CCI’s role in regulating M&A transactions is crucial, but the ‘material influence’ test in India’s Competition Act amendments may impact M&A activity, with suggestions needed for clarity.
Authors
Sidharth Chauhan, Associate Professor, Jindal Global Law School, O.P. Jindal Global University, Sonipat, India; Jindal Initiative on Research in IP and Competition, O.P. Jindal Global University, Sonipat, India; Berkman Klein Center for Internet & Society, Harvard University, Cambridge, MA, United States; Centre for Business Law, Khaitan & Co, Sonipat, India; Monash University, Melbourne, VIC, Australia; GW Competition & Innovation Lab, The George Washington University, United States
Dhruv Mehta, Veritas Legal, Mumbai, India
Summary
The Competition Commission of India (CCI) has a crucial role to play in reviewing, approving, modifying, or rejecting M&A transactions that are anticompetitive. M&A activity saw a huge increase in 2022 in India. However, high interest rates, and political uncertainty led to slump in M&A activity early 2024. The Parliament has passed various amendments to the Competition Act, 2002. One of the major amendments is the change in the standard of “control” from decisive influence to material influence standard. The material influence test, as adopted by the CCI, has various shortcomings. The authors, through this paper, highlight the impact of the material influence test on M&A in India and showcase the various shortcomings of this test. The authors conclude by providing a few suggestions as to how the CCI should approach the ambiguous position pertaining to “control,” keeping in mind its impact on M&A activity.
Published in: Antitrust Bulletin
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