Merger Control under Competition Act

Suchismita Pati, NUJS, Kolkata

After the opening of liberalization gates in 1991, the world economy has witnessed profound changes in the market. Corporate reorganizations in the form of mergers and acquisitions are having a positive prospect thereby increasing the competition in the market economy1. Mergers along with amalgamations and acquisitions have been categorized as combinations2under the Indian Competition Act, 20023. The purpose of a merger control regime is to assess, normally prospectively, the net competitive effects of a given transaction and provide for remedies that preserve competition4.

In India, mergers are regulated under the Competition Act, 2002 and also under the Securities and Exchange Board of India Act, 1992 (SEBI Act). With the enactment of the Competition Act in 2002, mergers have also come within the ambit of this legislation. In the Companies Act, 1956 mergers are regulated between companies inter alia to protect the interests of the secured creditors and the SEBI Act tries to protect the interests of the investors. Apart from protecting the interests of private parties, its objectives are different and mutually exclusive. In the Competition Act, 2002, the objective is much broader. It aims at protecting the appreciable adverse effect on trade-related competition in the relevant market in India5.

This paper touches upon the mergers and the adverse effect the mergers cause in the market. It covers the various types of mergers and their adverse effects; procedures that an enterprise must duly follow to have a successful merger in the market. The present Indian Act is quite contemporary to the laws presently in force in the European Community as well as in the United Kingdom6. It also deals with substantive assessment on mergers where US laws, EU laws and India laws. It also touches upon the remedies to anti competition and marks an expression of discontent with the concept of joint venture norms in India. During the research doctrinal method research was conducted and references were taken from books and articles.


 “The fusion of two or more enterprises, through the direct acquisition by one of the net asset of the other or others. A merger is differs from a consolidation in that in the former no new concern is created, whereas in a consolidation a new corporation or entity acquires the net assets of all the combining units.”- Eric L Kohler

Merger or an amalgamation of enterprises is a combination which is forbidden under the law if it causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India7. Section 2 (1B) Income Tax Act, 1961 defines “Amalgamation” as the merger of one or more companies with another company or the merger of two or more companies to form one company (the company or companies which so merge being referred to as the amalgamating company or companies and the company with which they merge or which is formed as a result of the merger, as the amalgamated company) in such a manner that – (i) all the property of the amalgamating company or companies immediately before the amalgamation becomes the property of the amalgamated company by virtue of the amalgamation;

(ii) All the liabilities of the amalgamating company or companies immediately before the amalgamation become the liabilities of the amalgamated company by virtue of the amalgamation;

(iii) Shareholders holding not less than nine-tenths in value of the shares in the amalgamating company or companies (other than shares already held therein immediately before the amalgamation by, or by a nominee for, the amalgamated company or its subsidiary) become shareholders of the amalgamated company by virtue of the amalgamation, otherwise than as a result of the acquisition of the property of one company by another company pursuant to the purchase of such property by the other company or as a result of the distribution of such property to the other company after the winding up of the first mentioned company.

Motives for Mergers

In case of merger, when two companies merge to form a third company or one is absorbed into one or blended with the other, the amalgamation company loses its identity8.

With the changing legal, political, economic and social environments the factors effecting mergers also change9. In general, a company enters into merger agreements during its tough times. The strong companies buy other companies to create a more competitive and cost-efficient company. Because of these potential benefits, target companies often agree to be purchased when they know they cannot survive alone10. The synergy11created leads to additional consumer demand after merger12and better access to facilities, brands, trademarks, technology and employees13.  Although mergers sound easier and convenient compared to internal growth, there are risks in actually realizing the intended benefits of mergers. Moreover, companies with diverse background enter into mergers which often leads to possession of the necessary management and technical and marketing expertise which leads to an increase in market share14.

Classification of Mergers

Concentrations in the form of mergers are broadly classified into two types, namely horizontal mergers, vertical mergers and conglomerate mergers15.

