COMPETITION LAW

COMMON OWNERSHIP WRT TO OLA-UBER CASE

The Competition Commission of India ("CCI") through a recent common order, In Re: Meru
Travel Solutions Pvt. Ltd. ("Informant") v. M/S ANI Technologies Pvt. Ltd ("Ola"), M/S Uber
India Systems Pvt. Ltd., Uber B.V., and Uber Technologies Inc.("Uber") (collectively referred
to as "Opposite Parties") held that that no case was made out against the Opposite Parties
of prima facie dominance in the relevant market and have not contravened Sections 3 and 4
of the Competition Act, 2002 ("Act").

1. price discrimination (Section 2)

2. Tying and exclusive dealing agreements (Section 3)
3. Interlocking directorates (Section 8)

oscola
Author, Title (edition, Publisher | year) page number.
Bibliography
Author, Title (edition, Publisher | year)

R Moorhead, 'Solicitors First' (Lawyer Watch, 25 March 2011)

<http://lawyerwatch.wordpress.com/2011/03/25/solictiors-first/>
accessed 13 April 2011.

Mergers and Acquisitions (M&A) and Competition Laws in India

In India, M&A activities are primarily governed by the Competition Act, 2002 (Act),
particularly Sections 5 and 6, along with the Competition Commission of India (CCI)
(Combinations) Regulations, 2011 (Combinations Regulations). This framework aims to
safeguard fair competition by scrutinizing M&A transactions that might create an
appreciable adverse effect on competition (AAEC).
Key Regulatory Steps and Considerations:

Notification Requirements:

Mandatory notification to the CCI is required for transactions exceeding specified

thresholds based on asset/turnover or deal value (as revised by the Competition
Amendment Act, 2023):
Asset/turnover thresholds: INR 2,500 crore or 50% of the combined Indian
assets/turnover of the parties
Deal value threshold: INR 2,000 crore
Form I (for acquisitions of control or shares) or Form II (for mergers/amalgamations)
must be filed within 30 days after the agreement or execution of relevant documents.
Incomplete or inaccurate notifications can lead to delays and penalties.

CCI's Review Process:

The CCI can approve, approve with modifications, or disapprove a transaction based on
its potential impact on competition, considering factors like:
Market definition and relevant product/service segments
Parties' market shares and combined post-merger share
Entry barriers and potential for new entrants
Countervailing factors (e.g., efficiencies)
The review period is typically 30 days (extendable to 60 days or more in complex cases).

Potential Outcomes:

Approval: Transactions with no AAEC are greenlighted.

Approval with Modifications: The CCI may impose conditions (e.g., asset
divestment, behavioral changes) to mitigate AAEC concerns.
Disapproval: If a substantial AAEC is found and cannot be adequately addressed, the
transaction may be disallowed.

Additional Regulatory Approvals:

Sector-specific regulations (e.g., telecom, pharmaceuticals) might impose additional

M&A approval requirements.
Approvals from other authorities (e.g., SEBI, RBI) may be necessary depending on the
transaction's nature.
Role of the Competition Commission of India (CCI):
The CCI is a statutory body empowered to enforce the Competition Act, including
M&A regulation.
It oversees notification of transactions, conducts investigations, and renders decisions on
approving or disapproving M&A deals.
The CCI plays a critical role in promoting fair competition, protecting consumer
interests, and fostering economic growth in India.
Recent Developments:
The Competition Amendment Act, 2023, introduced the deal value threshold, expanding
the CCI's review scope.
Draft CCI (Combinations) Regulations, 2023, propose streamlining the M&A review
process and simplifying compliance. (These are subject to change before finalization.)
Additional Considerations:
Seek professional legal and financial advice to navigate the M&A process and comply
with regulatory requirements.
Stay updated on evolving competition laws and regulatory procedures.
Sources:
Competition Commission of India (CCI) website: https://www.cci.gov.in/
Cyril Amarchand Mangaldas: https://competition.cyrilamarchandblogs.com/
Majmudar & Partners: <invalid URL removed>
AZB & Partners: https://www.azbpartners.com/bank/merger-control-in-india-overview/

You're correct that India's antitrust jurisprudence, embodied in the Competition Act, 2002,
draws significant inspiration from the United States' antitrust laws. Here are some key points
of influence:

Similarities in Approach:

Prohibition of Anti-Competitive Agreements: Both India and the US ban agreements that
restrict competition, such as price fixing, market allocation, and group boycotts.
Merger Control: Both have regulatory frameworks to review M&A transactions for potential
anti-competitive effects.
Unilateral Conduct Scrutiny: Both can investigate and address anti-competitive practices by
dominant firms, like predatory pricing or exclusionary conduct.
Consumer Welfare Focus: Both laws aim to protect consumer interests by promoting
competition and preventing market distortions.
Key Differences:

