Background:
The Competition Act, 2002 forms the foundation of India’s competition law regime, aimed at preventing anti-competitive practices, regulating combinations, and protecting consumer interests through oversight by the Competition Commission of India (CCI). To address evolving market dynamics, particularly in digital and complex transactions, the Competition (Amendment) Act, 2023 introduced key reforms such as deal value thresholds, faster approval timelines, and provisions for settlements and commitments. To implement these changes, various rules and regulations were notified in 2024—including those relating to thresholds, combinations, exemptions, and procedural aspects—thereby creating a more streamlined, efficient, and business-friendly regulatory framework while ensuring effective competition oversight.
Applicability:
The provisions of the Competition Act, 2002 and related rules apply to enterprises, associations of enterprises, persons, and associations of persons meeting the thresholds under Rule 3 of the Competition (Criteria of Combination) Rules, 2024. It covers all entities involved in combinations, including acquirers undertaking acquisitions, parties to mergers or amalgamations, and all combining entities required to file notice with the Competition Commission of India in Form I or Form II. The framework also extends to entities involved in regulatory proceedings, including Commitment Applicants and Settlement Applicants as defined under the respective CCI Regulations, 2024, ensuring comprehensive coverage of all stakeholders.
Compliance Requirement Under Rules In Accordance with the Sections:
No enterprise/association of enterprises/person/association of persons shall enter into an agreement for production, supply, distribution, storage, acquisition, or control of goods/provision of services which causes or is likely to cause an adverse effect on competition within India. Any such agreement shall be void. Notably, this section does not restrict the right of any person to impose reasonable conditions necessary for protecting intellectual property rights under the Copyright Act, Patents Act, Trade Marks Act, Geographical Indications Act, Designs Act, Semi-conductor Integrated Circuits Layout-Design Act, or any other IPR law; nor does it restrict the right to export goods where the agreement relates exclusively to production/supply/distribution/control of goods or services for such export.
Agreements between competitors that fix purchase/sale prices, limit/control production, supply, markets, investment or services, share markets by geography/products/customers, or involve bid rigging/collusive bidding shall be presumed to adversely affect competition. Agreements entered into as part of a Joint Venture that increases efficiency in production/supply/distribution/storage/acquisition/control of goods or provision of services are exempt. Enterprises not engaged in identical/similar trade shall also be presumed part of the agreement if they participate or intend to participate in furtherance of such agreement. Restrictions on IPR protection and export-related agreements are also excluded from the scope of this section.
Agreements between enterprises or persons at different stages of the production chain — including tie-in arrangements, exclusive dealing, refusal to deal, and resale price maintenance — are prohibited if they cause an appreciable adverse effect on competition in India. This provision does not apply to agreements between an enterprise and an end consumer. IPR protection conditions and export-related agreements remain excluded from the scope of this restriction.
No enterprise or group shall abuse its dominant position. Abuse includes: (a) directly or indirectly imposing unfair/discriminatory conditions or prices (including predatory pricing) in purchase or sale of goods/services; (b) limiting/restricting production, services, markets, or technical/scientific development to the prejudice of consumers; (c) practices resulting in denial of market access; (d) making contracts subject to supplementary obligations with no connection to the subject matter; and (e) using dominant position in one relevant market to enter or protect another relevant market.
An acquisition constitutes a combination where the acquirer and the target enterprise jointly have: (A) in India, assets exceeding ₹1,000 crore or turnover exceeding ₹3,000 crore; or (B) globally, assets exceeding USD 500 million (including ₹500 crore in India) or turnover exceeding USD 1,500 million (including ₹1,500 crore in India). Group-level thresholds are set at ₹4,000 crore/₹12,000 crore (India) or USD 2 billion/USD 6 billion (global). Transactions where the target’s Indian assets do not exceed ₹450 crore or turnover does not exceed ₹1,250 crore are exempt from being treated as a combination.
Acquisition of control over an enterprise while already controlling another in similar/substitutable goods/services constitutes a combination if the combined assets exceed ₹1,000 crore or turnover ₹3,000 crore in India; or globally, assets exceed USD 500 million (including ₹500 crore in India) or turnover USD 1,500 million (including ₹1,500 crore in India). The group-level thresholds post-acquisition are ₹4,000 crore/₹12,000 crore (India) and USD 2 billion/USD 6 billion (global). The de minimis exemption applies where the target’s Indian assets or turnover does not exceed ₹450 crore or ₹1,250 crore respectively.