Horizontal Mergers:

A horizontal merger is one between the parties that are competitors at the same level of production and/or distribution of a goods or service, i.e., in the same relevant market16. The merging17parties may realize efficiency gains and in some circumstances this may intensify rivalry and be beneficial for consumers. It eventually result in market concentration as it reduces the number of firms competing in the relevant market. Such mergers give rise to a situation of single firm dominance. The competitive effect of which is also known as the unilateral effect of a merger18. As per the Raghavan Committee, the following issues are required to be considered while assessing the permissibility oh horizontal mergers:

(i)                Determination of the relevant market.

(ii)              Establishing whether the higher concentration in the market resulting from the merger would increase the possibility of collusive or unilaterally determined harmful behavior.

(iii)            Political contestability. Even if no potential entrants are immediately visible, a larger enough price increase could encourage entry.

(iv)            Situation where mergers lead to an uncompetitive outcome which could result in certain ‘efficiencies’ that more than make up for the welfare loss resulting from this.

 Vertical Mergers:

The main objective of such mergers is to ensure the sources of supply19. The process internalizes the benefits of supply chain management and as such cannot be perceived as injurious to competition20. The Committee21besides indicated that the vertical integration may affect the competition under the following:

(i)                Fear of Foreclosure– through vertical mergers, a firm can create captive distribution channels. This will foreclose the rival firms from the market, represented by the captive distribution network.

(ii)              Entry blocking– monopolies can have the ability to prevent the entry of firms into the market. It through integration, firms are able to internalize different levels of production, artificial barriers to entry could be created which indicates a potential entrant’s capital requirement will be high.

(iii)            Price squeezes– vertical mergers and integration internalize the process of production and enable a firm to reduce costs. It is so because the firms choose to bypass market transaction in favour of internal control. Illegality can be determined by, inter alia, characterizing the nature of the market to be served and the leverage on the market which the particular vertical integration creates and the purpose or the intent with which combination was conceived22.

Conglomerate Mergers:

Conglomerate mergers are those mergers which occur between firms that are unrelated by value chain or competition. They can also be explained as a merger between companies which are not competitors and also do not have a buyer seller relationship23. The main motive behind it is to diversify risk as the successful performers would balance the badly performing subsidiaries of the group24.

The Raghavan Commission25came out with grounds of objections:

  • They create deep pockets which enables firms to devastate the rivals;
  • Lower costs below the marginal cost of the industry;
  • Raise barriers to entry;
  • Engage in reciprocal dealing to the disadvantage of the rivals;
  • Eliminate potential competition.

In practice the conglomerate merger category has been subdivided into further classes as follows:

(i)    A product extension merger: It occurs when such firms merge who sell non-competing products but use related marketing channels or production processes;

(ii)  A market extension merger: It is the joining of two firms selling the same product but in separate geographical markets; and

(iii)A pure merger: It is a merger between firms with no relationship of any kind.


Mergers are regulated under Section 5 and 6 of the Competition Act.

Broadly, combination means acquisition of control, shares, voting rights or assets, acquisition of control by a person over an enterprise where such person has direct or indirect control over another enterprise engaged in competing businesses, and mergers and amalgamations between or amongst enterprises when the combining parties exceed the thresholds set in the Act. The thresholds are specified in the Act in terms of assets or turnover in India and outside India26.

The Act prohibits entering into such combinations which causes or is likely to have an appreciable adverse effect on the competition within the relevant market in India and such combination shall be void27. Under the present regime, Competition Commission has investigative powers in relation to combinations28. The Competition Commission is required to have due regard to the factors listed in Section 20(4) include actual and potential level of competition through imports in market, barriers to entry in market, level of combination, degree of countervailing power in the market, likelihood of the combination significantly increasing prices or profit margins, extent of effective competition likely to sustain in a market, substitutes available in the market, market share of person or enterprise individually and as a combination, likelihood of removal of effective competitor, extent of vertical integration in the market, possibility of a failing business, extent of innovation, contribution to economic development , outweighing of adverse impact by benefits of combination.