Thresholds and Tests: While both employ similar tests (e.g., rule of reason), India's thresholds
for triggering investigations are generally higher.
Sector-Specific Regulations: India has additional sector-specific regulations beyond the core
competition law, whereas the US relies more on case-by-case enforcement.
Competition Advocacy: India is developing its competition advocacy efforts, while the US
has a more established system for promoting competition-friendly policies.
Specific Inspirations:

Sherman Act: The Sherman Act (1890) serves as a model for India's prohibition of anti-
competitive agreements.
Clayton Act: Sections of the Clayton Act (1914) on mergers and interlocking directorates
influenced India's M&A control framework.
Hart-Scott-Rodino Antitrust Improvements Act (HSR Act): India's M&A notification
requirements resemble the HSR Act's provisions.
Evolution and Divergences:

While inspired by US laws, India's competition jurisprudence has adapted to its specific
economic and legal context.
India's focus on protecting small and medium enterprises and its broader objectives beyond
consumer welfare reflect these adaptations.
In conclusion, India's antitrust laws share substantial common ground with those of the US,
drawing inspiration from their core principles and frameworks. However, they also exhibit
key differences tailored to India's unique economic and legal landscape. As both economies
continue to evolve, their antitrust regimes might diverge further while still maintaining some
degree of mutual influence.
Chapter 4: Scrutiny of M&A Deals under Antitrust Laws

4.1 s
4.2.1 Horizontal Mergers
4.2.2 Vertical Mergers
4.2.3 Conglomerate Mergers
4.3 Case Studies of Notable M&A Deals and CCI Decisions
4.4 Chapter 5: Impact of Antitrust Laws on M&A Deal Structuring and Negotiation

5.1 Strategies for M&A Parties to Address Antitrust Concerns

5.2 Negotiating M&A Deals with Antitrust Considerations in Mind
5.3 Impact on Deal Valuation and Transaction Timeline
5.4
6.1

7.1 Summary of Key Findings and Inferences

7.2 Contributions of the Dissertation to the Field
7.3 Limitations and Scope for Further Research
Appendices

Glossary of Terms
Relevant Legislation and Regulatory Guidelines
Case Studies and Data Analysis
Bibliography
Please note: This is a suggested table of contents and can be adapted to fit your specific
research focus and interests. Remember to tailor the chapters, subheadings, and content to
reflect your chosen dissertation approach and research questions.

DEPARTMENT OF JUSTICE’S REVIEW

The DOJ had already reviewd the merger and its affect on the market competition and gave it
a greenlight of The Clayton Antitrust Act and the Sherman Antitrust Act1. The DOJ had
received notification by the respective companies before merger in 1995. The Clayton Act
had declared few acts illegal but not criminal2:
4. Corporate mergers that tend to result in monopoly (Section 7)
Similarly
2.1 History and Evolution of Antitrust Laws in India
2.2 The Competition Act, 2002: Key Provisions
2.2.1 Anti-Competitive Agreements (Section 3)
2.2.2 Abuse of Dominant Position (Section 4)
2.2.3 Mergers and Acquisitions (Section 5)
2.3 Role and Powers of the Competition Commission of India (CCI)
2.4 Recent Developments and Proposed Amendments to the Competition Act

Chapter 3: M&A Activity in India and its Significance

3.1 Trends and Drivers of M&A Activity in India
3.2 Impact of M&A on the Indian Economy
3.3 Key Sectors Witnessing High M&A Activity

1
ABA SECTION OF ANTITRUST LAW, Mergers and Acquisitions- Understanding the Anti-Trust issues (3rd
edition, 2008) 15
2
Keith N. Hylton, Antitrust Law Economic Theory and Common Law Evolution (Cambridge University Press) 90
3.4 Role of Cross-Border M&A in the Indian Context

Chapter 4: Thresholds for Merger Notification under the Competition Act

4.2 Assessment Framework and Competition Analysis of M&A Deal
4.3 Challenges and Uncertainties in Applying Antitrust Laws to M&A

Chapter 5: Critical Evaluation and Recommendations

5.1 Future Directions for Antitrust and M&A in India
5.2 Effectiveness of Antitrust Laws in Regulating M&A Activity in India
5.3 Balancing Competition Concerns with Economic Growth and Efficiency
5.4Recommendations for Strengthening the Antitrust Regulatory Framework
Case Studies of Successful M&A Deals Navigating Antitrust Scrutiny

A lawsuit was filed by one of the majority shareholder of Chrysler Kirk Kerkorian alleging
that the officials of company filed a misrepresented the merger as “merger of equals” instead
the Chrysler division executives were following orders and directives of the Daimler’s
officials3. This merger was also approved by the Department of Justice of the United States of
America, but it couldn’t grow or sustain itself in the market because of cultural differences.
The Daimler-Chrysler merger serves as a case study in how competition authorities assess
mergers based on market dynamics and potential impacts.

