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The Indian Competition (Amendment) Act, 2023 – The Good, the Bad and the Ugly

Aman Singh Sethi, Shweta Chopra, and Ritwik Bhattacharya


  • The Competition (Amendment) Act 2023, passed by the Government of India, marks a significant overhaul of Competition Act 2002, introducing substantial changes to both merger control and enforcement provisions.
  • Competition (Amendment) Act 2023, brings substantial changes to India's competition law regime, focusing on enhancing efficiency, transparency, and deterrence against anti-competitive practices.
  • Shifts to penalties based on global turnover increases exposure for companies and is accompanied by Penalty Guidelines and Turnover and Income Regulations providing clarity and transparency in penalty computation.
The Indian Competition (Amendment) Act, 2023 – The Good, the Bad and the Ugly
Darren Robb via Getty Images


Last year, the Government of India passed the Competition (Amendment) Act, 2023 (“Amendment Act”) which introduces wide-ranging changes to the Competition Act, 2002 (“Competition Act”). The Amendment Act has substantially revised both the merger control and the enforcement provisions of the Competition Act and is the most significant overhaul of the competition law regime in India since its inception.

 On the merger control front, some key changes include: (a) the introduction of a deal value threshold (“DVT”), in addition to the existing asset and turnover based thresholds; (b) derogation of standstill obligations for certain on-market purchases; (c) codifying the definition of control to the “material influence” standard; and (d) the introduction of expedited merger review timelines On the enforcement front, some significant changes include: (a) the explicit inclusion of hub and spoke cartels and facilitators of cartels; (b) the introduction of a framework for accepting settlements and commitments for cases concerning vertical agreements and abuse of dominance; (c) the introduction of a ‘leniency plus’ mechanism wherein a leniency applicant applying for leniency for one cartel can also disclose the existence of another cartel (and receive a lesser penalty for both cartels); and (d) enhancement of penalties, as a result of shifting the yardstick from ‘relevant turnover’ to ‘global turnover’, for cases relating to anti-competitive agreements or the abuse of a dominant position.

The key enforcement related amendments (including the inclusion of hub and spoke cartels, settlement and commitment framework, the leniency plus mechanism and enhancement of penalties) have already been brought into force. However, most of the merger control related changes (including DVT, derogation of standstill obligations and expedited merger review timelines) have still not come into effect and require the Competition Commission of India (“CCI) to first formulate implementing regulations. The CCI has got the ball rolling and has published draft regulations for public consultation on these merger-related provisions. However, the final regulations are still awaited. 

A few key amendments are discussed below. 

DVT: Entering Uncharted Territories


One of the most significant changes introduced under the Amendment Act is the introduction of a “deal value” threshold. Previously, the Competition Act only prescribed asset and turnover based thresholds. The CCI expressed concerns that asset and turnover based thresholds were resulting in a number of important transactions (especially in the digital and infrastructure space) falling outside the CCI’s jurisdictional net, as the asset and/or turnover values were below the jurisdictional thresholds or, more importantly, the transactions benefited from the de minimis target exemption (which is also based on asset and turnover values of the target).

Accordingly, the Amendment Act has introduced an additional threshold, requiring notification of transactions where: (a) the deal value is in excess of INR 20 billion (approx. USD 252 million); and (b) where the target has “substantial business operations in India”. Critically, the de minimis target exemption shall not be applicable to transactions caught under this threshold.

The Amendment Act provides that the CCI shall issue regulations setting out the methodology for computing the deal value and assessing whether the target has “substantial business operations in India”.

Draft Regulations

The CCI issued the draft Competition Commission of India (Combinations) Regulations, 2023 (“Draft Combination Regulations”) for public comment on 5th September 2023.

The Draft Combination Regulations, inter alia, set out the proposed conditions for both limbs of DVT, i.e., computation of deal value and assessing substantial local business operations.

In relation to the first limb, the Draft Combination Regulations provide that the deal value “shall include every valuable consideration, whether direct or indirect, immediate or deferred, cash or otherwise, ...” and provide a non-exhaustive list of considerations that must be included when computing the deal value. The Draft Combination Regulations clarify that considerations regarding: (a) non-compete covenants; (b) all incidental arrangements entered into between the parties within two years of the transaction; (c) any future events; and (d) all interconnected steps, must be included in the computation of deal value. The Draft Combination Regulations also state that all transactions between the acquirer (including its group entities) and the target, any time prior to two years from the current transaction, shall be deemed to be interconnected to the current transaction.

Whilst the proposed conditions are largely in line with the position in other jurisdictions (such as Germany and Austria, which also have a deal value threshold), a few concerns arise. For instance, the “deemed” interconnection of all transactions within a two-year timeframe means that transactions that may be entirely independent and separate will be viewed as interconnected, merely based on one factor, i.e., timing.

This approach would be particularly detrimental for start-ups, which frequently secure funding from the same set of investors at different stages. As a result of the deeming provision, they would need to consider the aggregate value of all past investments / funding (within a 2-year timeframe), while considering the deal value for any subsequent funding round. This will result in an unnecessary increase in filings and is likely to create uncertainty and regulatory burdens for start-ups, which in turn is likely to dampen the start-up ecosystem and negatively impact the Government’s ‘ease of doing business’ initiatives.