Threshold under competition act

The laying down of threshold limit eases the pressure of competition authority of inspecting all mergers, as done in mandatory notifying systems and allows the authorities to focus only on most likely mergers to affect transactions. The Act provides for sufficiently high thresholds29in terms of assets/ turnover  for mandatory notification to the merger bench (a part of the Competition Commission of India) as recommended by the High Level Committee30which advised that only big combinations should be placed under the regulations of Competition Act31. The High Level Committee (2000) said that:

“It is extremely important that the law regarding mergers be very carefully framed and the provisions regarding prohibition of mergers be used very sparingly. This is particularly important at the current stage of India’s corporate development. Relative to the size of major international companies, Indian firms are still small. With the opening of trade and Foreign Direct Investment, Indian firms need to go through a period of consolidation in order to be competitive. Any law on merger regulation must take into account of this reality.”

The current thresholds for the combined assets/turnover of the combining parties are as follows:

(i)    Individual: Either the combined assets of the enterprises are more than Rs. 1,500 crores in India or the combined turnover of the enterprise is more than Rs. 4,500 crores in India.  In case either or both of the enterprises have assets/turnover outside India also, then the combined assets of the enterprises are  more  than  US$  750  millions,  including  at  least 750 crores  in  India,  or  turnover  is  more  than  US$ 2250  millions, including at least  2,250 crores in India.

(ii)  Group: The group to which the enterprise whose control, shares, assets or voting rights are being acquired would belong after the acquisition or the group to which the enterprise remaining the merger or amalgamation would belong has either assets of more than Rs. 6000 crores in India or turnover more than Rs. 18000 crores in India.  Where the group has presence in India as well as outside India then the group has assets more than US$ 3 billion including at least Rs. 750 crores in India or turnover more than US$ 9 billion including at least Rs. 2250 crores in India. For this purpose group32means two or more enterprises, which directly or indirectly have:

(i)    The ability to exercise 26 per cent or more of the voting rights in the other enterprise; or

(ii)  The ability to appoint more than half the members of the Board of Directors in the Board of Directors in the other enterprise; or

(iii)The ability to control33the affairs of the other enterprise.

The government has for a period of 5 years exempted “Group” exercising less than fifty per cent of voting rights in other enterprise from the provisions of section 5 of the Act34.

In exercise of the powers conferred by clause (a) of section 5435of the Competition Act, 2002, the Central Government, in public interest has exempted an enterprise, whose control, shares, voting rights or assets are being acquired and it has either assets of the value of not more than Rs. 250 crores in India or turnover of not more than Rs. 750 crores in India from the provisions of section 5 of the said Act for a period of five years.

The turnover shall be determined by taking into account the values of sales of goods or services. The value of assets36shall be determined by taking the book value of the assets as shown in the audited books of account of the enterprise, in the financial year immediately preceding the financial year in which the date of proposed combination falls, as reduced by any depreciation.


Section 6(1) prohibits37a person or enterprise from entering into a combination which causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India. A notice38to the Competition Commission of India regarding mergers39has to be in the prescribed format with the requisite fees40within thirty days of:

(i)                Execution of an agreement or other document for acquisition or acquiring of control;

(ii)  Approval by the board of directors of the enterprises concerned with merger or amalgamation.

The test for approval of the merger41is based on the following:

(i)    The expected impact of the merger on market power and competition in the relevant42market.

(ii)  Given the size and growth of the market and the presence or absence of entry barriers, an assessment of how the market is expected to evolve.

(iii)Does the market of the merging entities overlap? There should be the limited cause for concern in case they do not, unless one of the firm has market power.

(iv)Is the market susceptible to collusive behavior?

Where the parties43to a combination fail to file notice under sub-section (2) of section 6 of the Act, the Commission may under sub-section (1) of section 20 of the Act, upon its own knowledge or information relating to such combination, inquire into whether such a combination has caused or is likely to cause an appreciable adverse effect on competition within India44. Once the commission decides to commence an inquiry into the combination, it shall direct the parties to the combination to file notice in Form II, Schedule II of the combination regulations, duly filled in, verified and accompanied by evidence of requisite fee.


