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The Competition Commission Of India (CCI) publishes draft CCI (Combinations) Regulations, 2023

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Yesterday on September 5, 2023, CCI introduced the draft regulations for combinations to adapt to the changing dynamics of digital mergers and acquisitions. One of the major challenges faced by CCI was multi-billion dollar deals falling outside the purview of its merger control. This mainly happened due to the lack of substantial assets or turnover involved in these high-value transactions. To address this issue deal value threshold of INR 2000 Crore is added.

Further, the draft pays special emphasis on determining the Significant Business Operations (SBO) in India. The new regulation provides for three criteria for determining SBO:
(a) the number of users / subscribers / customers / visitors (in the preceding 12 months from relevant date);
(b) the gross merchandise value (in the preceding 12 months from relevant date);
(c) its turnover (in the previous FY);
if either of the three aforementioned criterion exceeds 10% or more of its global value, it would mandatorily trigger reporting to the CCI.

The regulator has asked for feedback until September 25.

The new draft comes after the unveiling of the draft regulations on commitment and settlement proceedings on August 23, 2023 which provides a quick alternative to litigation. All the three draft regulations together show the intention of CCI to modernise and adapt to the new landscape of competition.

A copy of the draft regulation is enclosed below.

Readers are welcome to send their views to Regstreet Law Advisors at info@regstreetlaw.com.

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