Abdullah Hussain, Aug 27, 2008
In January this year, the yet to be fully-constituted Competition Commission of India (“CCI”) brought out its Draft Regulations relating to (a) its meetings; (b) the procedure in case of investigations pertaining to anticompetitive agreements and abuse of dominance; (c) determination of cost of production in predatory pricing investigations; (d) calling on and the engagement of experts; (e) leniency regulations in case of cartels; and finally, the most eagerly awaited (f) Combinations Regulations relating to mergers and acquisitions. The reason the Combination Regulations were most eagerly awaited was a result of an amendment brought into the Competition Act in September 2007. Although the provisions in the Act relating to combinations remained largely the same, certain small but crucial amendments were made. The most important of these amendments was the introduction of a mandatory notification and suspension regime. This resulted in the Indian trade and industry, which had largely been dormant thus far, creating a furore on the grounds that the amendments would hamper the growth of companies and weaken them against their competitors on the global stage. The requirement to necessarily notify any acquisitions to the CCI and await its approval quite rightly raised some alarm. Particularly, since the provisions as they are framed require transactions with minimal or no nexus to India at all to be notified, as does it require notification regardless of the size of the acquisition. Further, the period for which a combination would have to be kept in suspended animation could extend to 210 days, if not more. These concerns were brought to the attention of the CCI by business houses, professionals, and members of the U.S. Federal Trade Commission (“FTC”) and U.S. Department of Justice (“DOJ”) as well.