The Lok Sabha, on 29 March 2023, passed the Competition (Amendment) Bill, 2023, introducing the most comprehensive overhaul of India's competition law framework since the enactment of the Competition Act, 2002. The Bill, which was subsequently passed by the Rajya Sabha on 3 April 2023, introduces a deal value threshold for mandatory merger notification, redefines the concept of control, and establishes a settlement and commitment mechanism for antitrust proceedings before the Competition Commission of India.
Background
The Competition Act, 2002 had remained largely unamended despite significant changes in the Indian economy, particularly the rise of digital markets where high-value acquisitions of companies with minimal revenues could escape the existing asset-and-turnover based merger control thresholds. The need for reform was identified by the Competition Law Review Committee, which submitted its report in 2019, and further reinforced by the Parliamentary Standing Committee on Finance, which examined the Bill and recommended several modifications.
The Bill was introduced in the Lok Sabha during the Winter Session 2022 and was referred to the Parliamentary Standing Committee. After incorporating the Committee's recommendations, the revised Bill was taken up for passage during the Budget Session 2023.
Key Provisions
The Amendment Bill introduces the following principal reforms:
Deal value threshold: Transactions where the aggregate deal value exceeds Rs. 2,000 crore will require mandatory notification to the CCI if the target enterprise has "substantial business operations in India," regardless of whether the existing asset or turnover thresholds are triggered.
Expanded definition of control: "Control" is redefined as the ability to exercise "material influence" over the management, affairs, or strategic commercial decisions of an enterprise, lowering the bar from the earlier, less clearly defined standard.
Shortened timelines: The period for CCI to form a prima facie opinion on combinations is reduced from 30 to 20 working days, and the overall review period from 210 to 150 calendar days, streamlining the merger approval process.
Settlement and commitment framework: Parties to antitrust proceedings can now offer commitments (before investigation) or settlements (after investigation) to resolve proceedings without a full adjudication, reducing the CCI's case backlog.
Enhanced investigation powers: The Director General of the CCI receives expanded powers to retain documents, record statements on oath, and seek information from past employees and in-house legal advisors.
Implications for Practitioners
The passage of this Bill signals a fundamental shift in India's competition law landscape. M&A practitioners must prepare for a dual-threshold regime where both conventional asset-and-turnover tests and the new deal value test must be evaluated in every transaction.
The settlement and commitment mechanism opens a new strategic avenue for competition litigation practitioners. Clients facing CCI proceedings can now weigh the costs and benefits of a negotiated resolution against full adjudication. Practitioners should study the frameworks in the European Union and the United Kingdom, which have operated similar mechanisms, to develop effective settlement strategies.
The compressed timelines for merger review, while positive for deal certainty, will require practitioners to front-load regulatory engagement and prepare more comprehensive pre-notification consultations.