Combination Regulations

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sixth amendment to competition law india

In an attempt to further streamline the merger control process, the Competition Commission of India (CCI) has for the sixth time[1] since the introduction of the merger control regime in India, amended the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (Combination Regulations).

The amendments to the Combination Regulations, notified on 9 October 2018(Amendment Regulations), reiterate the CCI’s constant endeavour to bring greater clarity and transparency to the merger control process.
Continue Reading Sixth Set of Amendments to the Combination Regulations

The Competition Commission of India (CCI) has, for the sixth time since the introduction of the merger control regime in India, proposed amendments (Proposed Amendments) to the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (Combination Regulations).

The Combination Regulations are the principal regulations governing the merger notification process in India.[1] Some of the changes proposed by the CCI seem to be aimed at addressing issues that have arisen in the implementation of the merger control regime over the past couple of years whereas others seek to incorporate procedures that are already being followed by the CCI in practice. The changes, currently in draft form while the CCI seeks stakeholder views , are highlighted in brief below.
Continue Reading CCI Proposes Amendments to Combination Regulations

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