An assessment of interconnection should instead be a factual one, carried out on a case-by-case basis. In fact, previously, the CCI adopted a case-by-case factual assessment in order to determine interconnection, based on a host of factors, including: (a) simultaneity in negotiation, execution, and consummation of the transaction documents; (b) whether the two transactions stemmed from a single transaction document; (c) if closing of one step of the transaction is a condition precedent to closing of the other transaction; and (d) commercial feasibility of isolating the transactions (see Competition Commission of India v. Thomas Cook (India) Ltd., Civil Appeal No. 13578 of 2015). Therefore, the CCI has not relied solely on timing. A similar pragmatic assessment should be undertaken here as well and, therefore, this deeming provision ought to be deleted in the final regulations.

On the second limb of DVT, i.e., “substantial business operations in India”, the Draft Combination Regulations prescribe that this condition shall be met if the target enterprise has, in India, 10% or more of its total global: (a) users, subscribers, customers, or visitors, at any point in time in the last 12 months; or (b) gross merchandise value, for 12 months preceding the relevant date; or (c) turnover derived from all products and services, for the preceding financial year.

The proposed conditions for this limb are a mixed bag. On the upside, the proposed test is more definitive when compared to tests prescribed in many other jurisdictions. For instance, the 10% threshold provides a clear yardstick for companies to assess whether the thresholds are met. Such definitive thresholds are not provided in other jurisdictions such as Germany and Austria, which lack any quantifiable (percentage or absolute) figures in their tests. On the downside, some of the proposed conditions are likely to create uncertainty and difficulty in relation to implementation. For instance, inclusion of “visitors” as a metric is concerning, as “visitors” are not an accurate indicator of sales, economic value, or competitive presence. A brick-and-mortar store may receive hundreds of “visitors” who do not make any purchases. Similarly, a technology-based company (for instance, a company selling mobile phones or laptops) may set up experience centres which receive hundreds of “visitors” daily, but such “visitors” may not be making any purchases. Additionally, an e-commerce website may receive many “visitors” on its website who do not end up making any purchases or use any services provided by the company. Therefore, visitors (in and of itself) do not represent sales, economic value or the competitive significance of an enterprise and it is therefore not a suitable indicator to assess “substantial business operations”. Further, it may not be feasible to track ‘visitors’, especially in non-digital sectors and, therefore, this is likely not implementable in any practical or reliable way. Inclusion of “visitors” as a metric is also inconsistent with the position in most other jurisdictions with deal value thresholds (such as Austria, Germany, the United States and Japan).

Additionally, the conditions prescribed are currently sector agnostic. However, in non-digital markets, the value of sales / turnover is the most appropriate metric to assess market power. Therefore, it would be helpful if metrics such as users, subscribers and customers are limited to digital markets.

It will be interesting to see if and to what extent the proposed conditions are revised in the final regulations.

In any event, the introduction of DVT is a significant step in India’s merger control framework and will likely increase the number of transactions notified to the CCI.

Derogation of Standstill Obligations: A Welcome Change


The introduction of a derogation from the standstill obligations for open market purchases / stock market acquisitions is a key amendment to the Competition Act. In the past, given the time-sensitive nature of these transactions, the CCI’s suspensory merger control regime created hurdles and the price sensitivity of such transactions meant that the obligation to notify the CCI and defer consummation until approval could render such transactions unviable. Recognizing these difficulties, the Amendment Act provides a derogation from the standstill obligation for open market purchases. This change is consistent with the Government’s ‘ease of doing business’ initiatives and will remove the roadblock that investors currently face in undertaking open market purchases. It also aligns the Indian framework with the position in other jurisdictions, such as the European Union and Brazil, which allow for similar derogations.

The Amendment Act provides that the detailed framework for such derogations shall be provided under regulations to be formulated by the CCI.

Draft Combination Regulations 

The Draft Combination Regulations clarify that: (a) parties must file a notification form for such transactions within thirty days from the date of first acquisition of shares of the target; and (b) the acquirer should not influence the target enterprise in any manner, until the CCI approves the transaction. However, the acquirer is permitted to: (a) avail economic benefits such as dividends; (b) dispose of the securities; and (c) exercise voting rights in respect of liquidation and/or insolvency proceedings, pending the CCI’s approval.

This is a pragmatic approach and strikes a balance between allowing parties to capitalize on market opportunities and reap the economic benefits of investments, whilst also ensuring that they do not start exercising control over the target prior to the CCI’s approval. It remains to be seen if any of the conditions are revisited under the final regulations.

Settlement and Commitments Framework: A Long Awaited Change

A long-awaited change on the enforcement front is the recent introduction of a settlements and commitments framework, allowing parties to settle or make commitments in cases of vertical agreements and abuse of dominance cases, in order to close such cases. The mechanism will not be available in cartel cases, as these are covered separately by a leniency regime. Commitments will typically be considered within 45 calendar days from the issuance of a prima facie order initiating an investigation, whereas settlements will typically be considered within 45 calendar days from issuance of the Director General’s (“DG") investigation report.