A merger or amalgamation is considered a combination where the resulting enterprise has assets exceeding ₹1,000 crore or turnover exceeding ₹3,000 crore in India; or global assets exceeding USD 500 million (including ₹500 crore in India) or turnover exceeding USD 1,500 million (including ₹1,500 crore in India). Group-level thresholds post-merger are ₹4,000 crore/₹12,000 crore (India) and USD 2 billion/USD 6 billion (global). The de minimis exemption applies where target assets or turnover in India does not exceed ₹450 crore or ₹1,250 crore respectively.
Transactions exceeding ₹2,000 crore involving acquisition of any control, shares, voting rights or assets of an enterprise, or a merger or amalgamation, qualify as combinations, subject to substantial business operations in India. Transaction value includes all direct/indirect consideration (cash or otherwise), including consideration for covenants, interconnected steps, arrangements payable within 2 years, call options, and contingent consideration. An enterprise is deemed to have substantial business operations in India if: (a) Indian users are ≥10% of global users (digital services); (b) GMV in India is ≥10% of global GMV or >₹500 crore; or (c) Indian turnover is ≥10% of global turnover or >₹500 crore.
No person or enterprise shall enter into a combination which causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India. Any such combination shall be void.
Any person or enterprise proposing a combination shall give notice to the Commission in Form-I disclosing requisite details. Such notice shall be given after board approval of the merger/amalgamation or execution of the acquisition agreement, but before consummation. No combination shall come into effect until 150 days have passed from the date of notice or the Commission has passed orders under Section 31, whichever is earlier. Combinations fulfilling specified criteria under Rule 3 of the Exemption Rules are exempt from compliance with Section 6(2)/(2A). Nothing under Section 6(2A) or 43A prevents implementation of open offers or market acquisitions on regulated stock exchanges as specified under Section 6A.
A person may opt to give notice in Form II (as per Schedule I), preferably where: (a) the parties deal in similar or substitutable goods/services and the post-combination market share exceeds 15%; or (b) the parties operate at different levels of the production chain and their combined market share exceeds 25% in any relevant market. This is a preferred (though not exclusively mandatory) route for transactions with significant competitive overlap.
Where a combination fulfils the prescribed criteria and is not otherwise exempted, notice shall be given in Form I disclosing details of the proposed combination. No separate notice under Section 6(2) is required. Upon acknowledgement, the combination is deemed approved under Section 31(1). Combinations satisfying the criteria under Schedule I of the Competition (Criteria for Exemption of Combinations) Rules, 2024 are exempt from compliance with Section 6(2), (2A), and (4). Parties to a combination, including their group entities and affiliates fulfilling the criteria under Rule 3, are required to give notice in Form I.
An open offer or acquisition through a stock exchange may proceed provided notice is filed with the Commission in Form I within 30 days from the first acquisition. The acquirer shall not exercise any ownership, voting, or beneficial rights (including dividends or distributions) acquired through such open offer or market acquisition until the Commission’s approval is obtained.
If parties fail to file Form I/II under Section 6(2), 6(4), 6A(a), or the proviso to Section 43A, the Commission may initiate inquiry under Section 20(1) on its own knowledge or information. Once an inquiry is initiated, the Commission may direct parties to file Form I/II, without prejudice to applicable penalties. Such notice must be filed within 30 days of receipt of communication from the Commission.
In case of an acquisition or acquisition of control, the acquirer shall file notice in Form I/II duly signed by authorised persons as per Regulation 11 of CCI (General) Regulations, 2024. In case of a company, the form may additionally be signed by any duly authorised signatory beyond the persons specified in Regulation 11.
In an acquisition without the target’s consent, the acquirer shall file available details in Form I/II and furnish complete information within 10 days of the filing of such Forms. Where information is unavailable due to the absence of target consent, the Commission may direct the target enterprise to provide the required details. The time taken for such submissions by the target shall be excluded from the statutory review timeline.
In case of a merger or amalgamation, the parties shall jointly file notice in Form I/II duly signed by authorised persons as per Regulation 11 of CCI (General) Regulations, 2024. In case of a company, the form may also be signed by any duly authorised signatory in addition to the persons specified under Regulation 11.
Notice under Regulation 5 or 8 shall be filed with the Commission in both physical and electronic form. Where confidentiality is sought for any information, a request for confidentiality shall be filed along with a duly filled public version and electronic copy of the notice. Additionally, a summary of the combination (not exceeding 1,000 words, without confidential information) covering the names of parties, nature and purpose of the combination, products/services/businesses, and the markets in which the parties operate, shall be submitted for publication on the Commission’s website.
Any person who has given notice in Form I/II under Regulation 5 or 8 shall inform the Commission of any change in the information provided in such notice within 10 working days from the date of issuance of acknowledgement by the Secretary under sub-regulation (3) of Regulation 13.