Merger of two companies in the same field may involve reduction in the number of competing firms in an industry and tend to dilute competition in the market45. They generally contribute directly to the concentration of economic power and are likely to lead the merger entities to a dominant position of market power. Such adverse effect could be the result of a unilateral conduct (exercise of dominance) or of coordinated conduct between two or more enterprises facilitated by the merger. Control of either type of conduct is prospective and aimed at preventing such conduct post- merger.

(i)    Unilateral Effects– Single Firm dominance and reduction in number of competing firms reduces effective competition between them and the “lost” competition gives rise to incentive to increase price due to “internalization’ of ‘lost’ sales. (e.g., merger between Coca-Cola and Campa- Cola or Thums-up – false impression of “interbrand competition”).

(ii)  Co-ordinated Effects– Collective Dominance- reduction in effective competition possible if changed market structure is favorable for sustainable tacit collusion, without formal agreements like cartel. (Co-ordination possible in prices, output and capacity expansions).

(iii)Vertical Effects – Generally, efficiency enhancing and pro competitive. However, merger between an upstream supplier and downstream manufacturer may foreclose the source of supply to other downstream competitors or foreclose downstream market to competing up stream suppliers.

(iv)Conglomerate Effects – Mostly pro-competitive but rarely raise concern because of either tie in of complementary products or port folio effect. Highly controversial.

In order to evaluate appreciable adverse effect on competition, the Act empowers the Commission to evaluate the effect of Combination on the basis of factors mentioned in sub section (4) of section 20 which are as follows:

a. Actual and potential level of competition through imports in the market;

b. Extent of barriers to entry into the market;

c. Level of concentration in the market;

d. Degree of countervailing power in the market;

e. Likelihood that the combination would result in the parties to the combination being able to significantly and sustainably increase prices or profit margins;

f. Extent of effective competition likely to sustain in a market;

g. Extent to which substitutes are available or are likely to be available in the market;

h. Market share, in the relevant market, of the persons or enterprise in a combination, individually and as a combination;

i. Likelihood that the combination would result in the removal of a vigorous and effective competitor or competitors in the market;

j. Nature and extent of vertical integration in the market;

k. Possibility of a failing business;

l. Nature and extent of innovation;

m. Relative advantage, by way of the contribution to the economic development, by any combination having or likely to have appreciable adverse effect on competition;

n. Whether the benefits of the combination outweigh the adverse impact of the combination, if any.


A merger transaction would have certain pro-competitive as well as certain anti-competitive effects. Duty of the competition authorities is to balance out these effects, through substantive tests and procedures and determine whether the proposed transaction meets the requirements to be blocked46. It has been determined through series of cases by the European Courts that the burden of proof is on the competition authorities to produce convincing evidence that the transaction is anti-competitive in nature47. There is no presumption for or against any transaction.

In United States, the Clayton Act prohibits transactions that may ‘substantially lessen competition or tend to create a monopoly48.’ Subsequently various guidelines have laid down ‘test of efficiency’, which states that a merger transaction should not be blocked if it increases substantial efficiency in the market49. These guidelines also state that a merger should not be permitted to proceed if it will create or enhance market power or will facilitate its exercise. Merger transactions in US are usually analyzed through the following steps:

(i)          Identification of the relevant product and geographic markets which are likely to be affected by the transaction;

(ii)        Assessment of the market shares of the players involved in transaction and the degree of concentration in the market;

(iii)      Identification of possible anti-competitive activities to be carried out by the resultant entity of the transaction such as predation, barrier to entry, refusal to deal etc, and

(iv)      Acknowledging possible pro-competitive effects and efficiency created through the transaction such as reduction in market prices, consumer welfare etc50.

