Competition (Amendment) Act, 2023

Competition (Amendment) Act, 2023: Changes governing combinations

The Competition Act, 2002 (“Competition Act”) was enacted with a view to promote and sustain competition in markets and to prevent practices having an adverse effect on competition.  The Competition Act has been amended by the Competition (Amendment) Act, 2023 (“Amending Act”).  The Amending Act received the President’s assent on 11 April 2023.  The Amending Act is set to come into force on the date appointed by the Central Government in the Official Gazette. Different dates may be appointed for the enforcement of different provisions of the Amending Act.

This update highlights the key changes brought about by the Amending Act in respect of provisions pertaining to combinations under the Competition Act.


The Amending Act widens the ambit of the Competition Act as applicable to combinations, revises the timelines for the approval of combinations, adopts certain existing concepts into the Competition Act and provides certain regulatory/ procedural reliefs.

In this alert, we have analyzed the key changes introduced in respect of governance of combinations.  

Combination means the acquisition of one or more enterprises by one or more persons, or merger or amalgamation of enterprises, if such acquisition, merger or amalgamation satisfies the thresholds (in the nature of turnover or value of assets) set out in the Competition Act.

Widening of the scope of ‘relevant product market’

The Amending Act widens the scope of ‘relevant product market’ under the Competition Act.  

In terms of the Competition Act, ‘relevant product market’ means a market for all the products or services which are substitutable/ inter-changeable by the consumers due to their characteristics, usage and price.

The Amending Act introduces a new criterion, in addition to that prescribed under the Competition Act.  Accordingly, the market for all the products or services, the production or supply of which is substitutable/ interchangeable by the supplier without incurring significant costs or risks, is also considered as a relevant product market. 

The definition of ‘relevant product market’ explains the manner in which the applicable market for a certain product is determined – this helps establish the appropriate market in whose respect the appreciable adverse effect of competition is to be analyzed in respect of combinations or otherwise.

Regulation of combinations

In addition to the existing thresholds under the Competition Act, the Amending Act has introduced a new threshold that triggers the approval requirement in respect of a merger or acquisition.  

In terms of the Amending Act, the approval of the Competition Commission of India (“CCI”) is required if the value of any transaction exceeds INR 20,00,00,00,000 (Rupees two thousand crores), where such transaction is connected to (i) an acquisition of any control, shares, voting rights or assets of an enterprise; or (ii) merger or amalgamation.    The value of transaction includes every valuable consideration, whether direct, indirect or deferred.

The aforesaid criterion applies only to those transactions wherein the target entity, that is, the enterprise being acquired, taken control of, merged or amalgamated, has ‘significant business operations in India’.

The meaning of ‘significant business operations in India’ will be defined by the regulations to be introduced/ amended pursuant to the Amending Act.

Factors determining combinations

The Amending Act has provided for various definitions/ concepts that help determine whether a given acquisition or merger is covered within the category of ‘combinations’.  While these aspects were already provided for in the clarifications provided by the CCI from time to time, these have now been made part of the Competition Act itself, by virtue of the Amending Act.  

Value of assets

The value of assets is to be determined by taking the book value of the assets as shown in the audited books of account of the enterprise, in the financial year immediately preceding the financial year in which the combination is proposed.  The value of assets includes the brand value, value of goodwill, copyright, patent, permitted use, collective mark, registered proprietor, registered trademark, registered user, etc. 

Acquisition/ control/ merger of a portion/ division of an enterprise: 

Where a portion of an enterprise, division or business is being acquired, merged or amalgamated, the relevant value of assets, turnover or transaction attributable to such portion, business or division is considered.

De-minimis exemption

The de-minimis exemption, introduced by notification no. S.O. 988(E) dated 27 March 2017 (“De-minimis Exemption”), exempted certain transactions in which the value of assets being acquired, merged or amalgamated did not exceed the thresholds specified in the aforementioned notification from obtaining approval from the CCI.

The Amending Act has adopted the concept of de-minimis exemption into the Competition Act itself.  Accordingly, the amended provision provides that in the event the value of the assets or turnover of the enterprise being acquired/ merged does not exceed the thresholds prescribed, such transactions will be exempted from obtaining approval from the CCI.

