Key Changes in Combination Regulations under

Competition (Amendment) Act, 2023

Tarusha Mathur
Tarusha Mathur

Published on: Jan 31, 2024

Shreya Pandey
Shreya Pandey

Updated on: Feb 14, 2024

(22 Ratings)


With the evolving regulatory needs and to streamline processes, the Competition Commission of India (“CCI”) published the Competition Commission of India (Combinations) Regulations, 2023 (“Draft Combination Regulations) to materially amend the statute and incorporate the changes brought by the Competition (Amendment) Act, 2023 (“Amendment Act”).

The Draft Combination Regulations in addition to paving way for the implementation of the newly introduced merger control provisions of the Amendment Act, also replace the CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (“Combination Regulations”).

Brief history of Introduction of Competition Law in India

Before the liberalization of the Indian economy, the MTRP (Monopolies and Restrictive Trade Practices) Act, 1969, was in effect to regulate unfair trade practices and restrict the growth of monopolies. The Competition Act 2002 was enacted to counter the challenges the Indian economy faced after liberalization by promoting competition in India and prohibiting anti-competitive agreements between firms and safeguard consumer interests and economic growth due to a healthy environment in the market.

Changes Proposed in New Regulations

  1. Introduction of Deal Value Threshold (DVT):
    The Amendment Act had introduced DVT as a new category of jurisdictional threshold to determine the notifiability of a transaction in addition to the existing asset and turnover based criteria. The CCI will now be able to review transactions where: (i) the global deal value is in excess of INR 2,000 crore (approximately USD 244 million); and (ii) the party acquired, taken control of, merged or amalgamated, has ‘substantial business operations in India’. Earlier, CCI could only scrutinise the parties to a combination only if they breached certain assets and turnover thresholds. There was a need to introduce a new threshold considering the constantly evolving digital market where traditional metrics might be insufficient. However, the Draft Regulations do not contain any transitional provisions for transactions which have been signed but not closed prior to the introduction of the final regulations. This will be especially problematic while assessing the applicability of the DVT provisions for transactions that do not meet the other jurisdictional thresholds.
    • Calculation of Value of Transaction:
      The value of transaction is broadly defined and includes “every valuable consideration, whether direct or indirect, immediate or deferred, cash or otherwise”. It further envisages that it shall include the consideration for: (i) non-compete fees; (ii) all transactional and incidental commercial arrangements entered between the parties within last 2 (two) years of the transaction, including technology assistance agreements, licensing of intellectual property rights, and supply of materials, etc.; (iii) the value of all inter-connected transactions; (iv) options and securities to be acquired (assuming full exercise of such option); and (v) any contingency.
      It is further augmented that, if the transaction value is not captured in the transaction documents, the transaction value considered by the board of directors (or similar approving authority) should be considered.
      Moreover, if the precise value of transaction cannot be established with “reasonable certainty”, the notifying party should presume that the DVT has been breached, and file a prior notification with the CCI accordingly.
    • Substantial Business Operations in India:
      The Draft Merger & Acquisition Regulations has also thrown light that if 10% of the target enterprise’s global user/subscriber/ customer base, gross merchandise value (GMV), or turnover in the past 12 months/last financial year is in India, the target would be deemed to have substantial business operations.
  2. Derogation from the standstill obligations for Open offer/Open Market purchase:
    As the merger control regime in India is suspensory in nature and prescribes a standstill obligation, whereby the parties to a transaction are not permitted to consummate any part of a transaction till receipt of the CCI’s approval. The CCI can now be approached within 30 days from the first acquisition/ implementation of the open offer / purchase on the open market. Perhaps, it is a welcome move as it provides abundant clarity on making time-sensitive acquisitions through open offers and open market purchases pending the CCI’s approval.
  3. Codification of pre-filing consultation process:
    The Draft Regulations have codified the informal pre-filing consultation mechanism that is available to parties to a transaction, although, such pre-filing consultation is not binding on the CCI.
  4. Review of Form and Stop Clock:
    The Draft Combination Regulations provides that in case the CCI issues a defect letter to the parties within 10 (ten) working days from the date of receipt of the notification form, the CCI’s review timeline (of 30 (thirty) calendar days) will begin only after such ‘defects’ are cured.
  5. Increase in the filing fees:
    The Draft Regulations have significantly increased the filing fees for both Form I (short form) and Form II (long form). The filing fees for Form I have been increased from INR 2 million (approx. USD 24,000) to INR 3 million (approx. USD 36,000). The filing fees for a Form II have been increased from INR 6.5 million (approx. USD 78,000) to INR 9 million (approx. USD 108,000).

Few Other Notable Changes:

  1. Deletion of Exempt Transactions under Schedule I: The Schedule I of the existing Combination Regulations provide various important exemptions from the notification requirement, including exemptions for minority share acquisitions, intra-group transactions, bonus issues, stock splits and creeping acquisitions. The same has been deleted under the draft regulations.
  2. Omission of Green Channel Route (GCR): In 2019, the Combination Regulations had introduced a provision for deemed approval of a combination which does not involve any horizontal overlap or vertical / complementary relationship between the parties, i.e., a green channel route. However, the Draft Combination Regulations have omitted the provision which enabled the parties to avail the benefit of GCR notification.

Key Compliance Obligation for Companies:

  1. Section 6(2A) clarifies that transactions breaching the DVT threshold of INR 20 billion (INR 2,000 crore / USD 251 million / EUR 247 million approximately) are notifiable to the CCI even if the transaction benefits from the small target exemption.
  2. The new regulations codify the pre-filing consultation mechanism and provides a format for suggesting any modifications or remedies to the CCI. Through these draft regulations, CCI has also introduced timelines for various stages of modification process, These changes provide companies involved in merger transactions to follow a structured process for seeking any guidance from CCI and a proper format for modifications or remedies.
  3. In case of a combination, prior to any approval from the CCI, acquirers can dispose of their shares and can even take advantage of economic benefits basis the shares they hold.
  4. Since, the draft combination regulations remove the Schedule I exemptions, the impact of this might burden the businesses as it may include many transactions that were exempted earlier.
  5. The amendment in the filing fees will have financial implications for entities planning to enter a combination.

Take Aways

The recent release of the draft regulations represents a major step towards its implementation, especially in light of the recent overhaul of the competition act and the ever-changing landscape of Indian competition law. With the intention of improving and streamlining the Indian transactional environment, these new regulations offer crucial clarification on important competition law concepts, including deal value thresholds, commitments, and settlements. Furthermore, the CCI’s authority and efficacy in its capacity as the Indian competition regulator are further reinforced by the expanding trend of voluntary commitments and the backing of appellate forums. These revisions demonstrate India’s devotion to stimulate business-friendly environment for all sphere of businesses.


The information provided in this article is intended for general informational purposes only and should not be construed as legal advice. The content of this article is not intended to create and receipt of it does not constitute any relationship. Readers should not act upon this information without seeking professional legal counsel.

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