Regulation of Combinations under Competition Law, 2002.

(Revised Threshold 2016)

-Khushbu KumariAsst. Professor.

Aim of Competition Law, 2002

Establishment of Commission :• To prevent practices having adverse effect on competition,• to promote and sustain competition in markets,• to protect the interests of consumers and to ensure freedom

of trade carried on by other participants in markets, Advocacy – creating awareness.

WHAT IS “COMBINATION” UNDER COMPETITION ACT,2002

• Acquisition of control, shares, voting rights or assets [Section 5(a)]• Acquisition of control by a person over an enterprise where such person

has control over another enterprise engaged in similar or identical businesses [Section 5(b)]

• Mergers and Amalgamations [Section 5(c)] • When to report to the CCI- The combining parties exceed the thresholds set in Section 5 and as

modified by the Government Notifications• Which “combinations” are prohibited/void- Those which cause or are likely to cause “appreciable adverse effect on

competition “ within the “relevant market” in India [Section 6(1) read with Section 20(4)]

THRESHOLDS FOR NOTIFICATION TO CCI* Current thresholds for the purpose of Section 5

of the Act are as follows:Criteria Assets Turnover

Only withinIndia

NoGroup

Rs. 2,000 cr Rs. 6,000cr

Group Rs. 8,000 cr Rs 24,000 cr

Within and

outsideIndia

NoGroup

US $ 1 billion with at least Rs. 1000 cr in India

US $ 3 billion with at least Rs. 3000 cr in India

Group US $ 4 billionwith at least Rs. 1000 cr in India

US$ 12 billionwith at least Rs. 3,000 cr in India

•Assets include intangible assets, for instance, brand value, value of goodwill, or value of copyright, patent, permitted use, collective mark, etc.•Turnover- includes value of sales or services.

4

TRIGGERING EVENTS FOR NOTIFICATION

* 5

If the threshold limits are met, then a “Notice” is required to be given to the CCI , in the “form” and with the “fee” (prescribed in Combination Regulations by CCI) , within 30 days of the occurrence of the following events under Section 6 (2):

Approval of a proposal relating to the merger or amalgamation by the “board of directors” (term explained now in Combination Regulations) of the enterprises concerned. [relates to section 5( c).]

ORExecution of any agreement or “other document” (term explained now in Combination Regulations) for acquisition of shares, control, voting rights or assets [relates to Section 5(a) and 5(b)].

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