers’ Associations are collectively referred to as the Opposite Parties). The information alleged a contravention of provisions of the Competition Act on the grounds that:

Continue Reading CCI Reprimands Film Industry Trade Unions for Engaging in Anti-Competitive Behaviour

The Competition Commission of India (CCI) has imposed a cumulative penalty of INR 120 million (approx. USD 1.87 million) on ten coal and sand transporters (Opposite Parties or OPs) for bid-rigging. The OPs were found to have rigged the bids submitted in relation to four tenders for coal and sand transportation floated by Western Coalfields Limited (Informant), a subsidiary of the state-owned monopolist, Coal India Limited.[1]

The information filed with the CCI alleged contravention of the provisions of the Competition Act, 2002 (Competition Act) on the ground that the OPs had quoted identical prices, which were suspiciously higher than the rates quoted for the same jobs in the recent past.

Continue Reading Coal Transporters Penalised for Bid-Rigging

The Ministry of Corporate Affairs, Government of India (MCA), has through a notification published on August 30th, 2017, exempt reconstitution, transfer of whole or any part thereof and amalgamation of nationalised banks under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, from merger control scrutiny for a period of 10 years (Notification).

Continue Reading Nationalized Banks Exempt from Merger Control Scrutiny

The Competition Commission of India (Lesser Penalty) Regulations, 2009 (Leniency Regulations) have been amended by a notification issued on 22 August 2017 (Notification). The Leniency Regulations supplement Section 46 of the Competition Act, 2002, which sets out the statutory provision for grant of leniency in matters involving cartels and enables parties to ‘blow the whistle’ on cartel arrangements and avail up to 100% reduction in penalties.

The amendments have been introduced after nearly seven years since the introduction of the leniency regime in India, addressing substantive issues faced by the industry. The formal amendments are largely in line with the draft amendments issued in March 2017 wherein the Competition Commission of India (CCI) invited comments from various stakeholders.

This update briefly captures the key amendments and the potential implications on the effectiveness of the leniency programme in India.

Continue Reading Leniency Regulations Amended

The latest addition to the string of changes introduced by the Ministry of Corporate Affairs (MCA) this year is an exemption to Regional Rural Banks (RRBs) from the applicability of the merger control regime. The MCA introduced a notification on August 10, 2017 (Notification), which stipulates that Sections 5 and 6 of the Competition Act, 2002 (Act), which relate to regulation of combinations, will not apply to amalgamations of RRBs for which the Central Government has issued a notification under Section 23A(1) of the Regional Rural Banks Act, 1976 (RRB Act). This exemption is applicable for a period of five years, i.e., until August 9, 2022.

The RRB Act was enacted to provide for the incorporation, regulation and winding up of RRBs in order to develop the rural economy and particularly enhance the credit facilities available to marginal farmers, agricultural labourers, artisans and small entrepreneurs. Under section 3(1) of the RRB Act, the Central Government can establish a RRB in any state or union territory, upon a request being made by a bank that proposes to sponsor the RRB.

Continue Reading MCA’s Merger Control Exemption for Regional Rural Banks

Keeping with the slew of changes introduced this year, the Ministry of Corporate Affairs, Government of India (“MCA”) has yet again altered the Indian merger control regime, by doing away with the mandatory 30 day deadline for filings notifications, post the trigger event. This brings the Indian merger control regime in sync with most mature competition law regimes, which do not have a fixed timeline within which a merger notice must be filed with the regulator.

By virtue of its powers under Section 54 of the Competition Act, 2002 (“Act”), which allows the Central Government to exempt the applicability of any of the provisions of the Act for a specified period, the MCA has introduced a notification on June 29, 2017 which exempts an enterprise, from filing a notice within 30 days, for a period of five years, i.e., until June 28, 2022 (“Notification”).

Continue Reading Indian Merger Control – 30 Day Filing Timeline Ceases to Exist!