Comprehensive definition of ‘turnover’ regarding combinations

In terms of the Competition Act, turnover is one of the key thresholds to be considered for the determination of a combination.  However, the said Act provided for a broad and ambiguous definition, i.e., ‘turnover’ includes the value of goods or services.

The Amending Act provides clarity by introducing a new and comprehensive definition of turnover.

Accordingly, ‘turnover’ now refers to the turnover certified by the statutory auditor based on the last available audited accounts of the enterprise in the financial year immediately preceding the financial year in which the notice of approval in respect of combinations is filed before the CCI.  It also provides clarity on the specific aspects which are to be excluded while undertaking such calculation.  These are in the nature of intra-group sales, indirect taxes, trade discounts and all amounts generated through assets or business from customers outside India.

Definition of ‘control’ regarding combinations

In terms of the Competition Act, control referred to ‘controlling the affairs or management’ by one or more enterprises/ group.

The Amending Act has provided for a new definition of ‘control’ which will be used to determine combinations.  The new definition not only includes actual control but also covers within its purview the ‘ability to exercise material influence, in any manner whatsoever, over the management or affairs or strategic commercial decisions’.

The term ‘material influence’ has not been defined in the Amending Act and would therefore be subject to judicial interpretation/ legislative action.

Open offers

The Amending Act has introduced a relaxation for the implementation of a combination by way of an open offer (as defined under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation) 2011)).  

In terms of the Amending Act, a combination by way of an open offer is not prevented from being implemented, in the event that:

  • The notice of acquisition by way of an open offer is filed with the CCI within the prescribed timelines; and
  • The acquirer does not exercise any ownership, beneficial rights or interest in the acquired shares or convertible securities, till such time that the CCI approves such acquisition.

Reduction of timelines

The Amending Act has significantly cut down the timelines applicable to the CCI, in respect of forming a view/ opinion regarding the likelihood of causing an appreciable adverse effect on competition by a combination: 

  • The timeline to form a prima facie opinion has been reduced from 30 (thirty) days to 15 (fifteen) days; and
  • The timeline for formation of final view has been reduced from 210 (two hundred ten) days to 150 (one hundred fifty) days.

Deemed approval for certain combinations

The Amending Act has introduced a new provision for combinations that are not exempted under the Competition Act but may be covered within a specific criterion to be prescribed.  Such combinations may file a notice disclosing the details of the proposed combination.  Upon receipt of an acknowledgment by the CCI, the proposed combination will be deemed to have been approved.  

However, the deemed approval provided by the CCI will be invalid (void ab initio) if it is found that: 

  • the combination does not fulfill the specific criterion or requirements; or
  • information/ declarations provided are materially incorrect or incomplete. 

In such cases, the CCI may pass any order as it deems fit, subject to providing an opportunity to be heard to the parties.

Exemptions to certain combinations

The Amending Act provides for certain combinations to be exempted from the requirement to obtain approval from the CCI.  The details of the said exempted combinations will be provided for separately.

Amendment/ modification to combinations

The Amending Act permits parties to a combination the opportunity to amend/ modify the aspects of a combination which may cause appreciable adverse effect on competition.  

In order to do so, the CCI will, upon completion of an investigation, provide a statement of objections to the parties to a combination if it believes that such a combination causes an appreciable adverse effect on competition.  The CCI will then allow such parties a time period of 25 (twenty-five) days to explain why the combination should be allowed to take effect.

The parties to such a combination may then make suitable amendments/ modifications to the combination to eliminate the appreciable adverse effect on competition.  In the event the modifications are not acceptable to the CCI, it will allow the parties to furnish revised modifications.  The CCI also has the power to propose appropriate modifications to the combination which may be considered by the parties.

Increased penalties

The Amending Act has increased the penalty for making false statement or omission to furnish material information in respect of combinations from INR 1,00,00,000 (Rupees one crore) to INR 5,00,00,000 (Rupees five crore).


The Amending Act is a key step towards tackling challenges, bringing Indian anti-trust laws up to global standards and ensuring adequate scrutiny by the CCI.

Additionally, while the Amending Act introduces integral concepts which will assist in the overall development of the anti-trust regime in India, the effectiveness of the same may depend on the mode and manner of enforcement, as will be prescribed in the regulations which are yet to come.

Devyani Chugh (Senior Associate) and Shubham T Shahi (Associate) from Lumiere Law Partners also contributed to the article.