The European Commission’s Guidelines on Merger Regulation (ECMR guidelines) prohibit any merger transaction which would ‘significantly impede effective competition in common market or in substantial part of it51.’ It lays special importance to check creation or strengthening of dominant position by the resultant entity of the proposed transaction. Similar, to the approach of the US antitrust agencies, these guidelines provide for analysis of the relevant market to be affected by the said transaction and the market shares of the players involved in the transaction. The 2004 amendment to the Merger Regulation of 1989 removed market dominance as the exclusive test and empowered the authorities to block any merger which would ‘significantly impede effective competition’. The guidelines also provide for ‘appraisal criteria’, whereby the authorities also look into a checklist of factors that should guide the Commission, few of them being: interest of consumers, development of technical and economic progress, alternative players and products in the market etc52.

The United Kingdom also follows similar approach in inspecting mergers and uses the Substantial Lessening of Competition (SLC) test in analyzing the pro-competitive and anti-competitive effects of a merger transaction53. The antitrust authorities have laid down various procedures for analyzing merger transaction. The Office of Fair Trading has laid down procedures in the ‘Mergers: Substantive Assessment Guidance’54and the Commission has in ‘Merger References: Competition Commission Guidelines55.’ The guidelines provide for methods for defining market and market infiltration56and inspection into the coordinated or non coordinated effects likely to be caused by the merger, which could lead to SLC and importantly also provide for relevance of efficiencies57. The efficiency test has also been laid down in the Enterprise Act which provides for decision making authorities to consider ‘relevant customer benefits’ from the merger transaction58. A merger may be permitted in spite it causing SLC, if parties are able to prove efficiencies which are demonstrable, merger-specific and likely to benefit consumers59. Benefit to customers would denote lessening of prices, increase of choices, betterment of quality and other analogous benefits60. The OFT guidance and Competition Commission guidelines, also in certain cases recognize the ‘failing-firm defense’, where three conditions are importantly analyzed viz. first, the firm would have to exit the market, if merger transaction does not take place; second, the firm is not in a position to stabilize its operations; and third, there is no other less anti-competitive approach than the merger61.

The Indian Competition which has largely followed the European and UK law prohibits any merger which is likely to cause ‘appreciable adverse effects on competition62.’ The law does not mention rigid modus operandi for inspection of merger transactions. Nonetheless, it does mention various factors to be considered by the competition authorities while analyzing a merger. These factors being similar to those present in the South African law, inter alia provide for consideration of actual and potential level of competition through imports; extent of barriers to entry; the degree of countervailing power in the market; likelihood of increase in market prices by the merged entities; possibility of failing business63. However, the Indian law does not mention about contemplation of factors overtly64, such as effects on employment, competition with international counterparts or historical course of the concerned parties before determining fate of a merger.


Under the ECMR, no filing fees are required to be paid by the parties notifying a concentration to the authorities. However, the authorities can interfere and prohibit a transaction under certain circumstances. Implementing a notifiable merger before clearance has been obtained or after a prohibition decision has been issued would expose the companies concerned to fines of up to 10 per cent of their aggregate annual worldwide group turnover65. The Commission may also impose periodic penalty payments of up to 5 per cent of average daily worldwide group turnover for each day that an infringement persists and fines of up to 1 per cent of aggregate worldwide group turnover may also be imposed in certain circumstances, for example, where misleading or incorrect information is supplied66for non- furnishing of information on combinations, the Commission imposes a mere one percent of the total turnover or the assets, while the European counterparts impose a fine of 10 per cent of the total turnover. Further, for furnishing wrong information or for suppressing material facts the maximum fine imposed is one crore, while under the ECMR the fine imposed is one percent of the total world turnover. In order to ensure stricter compliance and deter parties from providing wrong or misleading information, the Commission must increase the amount of fines imposed67. The Central Government has notified a Competition Appellate Tribunal (COMPAT) to hear and dispose of appeals against any direction issued, decision made or order passed by the Commission under specified sections of the Act, such as orders relating to notification of combination, inquiry by the Commission and penalties.


The per se approach applied in the US with respect of practices such as price-fixing68, market allocation, collusive tendering or bid rigging etc., is the strongest type of probation. An agreement by way of joint ventures is an exception to which provisions to section 3(3) are not applicable, if such agreement increases efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services. The term ‘joint venture’ is a commercial arrangement between two or more enterprises in order to achieve a particular commercial goal, which does not involve co-ordination of competitive behaviour of the parties in the market69.