The recent draft of the Competition Commission of India (Combination) Regulations, 2023,
addresses some of the ambiguities surrounding these criteria. For instance, it clarifies that the
'value of the transaction' includes direct and indirect considerations and 'substantial business
operations' is determined based on user count, gross merchandise value, or turnover in India.
However, several questions remain unanswered. For instance, how would the value of a
transaction be calculated in the case of an overseas target with significant business operations
in India? Would the CCI consider the overall purchase price or just the value attributable to
the India leg of the transaction?
Further, the DV Threshold could potentially overlook certain transactions. For example, in
scenarios where acquirers require allied services from promoters or promoter-run companies
for a period post-closing, the composite payments made for the acquisition and these services
over time could exceed the DV Threshold. Yet, because these individual transactions are not
considered combinations, they could evade the regulatory approval of the CCI.
The definition of the 'value of the transaction' also lacks clarity. Will this value refer to the
equity value paid for the purchase of the target or the enterprise value of the target? If only
the equity value is considered, companies with high enterprise value but low equity value
could circumvent scrutiny.

The commission clarified that examining a likelihood of appreciable adverse effects arising
from an agreement is different from examining the likelihood of the conduct itself. In simpler
terms, until anti-competitive conduct is proven post-facto, there’s no ground for investigation.
3
Danny Hakim, DaimlerChrysler Heads to Court Over ‘98 merger, The New York Times
https://www.nytimes.com/2003/11/28/business/daimlerchrysler-heads-to-court-over-98-merger.html Accessed on
9th February, 2024
The commission clarified that examining a likelihood of appreciable adverse effects arising
from an agreement is different from examining the likelihood of the conduct itself. In simpler
terms, until anti-competitive conduct is proven post-facto, there’s no ground for investigation.

 Change the rule to consider the total cost of the

deal, including future payments.
United Airlines and Continental Airlines in 2010. After the acquisition, United Airlines
became the dominant airline in the United States, while Continental Airlines was rebranded as
United Continental Holdings. This merger created a hub and spoke network, with United
primarily operating as a hub at its headquarters in Denver, Colorado, and Continental
operating as a spoke system with smaller hubs throughout the United States. This structure
allowed United to control a larger portion of the US airline market and generate significant
revenue from connecting passen

A hub and spoke cartel can be defined as the indirect exchange of information between two
independent undertakings which are horizontal competitors on the supplier or retailer level
(“spokes”), through another undertaking operating at a different level of the production or
distribution chain (“hub”). The hub facilitates the coordination of competition between the
spokes without direct contacts between the spokes

In this model, the airlines established major hubs in strategic locations, where they
concentrated their operations and connected flights. These major hubs acted as central
points for connecting various spoke routes that linked the hub to smaller destinations.
This hub and spoke system allowed the airlines to centralize traffic, optimize aircraft
utilization, and provide connectivity to a wide range of destinations, thereby enhancing
their overall operational efficiency and network reach.

For instance, in 2016, the European Commission fined the pharmaceutical companies Johnson
& Johnson and Novartis for participating in a "pay-for-delay" agreement, which can be
considered a form of hub and spoke cartel behavior

KEY LEGAL ISSUES

However, this new DVT4 is in itself vague as it is not covering few areas. As it is potentially
overlooking certain how would the value of a transaction be calculated in the case of an
overseas target with significant business operations in India? Would the CCI consider the
overall purchase price or just the value attributable to the India leg of the transaction?
Further, the DV Threshold could potentially overlook certain transactions. For example, in
scenarios where acquirers require allied services from promoters or promoter-run companies
for a period post-closing, the composite payments made for the acquisition and these services
over time could exceed the DV Threshold. Yet, because these individual transactions are not
considered combinations, they could evade the regulatory approval of the CCI.
Regulation 4 of the The Competition Commission of India (Combinations)
Regulations, 2023 has added two new clauses to cover a wider ambit of operations
and mergers. For instance, it clarifies that the 'value of the transaction' includes direct
and indirect considerations and 'substantial business operations' is determined based

4
Deal Value Threshold
 on user count, gross merchandise value, or turnover in India.5This new development
is particularly significant for acquisitions in the digital sector, where traditional asset
and turnover thresholds often fail to capture the true value and potential impact of a
deal.

5
The Competition Commission of India (Combinations) Regulations, 2023,
https://cci.gov.in/images/stakeholderstopicsconsultations/en/draft-combinations-regulations1693891636.pdf
Accessed on 14th February, 2024