Antitrust and Competition Newsletter - March 2024

The March edition of our Antitrust and Competition newsletter highlights notable combinations and enforcement matters. It also sheds light on the various recent development, such as implementation of Settlement and Commitment Regulations, Determination of Turnover and Income Regulations, Penalty Guidelines, De Minimis Target Exemption and Section 5 Threshold, Draft Exemption Rules, Green Channel Rules and the Draft Digital Competition Bill.

Merger Control and Combinations

1. On March 6, 2024, the Competition Commission of India ("CCI") granted approval to a proposed transaction, inter alia, envisaging an acquisition of 59.25% shareholding in Maini Precision Products Limited by Ring Plus Aqua Limited.

2. On March 12, 2024, the CCI granted approval to a proposed combination involving the acquisition of stake in Asia Healthcare Holdings Pte. Ltd.("AHH") by TPG Growth V SF Markets Pte. Ltd. and Waverly Pte. Ltd., and subsequent acquisition of majority shareholding in Asian Institute of Nephrology and Urology Private Limited by AHH.

3. On March 12, 2024, the CCI granted approval for the proposed merger of Garagepreneurs Internet Pvt. Ltd. with the North East Small Finance Bank.

4. On March 19, 2024, the CCI granted approval to a proposed by Shriram Ownership Trust of 9.44% and 20% stake of Shriram Investment Holdings Private Limited held by APRN Enterprises Private Limited and Piramal Enterprises Limited.

5. On March 19, 2024, the CCI granted approval for the proposed acquisition of Kesoram Cement Business from Kesoram Industries Limited by Ultratech Cement Limited.

6. On March 26, 2024, the CCI granted approval for the proposed 100% acquisition of Lanco Amarkantak Power Limited by Adani Power Limited.

7. On March 26, 2024, the CCI granted approval for the proposed combination envisaging subscription of Class B Compulsorily Convertible Preference shares of API Holdings by MEMG LLP and 360 ONE.

Advisory and Enforcement Matters

1. CCI gives clean chit to MGF Development Limited & Others.

The CCI closed a complaint filed by Rekha Oberoi and others against MGF Development Limited and others, alleging contravention of provisions of the Competition Act, 2002 ("Act"). CCI concluded that the concerns raised by the informants, such as issues relating to maintenance payments, electricity charges and shared common areas, pertained to contractual or civil matters. In addition, the CCI did not find merit in the case for examination of cartel allegations.

2. CCI closes complaint filed against Laerdal Medical Private Limited. & Others.

The complaint filed by Manohar Rawat alleging collusion/ cartelization against Laerdal Medical Private Limited and others has been dismissed by the CCI. While closing the complaint, the CCI determined that the information provided by the informant did not prima-facie indicate bid-rigging or collusive bidding in terms of the provisions of the Act.

3. Start-ups denied interim relief by CCI in the Google Billing case.

On March 15, 2024, the CCI had ordered that Google's UCB System, prima facie, violated the provisions of the Act. However, following the examination on March 20, 2024, CCI rejected the start-ups' plea for granting interim relief against the actions of Google, based on lack of evidence preventing Google from collecting its fees altogether. The startups are likely to appeal the said CCI's order.

4. Term of staff leased to CCI to handle NAA cases extended by 6 months.

The Department of Revenue has extended the term of staff leased to the CCI to handle issues involving the National Anti-Profiteering Authority ("NAA"). The revenue department has now provided three extensions. The staff will be available to the CCI until September 31, 2024. The Central Goods and Service Act initially established the NAA in December 2017; however, in December 2022, the NAA's mandate was transferred to the CCI.

5. Disney-Reliance merger needs major revisions for securing CCI's approval.

To secure CCI's approval, Walt Disney's Star India and Reliance Industries' Viacom18 will be required to revise the proposed merger structure. Importantly, the USD8.5 billion agreement is expected to result in a merged company that will have market shares in more than few segments, surpassing the CCI's combination standards.

Regulatory Updates

There has been a series of legislative activity in India's anti-trust sector. The recent weeks have witnessed a surge in action, including the introduction of the following:

1. CCI (Settlement) Regulations, 2024 ("Settlement Regulations") and CCI (Commitment) Regulation 2024 ("Commitment Regulations") dated March 06, 2024

The Settlement Regulations and the Commitment Regulations have been introduced with the aim of minimizing legal disputes and expediting market corrections by companies, at different stages of the inquiry. Pertinently, the settlement application must be offered within 45 calendar days post issuance of Directorate General's ("DG") investigating report and before CCI's final decision whereas the commitment application must be offered within 45 days from receipt of the prima facie order passed by the CCI and prior to the DG' investigating report.