After the 2004 amendment in the European Community Law, ECMR, provide for ‘full function joint ventures’, whereby only fully functional joint ventures which meet threshold criterion have to be notified to the competition authorities. To fall within the jurisdiction70of the ECMR, three criteria must be satisfied:

(i)    The joint venture results in two or more entities sharing ‘joint control’;

(ii)  The parties’ aggregate and individual turnovers exceed the ECMR thresholds; and

(iii)The joint venture is ‘full function71.

The Indian Competition Law has not dealt with joint ventures except minor inclusions at few places.

The Competition Act, till date does not provide for definition of a joint venture. The Act under section 3(3) provides for applicability of per se rule whereby certain activities such as price maintenance, division of market shares, bid rigging, collusive bidding and other like activities are presumed to be illegal and anti-competitive in nature72. A proposed joint venture transaction may fall within the ambit of section 5 if it met the threshold limits, else, it could as well be challenged under section 3 for an agreement being anti-competitive in nature, hence creating an ambiguity over the status of a proposed joint venture. There exists ambiguity as to the mandatory nature of the notification under Section 5 of the Act if the joint venture is established by way of subscription to the shares of a newly incorporated company. This is because Section 5 of the Act concerns the acquisition of an enterprise and the definition of “an enterprise”73appears to capture an existing business, not a newly created business. Thus, there is scope for argument that a newly incorporated joint venture would not fall within the definition of a combination as it would not be an enterprise “which is or has been engaged in any activity74. The Competition Act, 2002 causes much confusion with respect to the terminology of acquisition. There is a need for reconsidering the provisions relating to waiting periods. Introducing the “working days” concept as opposed to an all-inclusive 210 days, would increase the possibility of quality output by the Commission. The need for qualitative determination of control as opposed to mere quantitative assessment based on shares, voting rights, securities or assets is imminent. A shift from a lenient regime that imposes insignificant amount of fees and penalty is also the need of the hour. Lastly, the grey area of joint ventures must be looked into by the Commission and all the existing loopholes are to be plugged.


The purpose of this project was to study the merger regulatory framework under the Indian Competition Act and compare it with the US and UK laws.  Merger regulation under the Indian Competition Act have imbibed several practices from the US and EU regimes. The law amongst other provision regarding merger control provides for definite threshold limits, the factors to be taken into consideration before determining the fate of a merger, prescribed time period for merger notification and the remedies. These provisions help the Competition authorities to work towards its duties of preventing adverse effects on competition, protecting interest of consumers and ensuring freedom of trade. However, there are certain factors which need to be deliberated upon and need further skilled escalation. Importantly, amongst these is a need for lucid and cogent guidelines or strategy principles on types of mergers and there effects75. Hence, the Indian Competition Law should deliberate and resolve these issues for smooth and effective functioning.