The Commission may allow the withdrawal of a notice before issuance of a notice under Section 29(1) upon application by the notifying party. The fee paid for the original notice can be adjusted against a re-filed notice, provided the re-filing occurs within 45 days of the withdrawal.
Where the Commission forms a prima facie opinion that a combination has caused or is likely to cause an appreciable adverse effect on competition in the relevant market in India, it shall issue a show cause notice to the parties requiring them to respond within 15 days as to why investigation should not be initiated. The parties may propose modifications in Form IV along with this response, and the Commission may approve the same under Section 31(1).
Where the Commission forms a prima facie opinion that a combination may cause an appreciable adverse effect on competition, it shall direct the person who has given notice to publish the details of the combination within 7 days. The parties shall publish such details in Form III as prescribed in Schedule I of the Regulations.
The parties shall submit the details of the combination to be published under Regulation 21(2) to the Commission before its actual publication. The Commission may host the submitted details on its official website.
The person who has given notice shall submit copies of the publication referred to in Regulation 21 to the Secretary of the Commission not later than two days from the date of publication of the details of the combination.
Where the Commission decides to propose a modification under Section 29(7) or the proviso to Section 29A(3), the Secretary shall communicate the proposal to the notifying party within seven days. The party shall submit its acceptance or non-acceptance in writing within five days of receipt of the Commission’s proposal.
After the Section 29 process is complete, if the Commission finds that a combination causes or may cause an appreciable adverse effect on competition, it shall issue a statement of objections to the parties. The parties are required to respond within 25 days of receipt, explaining why the combination should be allowed to take effect.
Modifications under Section 29(7) or Section 29A(2)/(3) shall be filed in Form IV. For Section 29(7) modifications, they must be submitted within 10 working days from the date of issuance of acknowledgement by the Secretary under Regulation 13(3), or along with a response to communication issued under Regulation 14(2) of CCI (Combinations) Regulations, 2024, whichever is later.
Parties must file a Report with an Affidavit of Compliance within 7 days of completing the modifications as per the Commission’s order under Section 31. Where ongoing compliance is required, parties must also submit periodic reports as directed by the Commission.
A Commitment Application may be filed within 45 days of receipt of the Section 26(1) order, or before receipt of the DG report under Section 26(4), whichever is earlier. The application must include all particulars as specified in Regulation 3(1) of CCI (Commitment) Regulations, 2024.
The applicant must furnish a revised Commitment Application within 15 days of receipt of communication from the Commission outlining reasons for its prima facie dissatisfaction with the commitments offered. Failure to submit the revised application within the prescribed time, or failure to provide clarifications/information/data as sought, will result in the Commission rejecting the Commitment Application by order under Section 48B(5) and proceeding with inquiry under Section 26.
A Settlement Application may be filed within 45 days of receipt of the DG report under Section 26(4). The application must include particulars as specified in Regulation 3(1) of CCI (Settlement) Regulations, 2024. Applications filed after this period may be entertained within a further 30-day window on sufficient cause, after recording reasons for the delay.
If a Settlement Application is incomplete or non-compliant, the applicant may be required to correct defects or furnish additional information/documents within 10 working days of receipt of communication from the Commission, or within such period as specified by the Commission. Failure to comply within the prescribed time may result in the application being treated as invalid.
The applicant must furnish a revised Settlement Application within 15 days of receipt of communication from the Commission outlining reasons for its prima facie dissatisfaction with the settlement proposal offered. Failure to submit within the prescribed time, or failure to provide clarifications/information/data as sought, will result in the Commission rejecting the Settlement Application and proceeding with inquiry under Section 26.
Penalty & Consequences
Section 27
(1)If the Commission finds a violation of anti-competitive agreements (Section 3) or abuse of dominant position (Section 4), direct any enterprise or association of enterprises or person or association of persons, as the case may be, involved in such agreement, or abuse of dominant position, to discontinue and not to re-enter such agreement or discontinue such abuse of dominant position, as the case may be
(2)It may impose a penalty of up to 10% of the average turnover or income of the last 3 financial years on each guilty enterprise/person.
(3) In case of a cartel, the penalty is stricter: Up to 3 times the profit for each year of the cartel’s existence, or 10% of turnover/income for each year, Whichever is higher.
(4) The Commission can also: Modify the agreement as required, and Issue additional directions, including compliance orders and payment of costs.
