On 20 May 2025, the Competition Commission of India (CCI) issued revised Frequently Asked Questions (FAQs), providing essential clarifications to the updated merger control framework introduced by the Competition (Amendment) Act, 2023, and its supporting regulations. Below are key highlights from these FAQs:
- Definition of Control: The 2023 Amendment has adopted 'material influence' as the standard for determining control. The FAQs provide an illustrative list of rights in order to provide a distinction between what kind of rights could be construed as control-conferring rights vis-a-vis investor protection rights.
- Deal Value Thresholds (DVT): The Amendment introduced a mandatory prior approval from CCI for transactions exceeding INR 2,000 crore if the enterprise being acquired or merged has significant business operations in India. The FAQs provide clarity on various aspects of DVT, including the calculation of transaction value, defining substantial business operations in India, and addressing situations involving call options, put options, and share swaps, amongst others.
- Inter-connected Transactions: The Regulation 9(4) of the CCI (Combinations) Regulations, 2024 require the parties to file a single notice where the ultimate intended effect of a business transaction is achieved through a series of inter-connected steps or transactions. The revised FAQs now lay down that the criteria for construing inter-connection should be whether there is an inter-se meeting of minds or mutual understanding with regard to the decision to invest in an entity.
- Commercially Sensitive Information (CSI): The FAQs also offer guidance on the type of information that would be classified as CSI under the newly introduced Competition (Criteria of Combination) Rules, 2024. This clarification outlines the types of information whose accessibility by one enterprise regarding another could establish an affiliate relationship.
- Acquisition of shares or Open Offers: Section 6A provides an exception to the provisions under sub-section (2A) of Section 6 and Section 43A of the Act, allowing the implementation of an open offer or acquisition of shares or convertible securities upon fulfilment of conditions prescribed therein. The FAQs now provide that a block deal and bulk deal can also avail benefit from the application of Section 6A. In contrast, preferential allotments are excluded.
The release of the revised FAQs aims to foster greater clarity and promote compliance with competition law, reflecting the regulator's proactive commitment to enhancing India's competition framework. Detailed FAQs can be accessed here: https://www.cci.gov.in/images/whatsnew/en/faq-book-english-compressed1747724324.pdf
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