  1. Yadav, A.K., Kumar, B.R., (2005), ‘Role of Organization Culture in Mergers and acquisitions’, SCMS Journal of Management, vol.2 (3), pp.51-63 []
  2. Combination under the act means acquisition of control, shares, voting rights or assets, acquisition of control by a person over an enterprise where such person has control over another enterprise engaged in competing businesses, mergers and amalgamations between or amongst enterprises when the combining parties exceed the threshold set in the Act. []
  3. Section 5 of the Competition Act, 2002 []
  4. Available at last visited on 05.10.2012 []
  5. Amukthamaalyada, Competition Regulation of Mergers and Acquisitions, available at lat visited on 09.10.2012 []
  6. Neeraj Tiwari, Merger under The Regime of Competition Law: A Comparative Study of Indian Legal Framework With EC and UK. Available at last visited on 08.10.2012 []
  7. “section 6(1) states that no person or enterprise shall enter into a combination which causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India and such a combination shall be void.” []
  8. Saraswati Industries Syndicate Ltd. V. CIT AIR 1991 SC 70 []
  9. V.K Kaushal, (1995), Corporate Takeovers in India, Sarup & Sons, New Delhi []
  10. Available at []
  11. R.F Bruner,  Applied Mergers & Acquisitions, 2004, John Wiley & Sons, Inc., New Jersey []
  12. J. Sloman, (2006), Economics, 6th ed., Pearson Education Limited, England []
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  14. B. Pearson, (1999), Successful Acquisition of Unquoted Companies. A Practical Guide, 4th ed., University Press, Cambridge, United Kingdom []
  15. Srinivas Pathasarathy, Competition Law in India, Wolters Kluwer Law & Business Publications, Page 178 []
  16. Abir Roy, Jayant Kumar, Competition Law in India, Eastern House Publications, Page123 []
  17. Section 20(4) (h) of the Competition Act mentions market share in the relevant market, of the persons or enterprise in a combination, individually and as a combination’ as one of the factors to be considered by the CCI in determining whether a combination would have AAEC in India in the relevant market []
  18. Poulami Chatterjee, Horizontal Merger Guidelines: 2006. []
  19. Babu, G.R., (2005), Financial Services in India, Concept Publishing Company, New Delhi []
  20. Supra 16, Page 179 []
  21. D. P Mittal, Competition Law & Practice; As amended by Competiton (Amendment) Act 2007, 2nd Edition, Page 314. []
  22. United States v. Paramount Pictures 334 US 131 and Unites States v. Griffith 334 US 100. []
  23. Gaughan, P.A., (2007), ‘Mergers, Acquisitions and Corporate Restructuring’, 4th ed., John Wiley & Sons, Inc., New Jersey []
  24. Coyle, B. (2000), ‘Mergers and Acquisitions’, Fitzroy Dearborn Publishers, USA []
  25. Supra 22, page 320 []
  26. Rav Pratap Singh, Implications of cross border mergers under Indian competition law –a comparative analysis with US & EC jurisdictions, available at, (Last visited on 25th March 2012). []
  27. Section 6 of the Competition Act, 2002. []
  28. Section 6 read with Section 20 and 29 of Competition Act lays down the procedure for investigation of combinations by the Competition Commission of India. []
  29. Alan H Goldberg, ‘Merger Control’ in Vinod Dhall (ed) Competition Law Today, Oxford University Press, 1st ed., 2007, 93; See also David M. Barton and Roger Sherman, The Price and Profit Effects of Horizontal Merger: A Case Study, The Journal of Industrial Economics, Vol. 33, No. 2 (Dec., 1984), pp. 165-177, available at; See also Alan A. Fisher et. al., Price Effects of Horizontal Mergers, California Law Review, Vol. 77, No. 4 (Jul., 1989), pp. 777-827, available at []
  30. High Level Committee (2000). Report of the High Level Committee on Competition Policy and Law- Dept. of Company Affairs, Govt. of India, New Delhi. []
  31. Mehta S. Pradeep, ‘A Fundamental Competition Policy for India’, ISBN: 81-7188-493-8.; Pg 62. []
  32. Explanation (b) to Section 5 of the Act []
  33. “control” includes controlling the affairs or management by— (i) one or more enterprises, either jointly or singly, over another enterprise or group; (ii) one or more groups, either jointly or singly, over another group or enterprise. []
  34. Vide notification S.O. 481 (E) dated 4th March, 2011. []
  35. Section 54- Power to exempt.- The Central Government may, by notification, exempt from the application of this Act, or any provision thereof, and for such period as it may specify in such notification— (a)  any class of enterprises if such exemption is necessary in the interest of security of the State or public interest; []