(5) While passing orders under this section, if the Commission comes to a finding, that an enterprise in contravention to section 3 or section 4 of the Act is a member of a group as defined in clause (b) of the Explanation to section 5 of the Act, and other members of such a group are also responsible for, or have contributed to, such a contravention, then it may pass orders, under this section, against such members of the group
Section 42(2)
If any person, without reasonable clause, fails to comply with the orders or directions of the Commission issued under sections 6, 27, 28, 31, 32, 33, 42A, 43, 43A, 44 and 45 of the Act, he shall be liable to a penalty which may extend to rupees one lakh for each day during which such non-compliance occurs, subject to a maximum of rupees ten crore, as the Commission may determine
Section 42(3)
If any person does not comply with the orders or directions issued, or fails to pay the penalty imposed under sub-section (2), he shall, without prejudice to any proceeding under section 39, be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to rupees twenty-five crore, or with both, as the Chief Metropolitan Magistrate, Delhi may deem fit
Section 43A
If any person or enterprise fails to give notice to the Commission under sub-section (2) or sub-section (4) of section 6 or contravenes sub-section (2A) of section 6 or submit information pursuant to an inquiry under sub-section (1) of section 20, the Commission may impose on such person or enterprise, a penalty which may extend to one per cent., of the total turnover or assets or the value of transaction referred to in clause (d) of section 5, whichever is higher, of such a combination. Provided that in case any person or enterprise has given a notice under sub-section (4) of section 6 and such notice is found to be void ab initio under sub-section (6) of section 6, then a notice under sub-section (2) of section 6 may be given by the acquirer or parties to the combination, as may be applicable, within a period of thirty days of the order of the Commission under sub-section (6) of that section and no action under this section shall be taken by the Commission till the expiry of such period of thirty days.
Section 44
If any person, being a party to a combination,—
(a) makes a statement which is false in any material particular, or knowing it to be false; or
(b) omits to state any material particular knowing it to be material, such person shall be liable to a penalty which shall not be less than rupees fifty lakhs but which may extend to rupees five crore, as may be determined by the Commission.
Section 42(2): If any person, without reasonable clause, fails to comply with the orders or directions of the Commission issued under sections 6, 27, 28, 31, 32, 33, 42A, 43, 43A, 44 and 45 of the Act, he shall be liable to a penalty which may extend to rupees one lakh for each day during which such non-compliance occurs, subject to a maximum of rupees ten crore, as the Commission may determine.
Section 45
Penalty for contravention in relation to furnishing of information-Without prejudice to the provisions of sub-section (6) of section 6 and section 44, if a person, who furnishes or is required to furnish under this Act any particulars, documents or any information,—
(a) makes any statement or furnishes any document which he knows or has reason to believe to be false in any material particular; or
(b) omits to state any material fact knowing it to be material; or (c) wilfully alters, suppresses or destroys any document which is required to be furnished as aforesaid, such person shall be liable to a penalty which may extend to rupees one crore as may be determined by the Commission.
Section 46
If an applicant fails to comply with the order passed under section 48A or section 48B or it comes to the notice of the Commission that the applicant has not made full and true disclosure or there has been a material change in the facts, the order passed under section 48A or section 48B, as the case may be, shall stand revoked and withdrawn and such enterprise shall be liable to pay legal costs incurred by the Commission which may extend to rupees one crore and the Commission may restore or initiate the inquiry in respect of which the order under section 48A or section 48B was passed.
Section 48
If a company contravenes the provisions of Act/rule/reg/order/direction, both the company and persons in charge are liable, with penalty up to 10% of average income of the last 3 years. For cartels (s.3(3)), penalty may extend to 10% of income for each year of the continuance of such agreement.. No liability if lack of knowledge or due diligence is proved. Officers are also liable if contravention occurs with consent, connivance, or neglect.
Section 48C
If an applicant fails to comply with the order passed under section 48A or section 48B or it comes to the notice of the Commission that the applicant has not made full and true disclosure or there has been a material change in the facts, the order passed under section 48A or section 48B, as the case may be, shall stand revoked and withdrawn and such enterprise shall be liable to pay legal costs incurred by the Commission which may extend to rupees one crore and the Commission may restore or initiate the inquiry in respect of which the order under section 48A or section 48B was passed.
Regulation 4(6) — CCI (Commitment/Settlement) Regulations, 2024
In case the Commitment Applicant fails to submit the revised Commitment Application within the time period specified in sub-regulation (2) and clause (c) of sub-regulation (5) above or fails to provide clarification, information, or data as sought under sub-regulation (8), the Commission shall by an order passed in terms of sub-section (5) of section 48B of the Act reject the Commitment Application and proceed with its inquiry under section 26 of the Act.
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