Competition Act: Amendment to the Combination Regulations Seeks to Simplify the Procedures Relating to Combinations

The Competition Commission of India (“Commission”), with the main objective of simplifying the procedures relating to combinations provided under the Competition Act, 2002 (“Competition Act”), has recently amended the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (“Combination Regulations”). The Combination Regulations, which was first introduced on May 11, 2011 has been amended multiple times and the latest amendment to the same is the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Amendment Regulations, 2018 (“Amendment Regulations”) which was notified on 9 October, 2018.

Some of the Key Amendments are:

The Amendment Regulations Provides Clarity on the Time Period of 210 Days for a Combination to come into Effect:

As per the Act, every combination shall come into effect only after 210 days have passed from the date when the notice regarding the combination has been given to the Commission or the Commission has passed an order in relation to the same, whichever is earlier[1]. The Combination Regulations provides for getting additional information, clarifications, rectification of defects, etc. if required. However, there was no clarity in relation to whether the time taken to get these details would be covered within the 210 days period. Now, as per the Amendment Regulations, it is clear that the time period for getting additional information, clarifications, rectifications of defects, etc. is not included in the 210 days period. This essentially means that the time taken for a combination to come into effect will now be longer even for deemed approval due to the additional time that may be taken for getting additional information, clarifications, rectifications, etc.

Withdrawal and Re-Filing of Notice

As per the Amendment Regulations, a new regulation 16A has been inserted which states that, any time prior to issuance of notice by the Commission to the parties to a combination under Section 29 (1) of the Act[2], the Commission, may on the request of the parties to the combination allow withdrawal and refiling of the notice. Also, in case of withdrawal and refiling, the fee already paid in respect of such notice will be adjusted against the fee payable in respect of the new notice, provided the new notice is given within 3 months from the date of withdrawal.

Modifications to the Combination

As per the Amendment Regulations, before the Commission forms an opinion under Section 29 (1) of the Act, the parties to the combination may offer modifications to the combination and the Commission may approve the proposed combination basis such modifications. The position before the amendment was that, only if the Commission considered it necessary, it may require the parties to file additional information or accept modification.

Modifications in response to the Notice issued by the Commission

As per regulation 25 (1) of the Combination Regulations, the Commission can propose appropriate modifications to a combination if it is of the opinion that such combination is likely to have adverse effect on competition but such adverse effect can be eliminated by suitable modifications. Now, a new regulation 25 (1A) is inserted whereby, along with the response to the notice issued by the Commission under Section 29 (1) of the Act, the parties to the combination also can offer modifications to address the concerns of the Commission. The Commission may approve the combination basis such modifications. In such a case, the additional time required to evaluate the modification shall be excluded from the period provided under sections 6 (2A), 29 (2) and 31 (11) of the Act.

Source:https://www.cci.gov.in/sites/default/files/whats_newdocument/Comb.%20Amend%20Regl.2018.pdf

[1] Section 6 (2A) of the Act

[2] As per Section 29 (1), where the Commission is of the prima facie opinion that a combination is likely to cause, or has caused an appreciable adverse effect on competition, it shall issue a notice to show cause to the parties to combination calling upon them to respond within 30 days of the receipt of the notice, as to why investigation in respect of such combination should not be conducted.

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