  36. The value of assets shall include the brand value, value of goodwill, or Intellectual Property Rights etc. referred to in explanation (c) to section 5 of the Act. []
  37. Section 6(2) being an exception to the above clause, it provides that any person or enterprise proposing to enter into combination shall have to give notice to the Competition Commission of India. []
  38. Regulation 5 (3) – Form of notice for the proposed combination, of The Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (as amended up to 23rd February, 2012). []
  39. Regulation 5 (2) – Form of notice for the proposed combination, of The Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (as amended upto 23rd February, 2012). []
  40. Where the notice is filed in Form I the Fee payable shall be rupees ten lakhs (Rs 10,00,000) and if the notice is filed in Form II the Fee payable shall be rupees forty lakhs (40,00,000). []
  41. Supra 22, Page 328. []
  42. Section 2(r) of the Competition Act defines relevant market as” the market that may be determined by the Commission with reference to the relevant product market or the relevant geographic market or with reference to both the markets.” []
  43. The Parties to the combination may opt to file a notice in Form II, Schedule II of the combination regulations instead of Form I, in the instances where- a. the parties to the combination are engaged in production, supply, distribution, storage, sale or trade of similar or identical or substitutable goods or provision of similar or identical or substitutable services and the combined market share of the parties to the combination after such combination is more than fifteen percent (15%) in the relevant market ;  b. the parties to the combination are engaged at different stages or levels of the production chain in different markets, in respect of production, supply, distribution, storage, sale or trade in goods or provision of services, and their individual or combined market share is more than twenty five percent (25%) in the relevant  market. []
  44. Regulation 8 (1)- Form of notice for the proposed combination, of The Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (as amended up to 23rd February, 2012). []
  45. Supra 19, Available at 200804111009 16.pdf, last visited on 06.10.2012 []
  46. Richard Wish, Competition Law, Oxford University Press, 6th ed., 2009,  Page 849 []
  47. Jeffrey I. Shinder, Merger Review in the United States and the European Union available at []
  48. US, Clayton Act, 1914,sec 7 []
  49. US, FTC guidelines, Supra note 44 at 29 []
  50. Organization for Economic Co-operation and Development, Substantive Criteria used for Merger Assessment, October 2002, 293 available at last visited on 07.10.2012. []
  51. EC Merger Regulations, 2004, art 2(1). []
  52. EC Merger Regulations, 2004, art 2(1)(a),2(1)(b). []
  53. UK, Enterprise Act, sec 35, 36  []
  54. Office of Fair Trading, Mergers: Substantive Assessment Guidance(‘OFT guidance’), May 2003, ¶ 4.7 -4.10 available at []
  55. UK, Merger references: Competition Commission Guidelines(‘UKCC guidelines’), June 2003, ¶ 3.28-3.31 available at []
  56. OFT guidance ¶ 3.12; CC guidelines ¶ 2.7 []
  57. OFT guidance ¶ 4.39- 4.35; CC guidelines ¶ 3.26, 3.27, 4.34-4.45 []
  58. UK, Enterprise Act, sec 30,sec 22(b). []
  59. OFT guidance ¶ 4.34 []
  60. UK, Enterprise Act, sec 30(1)(a). []
  61. OFT guidance ¶ 4.37; CC guidance 3.61-3.63; See also Morven Hadden, ‘EC Merger Control Regime’ in Gary Eaborn, Takeovers: Law and Practice, Lexis Nexis Butterworths, 2005, 714. []
  62. India, The Competition Act, 2002, Section. 6 []
  63. Ibid, section 20(4). []
  64. India, The Competition Act, 2002, sec. 20(4) (m), uses the terminology ‘relative advantage by way of contribution to economic development. []
  65. ECMR, Article 14 (2). []
  66. ECMR, Article 14 (1). []
  67. Available at, last visited on 08.10.2012 []
  68. Section 3(3) prohibits price fixing, market allocation etc []
  69. Supra 35 , Page 185 []
  70. Article 3(4) of EMCR []
  71. Izzet M Sinan and Jonathan NT Uphoff, Morgan Lewis & Bockius LLP, Review of joint ventures under the new EC Merger Regulation Available at, last visited on 08.10.2012 []
  72. India, Competition Act, 2002, sec 3(3). []
  73. Competition Act, 2002, Section 2 (h) [“a person or a department of the Government, who or which is, or has been, engaged in any activity relating to the production, storage, supply, distribution acquisition of control of articles or goods…..”] []
  74. Khaitan & Co, Joint Ventures under India’s Competition Act, available at, last visited on 08.10.2012 []
  75. Available at []

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