Competition Commission of India (‘CCI’) introduces “green channel” for Fast Track approvals of certain combinations – further amends Combination regulations.

By way of a notification dated 13 August 2019 (“Notification”), the CCI has further amended the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (‘Combination Regulations’). The amended Combination Regulations are effective from 15 August 2019.

The Combination Regulations provide the procedural framework for notifying the CCI of any acquisition, merger, or amalgamation, which constitutes a ‘combination’ under the Act. Parties to a combination are obliged to notify the CCI disclosing the details of the proposed combination before consummation of the combination.

The significant changes effected by way of this amendment are as follows:

A. APPROVAL OF COMBINATIONS UNDER “GREEN CHANNEL”
The newly inserted Regulation 5A enables parties to avail of a “green channel” for approval of certain categories of combinations. The categories of combinations which can avail of the Green Channel route are set out under the newly inserted Schedule III to Form I.

Combinations falling under Schedule III shall be deemed to be approved by the CCI upon filing.

• When can parties avail the “Green Channel” route?
  The parties to the combination may avail of the Green Channel route where their respective group entities and/or entities in which they directly/indirectly hold shares or which they control:
  • No horizontal overlap – Do not produce/provide similar or identical or substitutable product(s) or services(s);
  • No vertical relationship – Are not engaged in any activity relating to production, supply, distribution, storage, sale and service or trade in product(s) or provision of service(s) which are at a different stage or level of the production chain; and
  • No complimentary products or services – Are not engaged in any activity relating to production, supply, distribution, storage, sale and service or trade in product(s) or provision of service(s) which are complementary to each other.

• How to notify for Green Channel route to CCI?
  The notification to the CCI under the Green Channel route is also to be made in Form I. The
  Notification also prescribes a new Form I, setting out additional information requirements, including, for instance, details of interconnected transactions etc. Moreover, the Form I notice under the Green Channel route is also to be accompanied by a declaration under Schedule IV to Form I, which inter alia requires the notifying party to state whether or not the combination is covered under Schedule III.

• Effect of incorrect declaration under Schedule IV
  If the CCI finds that the declaration under Schedule IV is incorrect and that the parties have incorrectly availed of the benefit under the Green Channel route, the approval granted shall be held void ab initio. In such cases, the CCI shall deal with the combination in accordance with the provisions of the Competition Act, 2002 (“Act”).

However, the Regulations grant a right of hearing to the parties to combination, before the CCI arrives at a finding that a combination is not eligible for the green channel benefit.3

B. “SINGLE SUMMARY” INSTEAD OF SHORT AND LONG SUMMARIES EARLIER
The new Regulation 13A of the Combination Regulations provide for a single summary of the proposed combination, whereas, the Combination Regulations earlier prescribed both a short as well as a long summary.

For any further details and clarifications, please feel free to write to:
Mr. M M Sharma, Head – Competition Law, [email protected]