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Proposed Amendments to the Competition Act, 2002 (India)

NO&T Asia Legal Review

Shejal Verma
Nagashima Ohno & Tsunematsu
Journal /
NO&T Asia Legal Review No.50 (August, 2022)
Practice Areas
*Please note that this newsletter is for informational purposes only and does not constitute legal advice. In addition, it is based on information as of its date of publication and does not reflect information after such date. In particular, please also note that preliminary reports in this newsletter may differ from current interpretations and practice depending on the nature of the report.


The Competition (Amendment) Bill, 2022 (the “Amendment Bill”) was introduced in the Parliament of India on August 5, 2022※1. The Amendment Bill seeks to carry out certain changes to the substantive and procedural provisions of the Competition Act, 2002 (“Competition Act”) owing to “a significant growth of Indian markets and a paradigm shift in the way businesses operate, in the last decade”※2. In view of the economic development, emergence of various business models and the experience gained out of the functioning of the Competition Commission of India (“CCI”), the Government of India constituted the Competition Law Review Committee, to examine and suggest modifications to the Competition Act. After review of the recommendations proposed by the Committee, public consultations and with a view to provide regulatory certainty and trust-based business environment, the Government of India has tabled the Amendment Bill before the Parliament.

We have summarized key features of the Amendment Bill below.

Combinations based on Transaction Value

Currently transactions involving parties with: (i) cumulative assets of more than INR 10 billion, or (ii) cumulative turnover of more than INR 30 billion, require the prior approval of the CCI, unless any of the exemptions apply. The Amendment Bill seeks to include combinations wherein the value of any transaction, in connection with acquisition of any control, shares, voting rights or assets of an enterprise, merger or amalgamation exceeds INR 20 billion, as a reportable transaction, requiring the prior approval of the CCI, subject to the condition that the party in question has substantial business operations in India.

The Amendment Bill, however, does not define “substantial business operations in India” and it is up to the CCI to provide clarification. Further, the “value of transaction” will include every valuable consideration (direct, indirect or deferred) for any acquisition, merger or amalgamation. The introduction of the transaction value threshold will allow the CCI to review a number of additional transactions which may otherwise fall below the current prescribed asset/turnover thresholds.

Approval Timelines

The current provision under the Competition Act states that a combination will be effective only after the CCI issues an order in this regard, or after 210 days have passed since the date the notice of the combination was submitted to the CCI. The Amendment Bill proposes to reduce the review timeline from 210 days to 150 days. In case the party to the combination requests for additional time to furnish relevant information or remove defects to the notice of combination filed, the CCI may grant additional time which shall not be more than 30 days. The Amendment Bill also proposes that the CCI is required to form its preliminary view on a transaction within 20 calendar days (current timeline provides for 30 working days) failing which, the combination will be deemed approved.

Definition of Control

The Competition Act defines control as ‘control over the affairs or management by one or more enterprises over another enterprise or group’ for the purpose of classification of combinations. The Amendment Bill seeks to modify the definition of control and introduce a lower threshold of “control”, consistent with the CCI’s interpretation of control in past decisions, and define it as ‘the ability to exercise material influence over the management, affairs, or strategic commercial decisions’. However, the Amendment Bill does not expand on the term “material influence” and absent such clarification, the term will need to be interpreted from case to case, unless the CCI issues any clear guidance in this regard.

Increased Penalty in Certain Events

The Competition Act imposes certain penalties in the event any party to a combination either: (i) makes a materially false statement, or a makes a knowingly false statement; and (ii) omits or fails to state any material particular, which such party knows to be material. As per the current provision of the Competition Act, the penalty payable by such party is determined by the CCI but shall not be less than INR 5 million but may extend to INR 10 million, however now the Amendment Bill proposes to increase the upper threshold of the penalty to INR 50 million.

Further, under the current regime, a failure to notify the CCI of the combination may result in the CCI imposing a penalty of up to 1% of the assets or turnover (whichever is higher) of the combination. The Amendment Bill modifies this provision of law, and now any party to a combination who fails make the requisite notification to the CCI or submit the relevant information in response to an inquiry into the combination initiated by the CCI may be liable to pay a penalty of up to 1% of the total turnover, assets, or transaction value of such a combination, whichever is higher.

Exemption from the standstill requirement

The Amendment Bill proposes to include a new provision that exempts stock market purchases from the Competition Act’s standstill obligations. It seeks to exempt implementation of an open offer or an acquisition of shares or securities convertible into other securities from various sellers, through a series of transactions on a regulated stock exchange, if: (a) the notice of the acquisition is filed with the CCI as required under the Competition Act; and (b) the acquirer does not exercise any ownership or beneficial rights or interest in such shares or convertible securities including voting rights and receipt of dividends or any other distributions (“Exemption Conditions”). The exemption would enable the relevant parties from consuming time-sensitive stock market acquisitions without having to wait for the CCI approval. However, the acquirer will need to adhere to the Exemption Conditions until receiving approval from the CCI.

Settlements and Commitments

The Amendment Bill proposes a new settlement and commitment mechanism for cases involving anti-competitive vertical agreements and abuse of dominance. The settlement and commitment process will not be applicable for cartel cases. In effect a settlement can be offered after the investigation report has been issued by the Office of the Director General (the DG) and before the CCI passes its final order in the matter. The Bill also permits parties to propose a voluntary commitment after the CCI forms a prima facie opinion on the matter but before the DG issues its investigation report. The final order adopting the commitment or settlement would not be subject to any appeal. Currently, the Competition Act does not contain any such provisions and the introduction of the settlement and commitments provisions will enable CCI to expedite the enforcement process and complete investigations sooner.


The Amendment Bill proposes the introduction of leniency plus, which allows the CCI to grant additional leniency in penalty in a situation where a party being investigated for collusive conduct makes a true and vital disclosure of another undisclosed cartel.


Overall, the amendments to the Competition Act are a positive step towards meeting the needs of the new age market. To fully comprehend what this means for India’s merger-control regime, one will need to wait for the approval of the Amendment Bill by the Parliament and the CCI regulations ensuing from it.


Full text of the Amendment Bill can be found athttp://

Statement of objects and reasons of the Competition (Amendment) Bill, 2022.

This newsletter is given as general information for reference purposes only and therefore does not constitute our firm’s legal advice. Any opinion stated in this newsletter is a personal view of the author(s) and not our firm’s official view. For any specific matter or legal issue, please do not rely on this newsletter but make sure to consult a legal adviser. We would be delighted to answer your questions, if any.

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