CCI Releases Draft Combinations Regulations

The Competition Commission of India (CCI) has released a draft of the CCI (Combinations) Regulations 2023 for comments. The proposed regulation seeks to repeal and replace the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011.

The recommended alternations are intended to align with the multiple changes introduced by the Competition (Amendment) Act, 2023, including new notification criteria, relaxed application of Section 6(2A) to certain transactions, a reduction in timeline for the assessment of combinations, time limit for prima facie opinion, scheme for the review of combinations and changes in the modification proposal process.

The major changes brought by the proposed regulations pertain to:

• Value of transactions: Values shall include every valuable consideration, whether direct or indirect for any covenant, undertaking, obligations or restrictions, interconnected steps, arrangements or incidental arrangements, options and securities, contingencies etc. Some clarifications pertaining to future value, exchange rates, interconnected transactions, subscription value, etc. have been provided.
• Criteria for substantial business operations in India: Assessment shall be done on the basis of the number of its users, subscribers, etc. in the previous twelve months, gross merchandise value in the previous twelve months or turnover in the preceding financial year.
• Pre-filing consultation: Provision has been made for pre-filing consultation to ascertain whether a transaction qualifies as a combination, however the guidance shall not be binding.
• Rights in cases of open offers and acquisitions on stock exchanges: Acquirers can avail themselves of economic benefits, dispose of the shares acquired and exercise voting rights relating to liquidation and insolvency proceedings.
• Fees: Fees have been increased from 20 lakhs to 30 lakhs for Form I and 65 lakhs to 90 lakhs for Form II.

The comments may be shared by September 25, 2023, through the form on the CCI’s website: https://cci.gov.in/stakeholders-topics-consultations