In the modern market scenario and increasing levels of competition, business entities are required to undergo change in their corporate structures. This often results in the joining of different corporates in the form of joint venture, mergers or acquisitions.
The smooth functioning of the changed corporate structure where entities have come together is administered under the provisions of the conditions, are set forth between the parties in the terms of the agreement or memorandum of understanding agreed between them.
In order to assure that the collaboration does not adversely impact the fair competition within the country, the regulatory body - Competition Commission of India (also referred to as “CCI”) has introduced the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (hereinafter referred to as the “Regulations”). These Regulations enumerate the procedure for combination as approved by the procedure established by law.
Amendment to the Regulations
For ensuring effective enforcement of the Regulations, the Government brought about modifications to the Regulations through the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Amendment Regulations, 2018 (hereinafter referred to as the “Amendment Regulations”). Some of the important changes brought forth by the said Amendment Regulations are stated below:
Regulation 16A provides for the procedure of withdrawal and refiling of notice an enterprise proposing to enter into a combination is required to give notice of its combination with other entities. As per the said provisions the Commission may on the request of the parties to the combination allow withdrawal and refiling of the notice. Further, in case of withdrawal of notice, the fee already paid in respect of such notice shall be adjusted against the fee payable in respect of new notice given by the parties to the combination provided the new notice is given within three months from the date of withdrawal.;
Regulation 19(2) revises the existing provisions and states that before the CCI forms a prima facie opinion that a combination is likely to cause or has caused an appreciable adverse effect on competition within the relevant market in India, the parties may offer modification to the combination and on that basis.;
Regulation 25(1A) Where the CCI issues a notice to the parties to combination calling upon them to respond as to why investigation in respect of such combination should not be conducted. The parties thereto may offer modification to address the prima facie concerns in the said notice and on that basis.;
Regulation 27(1) has been substituted and now states that where the CCI is of the opinion that the implementation of the modifications to the proposed combination needs supervision, it may appoint agencies to oversee such implementation, on such terms and conditions as may be determined by the CCI.