The government is likely to amend the Competition Act, i.e. Merger Regulation Law. Tech giants present in India may get stricter laws to abide by.
Crux of the Matter
To maintain equilibrium in the local competition, the government has planned to introduce a new set of rules for Mergers and Acquisitions (M&As) of companies.
Competition Commission (CCI) of India will enforce this law.
Only assets size and revenue are taken into consideration to regulate M&As of companies but now deal size will also be included in the scrutiny process.
Need for amendment arose when Facebook acquired WhatsApp in a deal worth $19 billion that affected the local competition in several ways.
According to the new amendment, individuals companies involved in M&As having assets in India worth over Rs. 1000 crores or revenue over Rs. 3000 crores will need CCI approval.
For companies having global partners possessing assets worth at least Rs. 500 crores or sales worth Rs. 1500 crores in India will also need CCI clearances.
“We want an enabling provision in the law so that we can deal with M&As better,” said CCI Chairman Ashok Kumar Gupta.
Curiopedia
Competition Commission of India – Competition Commission of India is a statutory body of the Government of India responsible for enforcing The Competition Act, 2002 throughout India and to prevent activities that have an appreciable adverse effect on competition in India. It was established on 14 October 2003. It became fully functional in May 2009 with Dhanendra Kumar as its first Chairman. More info
Competition Act 2002 – The Competition Act, 2002 was enacted by the Parliament of India and governs Indian competition law. It replaced the archaic The Monopolies and Restrictive Trade Practices Act, 1969. Under this legislation, the Competition Commission of India was established to prevent the activities that have an adverse effect on competition in India. More info
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