Comments
The Competition Commission of India (CCI) views the proposed changes in the competition law as a mandate to cast its merger control net over high value deals, primarily in the new age/digital markets.
Free entry to market
In an interview to BusinessLine, CCI Chairperson Ashok Kumar Gupta said the philosophy and legislative intent behind the just-proposed Competition (Amendment) Bill, 2022, is to capture deals that raise competition concerns. The aim is to facilitate smaller players that are being restricted through such mega deals from freely entering the market. “We want markets, especially digital ones, to remain open and people should be able to freely enter it. We want markets to remain competitive,” Gupta said.
In the absence of such legal provisions, several high profile big tech deals such as Facebook’s $16-billion acquisition of WhatsApp and Microsoft’s acquisition of LinkedIn, escaped CCI scrutiny despite the parties having large user base in India, an expert pointed out. Such big tech deals — although struck abroad — will have to be notified to the CCI if the current Bill gets enacted into law, the expert added.
Guidelines being readied
The Bill, introduced in Lok Sabha during the monsoon session, has proposed ‘deal value threshold’ of ₹2,000 crore as an additional criterion for notifying mergers and acquisitions (M&A) to CCI if one of the parties has ‘significant business operations in India’. Gupta revealed that guidelines on that are in the process of being formulated and they will be open for public and industry consultations once the Bill is passed.
“We will frame regulations very carefully. We will not make them in vacuum but only after full understanding of market realities. The regulations will detail on how to calculate Indian nexus,” he added.
Gupta highlighted that the overall thrust of the Bill is to facilitate ease of doing business by providing regulatory certainty, framework for faster market correction and a trust-based business environment. He said there are global precedents — from Germany and Austria which have introduced new transaction value thresholds into their merger control regimes through legislative changes. The US already had it, he noted.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.