The Amendment Act introduced the enabling provisions, and the detailed framework has been prescribed by the CCI through regulations, namely, the Competition Commission of India (Settlement) Regulations, 2024 (“Settlement Regulations”) and Competition Commission of India (Commitment) Regulations, 2024 (“Commitment Regulations(collectively referred to as the “Settlement and Commitment Regulations), which came into force in March 2024.

The Settlement and Commitment Regulations explicitly provide that an order passed by the CCI agreeing to a proposal for settlement or commitments offered shall not be construed as a finding of a contravention by the CCI against the applicant proposing a settlement or commitment. This is helpful and will provide significant impetus for parties to avail themselves of this framework. However, given that the Amendment Act specifically allows for follow-on actions for damages in the case of settlements, it remains to be seen how this dichotomy will be resolved as damages can typically be claimed only once a contravention has been established.

Additionally, the Settlement and Commitment Regulations provide overtly short timelines for submitting settlement or commitment applications (i.e., typically only 45 calendar days, as discussed above), which may disincentivize parties and hamper the effectiveness of the settlement and commitments mechanism.

 Further, the Settlement and Commitment Regulations do not provide a mechanism for any substantive discussions / deliberations between the applicant and the CCI. A deliberative process would have been more effective in resolving concerns and evaluating possible pragmatic solutions. In addition, the Settlement and Commitment Regulations also require the applicant to file certain undertakings, including that it: (i) agrees to submit to the jurisdiction of the CCI; and (ii) waives its right to: (a) initiate legal proceedings against the CCI in relation to orders of the CCI accepting offered settlements / commitments; (b) challenge the CCI’s findings of fact and conclusions of law; and (c) an appeal or review before the Appellate Tribunal or other courts. These undertakings could also dissuade parties from availing of this mechanism. 

Penalties Based on Global Turnover: Putting the Hammer Down

Another significant amendment on the enforcement front is the shift from the imposition of penalties based on relevant turnover in India, to global total turnover.

Mapping the Journey

In its initial years, the CCI levied penalties based on total turnover, which included the turnover of all the goods and services provided by the errant enterprise in India, leading to harsh and disproportionate penalties. In 2017, the Supreme Court of India, relying on the doctrine of proportionality, interpreted ‘turnover’ to mean ‘relevant turnover’, i.e., turnover of the products or services which were the subject matter of the contravention, in India.

However, the CCI expressed concerns that imposing penalties based only on Indian turnover was not a sufficient deterrent for large companies. Further, the CCI often grappled with computing ‘relevant turnover’, for instance, in cases involving big tech companies (where there are multiple markets offering free services; or when different products / services are closely linked and leverage off each other). 

To increase deterrence and address some of the computation issues highlighted above, the Amendment Act provides that penalties shall be computed based on total global turnover.

This is likely to lead to significant exposure for companies, particularly multi-product companies and multinationals with significant global turnover. 

Penalty Guidelines

In March 2024, the CCI introduced the Competition Commission of India (Determination of Monetary Penalty) Guidelines, 2024 (“Penalty Guidelines”), to provide clarity on the methodology, the amount and the factors to be used by the CCI in computation of penalties. Although the Penalty Guidelines are not legally binding on the CCI, it is a significant step in bringing transparency in the method of calculating penalties, especially since the CCI now has the power to impose penalties with reference to an enterprise’s global turnover.

The Penalty Guidelines provide that for the determination of the base penalty, 30% of the average relevant turnover (or global turnover if it is not possible to determine relevant turnover) for a period of 3 years preceding from the year in which the DG report is received by the CCI is to be considered. The Penalty Guidelines also set out the mitigating and aggravating factors which the CCI may consider while determining the penalty, without specifying the extent of addition or discount each such factor will have on the determination of the final penalty. The CCI also has the power to impose a higher penalty (up to the maximum legal cap), if the penalty derived after all the calculations is found to be insufficient to create a deterrent effect.

Turnover Regulations

In March 2024, the CCI also introduced the Competition Commission of India (Determination of Turnover or Income) Regulations, 2024 (“Turnover and Income Regulations”), which provides the nature of turnover / income required to be considered by the CCI while imposing penalties under Sections 27 and 48 of the Competition Act. The Turnover and Income Regulations clarify that “turnover” includes the value of sales or operating revenue as recorded in the audited financial statements of the enterprise. Indirect taxes, trade discounts, intra-group sales and other income are required to be excluded from the calculation of turnover. In relation to individuals, income shall be the gross total income. The: (i) income from house property; and (ii) income from capital gains are required to be excluded. This provides helpful clarity on the inclusions / exclusions required while computing penalties.


India is witnessing a significant overhaul of its competition law regime, and the amendments are a mixed bag. Whilst certain changes are business friendly and consistent with the Government’s “ease of doing business” mission, others raise questions.

The CCI has an entirely new leadership. It will be interesting to see how the new Chairperson and Members navigate these developments and the enforcement priorities they set.