2. CCI (Determination of Turnover or Income) Regulations, 2024 ("Determination of Turnover and Income Regulation") dated March 06, 2024

The Determination of Turnover and Income Regulation outline the methodology for assessing "turnover" or "income" for both enterprises and individuals. These regulations clarify as to how the CCI would calculate penalties under Sections 27 and 48 of the Act.

3. CCI (Determination of Monetary Penalty) Guidelines, 2024 ("Penalty Guidelines") dated March 06, 2024

The Penalty Guidelines have been prescribed in compliance with Sections 64B(1) and 64B(3) of the Competition (Amendment) Act 2023. They provide clarification on the procedure, the value and the standards that the CCI will take into account when determining fines. Even though the CCI is not legally obligated to follow these penalty guidelines, they constitute a significant step toward greater transparency in the penalty calculating process. This is particularly relevant in light of the amendment pertaining to Section 27(b) of the Act, which grants the CCI the power to levy fines in proportion to an enterprise's global turnover.

4. "De Minimis Target Exemption" and "Section 5 Threshold" dated March 07, 2024

Ministry of Corporate Affairs ("MCA") has increased the existing threshold value of assets and turnover in respect of: (a) De Minimis Target Exemption; and, (b) Section 5 Threshold. It is important to note that all combinations exceeding the threshold are required to seek prior approval from the CCI before they are completed.

a) In the table below, the existing De Minimis Target Exemption and revised De Minimis Target Exemption are reflected:

	Existing	Revised
Assets	INR 350 crores	INR 450 crores
Turnover	INR 1000 crores	INR 1250 crores
Pertinently, the revised thresholds are applicable for a period of two years from the date of publication.

b) In the table below, the existing Section 5 Thresholds and the revised Section 5 Thresholds are reflected:

Existing	Revised
	India	Worldwide with India Leg	India	Worldwide with India Leg
Enterprise Level
Assets	INR 2000 crores	USD 1 billion with at least INR 1000 crores in India	INR 2500 crores	USD 1.25 Billion with at least INR 1250 crores in India
Turnover	INR 6000 crores		INR 7500 crores	USD 3.75 Billion with at least INR 3750 crores in India
Group Level
Assets	INR 8000 crores	USD 4 Billion with at least INR 1000 crore in India	INR 10000 crores	USD 5 Billion with at least INR 1250 crores in India
Turnover	INR 24000 crores	USD 12 Billion with at least INR 3000 crores in India	INR 30000 crores	USD 15 Billion with at least INR 3750 crores in India

5. CCI (Exempted Combination) Rules, 2024 ("Draft Exemption Rules") dated March 11, 2024

The proposed Draft Exemption Rules aim to reinstate the exemptions outlined in Schedule 1 of the CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 ("Combination Regulations"). While the Combination Regulations suggest that such transactions were generally deemed "unlikely to result in a significant adverse impact on competition in India" and thus "need not normally be filed", the Draft Exemption Rules are more explicit in enumerating these exemptions. The key changes include revamped minority share acquisition exemption; introduction of exemption for acquisition of incremental shareholding or voting rights by existing shareholders, holding less than 25%; introduction of exemption on demerger; exemption on intra-group share acquisition; and 'change in control' test.

6. CCI (Green Channel) Rules, 2024 ("Green Channel Rules") dated March 11, 2024

The Green Channel Rules propose to consolidate the present criteria for filling a notice under this route. A notable modification for criteria of falling under green channel route can be found in the new limbs of "affiliate" test which includes: (i) 10% or more of the enterprise's shares or voting rights; or, (ii) right or ability to have a representation on the board of directors of the enterprise either as director or as an observer; or, (iii) right or ability to access commercially sensitive information of the enterprise.

7. Draft Digital Competition Bill, 2024 ("DCB") dated March 12, 2024

The primary aim underlying the DCB is to ensure preemptive monitoring and intervention against anti-competitive conduct and to provide a level playing field for small enterprises in the digital market. The report by the committee underlines the significance of a robust regulatory framework to address the nuances and complexities of digital competition. The highlight of the draft DCB is how big tech companies have been roped in under the scanner of the CCI regarding their significant market presence.

Contributors to the newsletter:

• Abhishek Sharma, Partner
  
• Ketan Mukhija, Partner
• Shorya Singhal, Associate

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