Corporate deals in India may slowdown if the changes proposed to the competition law regime in India go through. To resolve the concerns raised by industry players over some of these changes, the Competition Commission of India (CCI), the apex body vested with the responsibility of regulating competition in India, recently promulgated a draft of the Competition Commission (combinations) Regulations.

The regulations, which seek to govern “combinations” (a term defined under competition law to encompass an acquisition, merger or amalgamation) provide much-awaited clarity on several issues pertaining to such transactions, but regrettably create new areas of uncertainty.

Background

The competition law in India is primarily governed by the Competition Act, 2002 (Act); an act that attempts to make a shift from curbing “monopolies” under the archaic Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act), to curb practices having “adverse effects on competition” and promote and sustain competition. While a majority of the procedural provisions of the Act with respect to setting up CCI have entered into force, the substantive provisions of the Act dealing with ‘anti competitive agreements’, ‘abuse of dominant position’ and ‘regulation of combinations’ have not yet entered into full force and effect.

Mired in litigation soon after its enactment on the grounds of being constitutionally invalid, certain amendments were proposed to the Act, resulting in the passing of the Competition (Amendment) Act, 2007, (Amendment Act). The Amendment Act, which received presidential assent towards the end of 2007, will come into effect after it has been notified. In essence, India’s competition laws are thus embodied in acts, amendments to acts and regulations, all of which are mere drafts that are yet to attain the force of law.

Most significant of the changes proposed by the Amendment Act, was the introduction of a mandatory notification process for persons undertaking combinations above prescribed threshold limits. The Amendment Act also introduced a lengthy waiting period of 210 days, within which the CCI is required to pass its order with respect to the notice received, failing which, the proposed combination is deemed to be approved. In pursuance of the changes proposed by the Amendment Act with respect to combinations, the regulations have been drafted by CCI to provide for a framework for the regulation of combinations.

http://economictimes.indiatimes.com/What_can_lead_to_slowdown_in_Indias_...