Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

The CCI assesses if the concentration causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India (Article 6 of the Competition Act). This assessment implies checking whether any benefits outweigh the adverse effect of the combination. …

Control criteria

The regulation of “combinations” is set forth in Chapter II, Sections 5 and 6, of the Competition Act and in the “Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011” (the "Combinations Regulations"), as amended in August 2019, which detail the procedural rules applicable to the notification of combinations which may have an appreciable effect on competition and exempt specific transactions from the notification obligation.

The Ministry of Corporate Affairs has drafted a Competition (Amendment) Bill, 2022 based on the Competition Law Review Committee's recommandations and a public consultation led in 2020. The Bill has been introduced before the lower house of the Parliament (Lok Sabha) on August 2022 and is being reviewed by a Standing Committee as of October 2022. In substance, the Bill intents to (1) introduce a transaction value criteria to subject some transactions to CCI's review, (2) extend the definition of “relevant market” to include goods and services considered substitutable by suppliers (and not only by consumers under the current definition) and (3) shorten the review timeline from 210 days to 150 days. 

The Competition (amendment) Act, adopted in April 2023, updated the 2002 Competition Act. The Act introduces several new features, and inter alia adapted the thresholds. 

Context

Pursuant to Article 5 of the Competition Act, a combination steams from (i) the acquisition of one or more undertakings or persons, or (ii) a merger or amalgamation of enterprises. Acquisition may be direct or indirect and concern shares, voting rights or assets or control over an undertaking's management or assets. 

The 2023 Amendment codified the CCI's definition of control, stating that it refers to the “ability to exercise material influence, in any manner whatsoever, over the management or affairs or strategic commercial decisions by— (i) one or more enterprises, either jointly or singly, over another enterprise or group; or (ii) one or more groups, either jointly or singly, over another group or enterprise”. 

Concept of concentration

Concentrations must be notified to the CCI if one of the following thresholds is met. 

1) Thresholds applicable to the parties. 

A concentration is to be notified if the acquirer and acquired enterprise jointly have: (i) assets in India worth more than INR 20 billion (US$ 270 million), or (ii) a combined turnover in India of more than INR 60 billion (US$ 811 million); or (iii) worldwide assets worth more than US$ 1 billion including assets in India worth at least INR 10 billion (US$ 135 million); or (iv) a combined worldwide turnover of more than US$ 3 billion including a combined turnover in India of at least INR 30 billion (US$ 408 million).

2) Thresholds applicable to the resulting group.

A concentration is to be notified if the acquirer group, including the target will have: (i) assets in India worth more than INR 80 billion (US$ 1.08 billion) or (ii) turnover in India of more than INR 240 billion ($US 3.24 billion); or (iii) worldwide assets worth more than US$ 4 billion with assets in India of at least INR 10 billion (US$ 135 million); or (iv) worldwide turnover of more than US$ 12 billion including turnover in India of at least INR 30 billion (US$ 405 million).

Transactions in which the target has either assets in India worth less than INR 3,5 billion (US$ 47 million) or an Indian turnover of less than INR 10 billion (US$ 135 million) are exempted from notification.

Furthermore, “parties” are the legal entities directly involved in the transaction documents (Article 5(a)(i)) and the “group” means two or more entities in a position to exercise at least 26% of the voting power in the other entreprise, or appoint more than 50% of its board of directors or control its management or affairs (Article 5).

The Competition (Amendment) Act, 2023 introduces a new threshold known as the “Deal value threshold”. According to the Amendment, transactions valued in excess of INR 2,000 crores (approximately US$ 243.9 million) and where the target has “substantial business operations” in India, must be notified to the CCI. 

The draft Competition Commission of India (Combinations) Regulations, 2023  defines the notion of “value of transaction” and the “substantial business operations”. 

In its Combination Regulation n°4 (Procedure in regard to the transaction of Business relating to Combinations) of 2011, the CCI identified 10 types of transactions “unlikely to have any appreciable adverse effect on competition” which are therefore not ordinarily notifiable: 

1)  An acquisition of less than 25% of shares or voting rights of an enterprise solely as an investment or in the ordinary course of business, not amounting to control; 

2) An acquisition of shares or voting rights of an enterprise by an acquirer which already holds at least 50% shares or voting rights, unless the acquisition results in any change of control; 

3) An acquisition of assets (i) not directly related to the business activity of the acquirer, (ii) undertaken solely as an investment or in ordinary course of business, and which (iii) does not result in acquisition of control, except where the assets being acquired represent substantial business operations in a particular location or for a particular product or service of the enterprise being acquired, irrespective of whether such assets are organized as a separate legal entity or not; 

4) An amended or renewed tender offer made in a combination where a notice has already been filed with the CCI by the party making the offer, prior to making the amended or renewed offer; 

5) An acquisition of stock-in trade, raw materials, stores and spares, and other similar current assets in ordinary course of business;

6) An acquisition of shares or voting rights pursuant to a bonus issue or stock split or consolidation of face value of shares or buy-back of shares or subscription to rights issue of shares, not leading to acquisition of control; 

7) Acquisition of shares or voting rights by a person acting as a securities underwriter or a registered broker of a stock exchange, on behalf of clients, in the ordinary course of business; 

8) An acquisition of shares or voting rights or assets by a person/ enterprise of another person/ enterprise within the same group (intra-group acquisition), except where the acquired enterprise is jointly controlled by enterprises that are not part of the same group; 

9) A merger or an amalgamation of two enterprises where (i) one enterprise has more than 50% shares or voting rights in the other, and/or (ii) 50% or more shares or voting rights in both enterprises are held by enterprise(s) belonging to the same group, provided there is no change from joint control to sole control; 

10) An acquisition of shares, control, voting rights or assets by a purchaser approved by the CCI in accordance with section 31 of the Competition Act. 

Lastly, some sector-specific exemptions can be granted by the Central government for a period of time it determines. As of October 2022, the financial, banking and oil and gas industries follow partly exempted rules. 

Thresholds

The CCI assesses if the concentration causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India (Article 6 of the Competition Act). This assessment implies checking whether any benefits outweigh the adverse effect of the combination.

Global Competition Law

1008. Control criteria

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Les notions juridiques connexes

1008. Control criteria

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise