This article is written by Ajay Sharma, 4th year BA.LLB student at National University of Advanced Legal Studies, Kochi.
Analysis of Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Amendment Regulations, 2018
The Competition Commission of India (CCI) has recently amended the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (Combination Regulations). The Competition Commission Act, 2002 (the Act) cast duty upon the CCI to regulate combinations which have caused or are likely to cause appreciable adverse effect on competition (AAEC) in terms of sub-section 6 of the Act. Section 6(2) of the Act also provide for a prior notification to CCI in respect of combination in which the person or enterprise who or which involved in the combination has to fill a form with all the details as required by the Combination regulations within the prescribed time. In 2011 the CCI introduced the Combination regulation for better functioning of Combination in India but from the period of time parties to the combination have raised several issues or flaws in the Combination regulations due to that the Combination regulations have been amended from time to time. Combination regulations were subsequently amended from 2012-2016 every year. The main aim of these amendments is to address the issues which have been raised by the different stakeholder during the period of time. This article will analyse the key changes made by recent amendments to the Combination Regulations.
Salient Features of The Competition Commission of India (Procedure In Regard To The Transaction Of Business Relating To Combinations) Amendment Regulations, 2018
- Clarification on the computation of two hundred and ten days
As per Sub -Section 2A Section 6 of the Act, no combination or notified transaction shall be completed until two hundred and ten days expired, which would count from the day on which the notice has been given to the CCI or until the CCI pass orders under Section 31 of the Act. Prior the amendment there was an ambiguity regarding the calculation of two hundred and ten days. The ambiguity was that when the acquires or any other party provide any information, remove defects from the filing or where modification offered by the parties to the combination in such situation whether the time which spend in these activities would be included or excluded. By virtue of the Recent Amendment, the CCI has shed some light on this issue. It stated that when CCI receives any =clarification from the parties included in the notified transaction or the parties provide any kind of additional information or modify the notice then such period shall be excluded from the two hundred and ten days (210 days). It means that the period of 210 days is extendable and there is no surety that the party would get approval for combination in fixed 210 days as the CCI might take considerable amount of time while requesting any material information from the parties to the notified transaction Since such time period utilized for clarifications is excluded from the 210 day Time Frame, the final waiting period for the CCI approval would increase.
Click here- Voluntary Modification to Combination
Prior to the amendment, for the purpose of forming prima facie opinion on the combination the voluntary modification only consider if the CCI required the parties to the combination to file additional information or modification in the combination[1].However after the amendment the CCI may accept voluntary modification submitted by the parties to the combination even if the modification was not deem by the CCI and considers the modification for the approval of the combination, which was not earlier provided in the section 19(2) of the Combination Regulations.
This amendment has also made changes in the regulation 25 of Combination Regulations which deals with the modification to the proposed combination. As per the Section 29(1) where the commission is of the opinion that the combination has or is likely to have AAEC on the competition, CCI issue show cause notice to the parties to the combination to show cause as to why the combination should not be examined in phase II. Prior to the the amendment in the Combination Regulations parties were allowed to offer voluntarily modification, before the CCI forms a prima facie opinion and issues show cause notice. However the latest amendment introduce new sub-regulation in the regulations which allows the parties to combination to offer modification to address the prima facie opinion or concern formed by the CCI under section 29(1) of the Act in response of show cause notice issued by the CCI just before initiating a phase II investigation. Definitely this provision would result in speedier resolution of CCI’s concern or opinion which ultimately will result in quicker approval of combination in such a way it will help both the CCI and parties to the combination.
- Withdrawal and refilling of notice
The amendment added new provision in the combination regulations which would solve the problem of making changes in notice after filing before the CCI. Before, the amendment if the parties to the combination wanted to make any changes the notice filed earlier with the CCI which likely to remove the factors or reasons for determining AAEC on competition, the CCI had the liberty to invalidate the notice.[2] But after the amendment if the parties want to make any changes in the notice which they have earlier filled then they can withdraw the previous notice and refile a fresh notice. Regulations provide that parties have to withdraw or refilling of notice prior to the issuance of notice under sub-section (1) of Section 29 of the Act. This will enable the parties to the combination to decide whether to withdraw and refile or to simply notify the CCI of any changes to the notice.
Conclusion
The amendment in the Combination Regulations is a welcome step it would help both the CCI and the parties to the combination. Prior to the amendment, parties and other stakeholder involved in the combination had raised the several issues regarding the filing procedure especially when it comes to the voluntary modification in the notice of combination before CCI forming its prima facie opinion on the combination. The latest amendments in the combination regulation simplify the filling procedure which would immensely help the parties to the combination and it would ultimately result in the fast approval for the combination.
The amendment mainly focus on the elimination of ambiguity of the computation of two hundred and ten days (legislative timeframe for deemed clearance) which have been faced by the parties to the combination. There is no doubt the changes which have been made in the computation of 210 days would give clarity but at the same time period for the approval of combination would increase if the CCI ask any additional information from the parties. Overall the amendment in Combination Regulations is welcome step and has tried to address the issues which have been raised by the parties over the years regarding the filling of notice to the CCI but this would not solve all the problems still there are issues which have to be addressed by the CCI.
[1] Regulation 19(2) of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011.
[2]Manas Kumar Chaudhuri, Anisha Chand and Sakshi Agarwal, Commissio of India Issues Amendment to the Combination Regulations.http://www.mondaq.com/india/x/745314/Trade+Regulation+Practices/Competition+Commission+Of+India+Issues+Amendments+To+The+Combination+Regulations
