Expert Committee Submits its Report on Determining Methodology for Fixing National Minimum Wage, Ministry of Labour and Employment Click here

Regulation of Combinations

From Arthapedia
Jump to: navigation, search

Worldwide term used for this concept is merger review/merger control, which is done by competition regulators to prevent mergers and acquisitions that are likely to reduce competition in the market and lead to higher prices, lower quality goods or services, or less innovation. Some countries have voluntary regimes while most have mandatory regimes. Mandatory regime implies that enterprises above defined thresholds in the concerned competition law have to mandatorily notify the competition regulator for merger clearance.

The term 'combination' for the purposes of the Indian Competition Law, (Competition Act, 2002) Act is defined very broadly, to include any acquisition of shares, voting rights, control or assets or merger or amalgamation of enterprises, where the parties to the acquisition, merger or amalgamation satisfy the prescribed monetary thresholds in relation to the size of the acquired enterprise and the combined size of the acquiring and acquired. The thresholds are unambiguously specified in the Act in terms of assets or turnover in India and abroad.

Entering into a combination which causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India is prohibited and such combination would be void. The provisions relating to regulations of combinations (M&As) in the Act have into orce from June 1, 2011. The main enforcement provisions of regulation of combinations are given under sections 5, 6, 20, 29, 30 and 31 of the Act.

The review process for combination under the Act involves mandatory pre-merger notification to the Commission of combinations that exceed the prescribed threshold. In case a notifiable merger is not notified, the Commission has the option to inquire into it within one year of the taking into effect of the merger. In case such an inquiry finds appreciable adverse effect on competition, the Competition Commission of India may order de-merger which would involve social and economic costs. The Commission is also authorized to impose a fine which may extend to one per cent of the total turnover or the assets of the combination.


  1. Competition Act, 2002, Advocacy Booklet Series 6, Provisions relating to Combinations.

Contributed by

Personal tools
Share Tools