India’s new competition regime is nearly operational. In March, the CCI and the Competition Appellate Tribunal were fully constituted and on 20th May 2009, sections 3 and 4 related to anti competitive agreement and abuse of dominance were notified by the Competition (Amendment) Act, 2007. However, provisions related to combinations i.e. section 5 of the Act has still not been notified. The framework for merger control has been criticised by practitioners. As per the current framework, all mergers or acquisitions of control, shares, voting rights or assets, or acquisitions of control over enterprises where the acquirer controls another enterprise involved with similar goods or services, which result in either the parties to the transaction, or the group to which the target would belong post-acquisition, exceeding specified asset or turnover thresholds, are defined as combinations.
Prior notice must given to the CCI as per the prescribed format which will then determine whether it causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India. The interpretation of this question is left to its subjective determination.
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