Changes to Indian merger control

The Competition Commission of India (CCI) has introduced changes to Indian merger control with effect from 1 July 2015.  The changes are brought into force through amendments to the Competition Commission of India (Procedure in regard to the transaction of Business relating to Combinations) Regulations, 2011 (Combination Regulations), published on the CCI’s website on 6 July 2015. 

The main changes are the following:

·        A revised Short Form Notice which now requires more information to be supplied.

·        An extended period for review at Phase 1.  The CCI will have 30 working days to arrive at a prima facie opinion which can be extended by a further 15 working days if third party views are sought, resulting in a period of 45 working days for the CCI to arrive at a prima facie opinion at Phase 1.

·        A limitation on the trigger events for a notification.  The CCI has previously fined Tesco for failing to notify within 30 days of its application to the Foreign Investment Promotion Board.  In light of criticism of its practice the CCI has sought to narrow down the trigger events. The CCI has removed the obligation to notify based on communication of an ‘intention to acquire’ to the Central or State Government.  However, communication of such an intention to an Indian statutory authority such as the Reserve Bank of India would still appear to be a trigger event for a notification to the CCI. 

·        A provision enabling the CCI to invalidate a merger filing as incomplete after notification and at any time up to the end of the 210 day statutory review period.

·        A relaxation in the divestiture process meaning that sale to a buyer approved by the CCI will not require additional merger clearance in India by the CCI.

The amendments are rather a hotch-potch of changes.  While some are beneficial (e.g. the relaxation in the divestiture process) others create further uncertainty and increase the information and procedural burdens on parties to transactions which require merger filings in India.

Indian merger control came into effect in June 2011 and since then the Combinations Regulations are amended on an annual basis.  The aim is to address industry concerns and improve the merger control regime in light of experience.  This means that parties whose transactions may need to be filed in India need to keep abreast of the changes as the regime is subject to amendment on a more frequent basis than most international counterparts. 

Suzanne Rab is the author of “Indian Competition Law, an International Perspective” (first published by Wolters Kluwer, May 2012; with a supplement of cartel regulation published in January 2013). The book is  the first-of-its-kind international comparative analysis of the Competition Act 2002 published contemporaneously with the coming into force of Indian competition law and merger control.  Suzanne is also co-author of "Media Ownership and Control: Law, Economics and Policy in an Indian and International Context" (Hart Studies in Competition Law, 2014).