Nisha Kaur Uberoi, R. Shyam Khemani, Cyril Shroff, Oct 15, 2012
Although India enacted the Competition Act in 2002 (“Act”), various legal challenges delayed its implementation and the Competition Commission of India (“CCI”) was not fully constituted until 2008. The Act came into force in phases, with the provisions regulating anticompetitive agreements and abuse of dominance coming into effect in May 2009, and the merger control provisions and the accompanying Combination Regulations becoming effective in June 2011. Despite having been in effect for less than a year, the CCI has introduced significant substantive and procedural amendments to the Combination Regulations (in February 2012) responding partly to business concerns.
The merger control regime was initially met with resistance from the domestic and international business community expressing apprehensions that the requirements of prior notification to the CCI of proposed transactions would lead to significant delays and adversely impact domestic and foreign investment in India. Also, if the CCI adopted an overly activist stance towards scrutinizing combination/M&A activity, it could prevent the efficient restructuring of the Indian economy-so vitally needed. It became critical for the CCI to demonstrate it would strike a balance between protecting competition and allaying industry’s concerns of heavy regulatory burden due to time delays, information requests, and uncertainty. This review of recent transactions handled by the CCI suggests that many of the early apprehensions about implementation of India’s merger control provisions were misplaced.