The Competition (Amendment) Act, 2023: Implications for Mergers and Acquisitions

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The Competition Act of 2002 represents a seminal piece of legislation in India, pivotal in advocating for competition and protecting the interests of consumers. Recent times have borne witness to an escalating propensity for mergers and acquisitions (M&As) within the Indian business landscape, driven by corporate endeavors to expand market presence and acquire novel capabilities. To safeguard against any negative repercussions on competition, the Competition Commission of India (CCI) is empowered to meticulously scrutinize and sanction M&A transactions surpassing specific thresholds. Notably, a recent development pertains to the CCI’s introduction of an augmented deal value threshold. Henceforth, M&As involving a deal value of INR 2,000 crore or more necessitate mandatory notification to the CCI, marking a substantial alteration from the previous benchmarks of INR 1,000 crore for assets and INR 3,000 crore for turnover.

In addition to the new deal value threshold, the Competition (Amendment) Act, of 2023, also introduces several other changes which are likely to impact M&As in India. These changes include a new framework for the settlement of competition cases, a reduction in the time limit for the CCI to review M&As, and provisions for open offers and share acquisitions to be implemented before CCI approval. These changes include a new framework for settling competition cases, a shorter time limit for the CCI to review M&As, and requirements for open offers and share acquisitions to be implemented before CCI approval. These changes have been introduced to strengthen the CCI’s ability to effectively scrutinize M&As and safeguard competition in India.

New deal value threshold

The Competition Act, 2002 (the Act) prohibits mergers and acquisitions(M&As) that have an appreciable adverse effect on competition in India. Until recently, M&As were required to be notified to the Competition Commission of India (CCI) if they met either the asset or turnover thresholds. The asset threshold was INR 1000 crore and the turnover threshold was INR 3000 crore. The Competition (Amendment) Act, 2023 (the Amendment Act) puts forward a new deal value threshold of INR 2000 crore. This means that all M&As involving a deal value of INR 2000 crore or more will now require mandatory notification to the CCI, regardless of whether the parties meet the asset or turnover thresholds.

The introduction of the new deal value threshold is a key development in the Competition law of India. It will bring a wider range of M&As under the purview of the CCI, including transactions in new and emerging sectors, such as digital markets and the gig economy. The new threshold is also expected to streamline the review process for M&As. Under the previous regime, businesses often had to spend time and resources to determine whether their mergers and acquisitions (M&A) transactions met the asset or turnover thresholds. The new deal value threshold provides greater certainty to businesses, as they will now know clearly whether their transaction requires mandatory notification to the Competition Commission of India (CCI).

The impact of the new deal value threshold on businesses and consumers is likely to be mixed. On the one hand, the new threshold may increase the compliance burden for businesses, as they will now have to notify the CCI of a wider range of M&As. On the other hand, the new threshold is also expected to reduce the time and cost of the M&A review process. This could benefit both businesses and consumers, as it could lead to more timely and efficient completion of M&A transactions. The new deal value threshold is a positive step, as it will help the Competition Commission of India (CCI) to effectively scrutinize M&As that could have a significant impact on competition in India. However, there are some potential implementation and enforcement challenges that the CCI will need to address. The CCI should develop clear guidelines and procedures for implementing and enforcing the new threshold. It is also important for the CCI to ensure that the new threshold does not place an undue burden on businesses, especially small businesses and startups.

Reduction in time for approval

Under the previous legislation, the Competition Commission of India (CCI) was granted a total of 210 days to make a determination regarding combinations. However, the new Bill reduces this time frame to 150 days. If the CCI does not make a decision within this period, the combination will be automatically considered approved. This transformation also shortens the initial 30-day window to form a prima facie opinion to just 20 days from the date of application. While this adjustment may appear to burden the CCI, the Commission’s extensive experience in efficiently resolving complex competition transactions within reasonable timeframes enables quicker and more reliable decision-making, which in turn bolsters business confidence. Previously, businesses were obliged to notify the CCI of impending deals within 30 days of the execution of amalgamations, mergers, or agreements. The amendment eliminates this fixed timeline, opting instead for a case-by-case determination. This change allows parties greater flexibility in the notification process, which now occurs prior to the consummation of the combination.

The definition of “control” in relation to categorizing business combinations has also been refined. “Control” is now characterized as the ability to exert significant influence over a company’s strategic and critical commercial decisions, including management and important affairs. This adjustment introduces greater clarity and precision in the scrutiny of transactions.

A new definition of “control”

The Amendment Act introduces a new definition of “control” in the context of M&As. Under the previous regime, “control” was defined as having the ability to manage or influence the affairs of an enterprise. The Competition (Amendment) Act of 2023 expands this definition to include the ability to exercise “material influence” (which is considered to be the lowest degree of control) over the strategic and important commercial decisions of an enterprise.

The revised definition of “control” is poised to exert a substantial influence on the scrutiny of M&A deals by the CCI. As a result, the CCI is expected to be more inclined to conclude that an M&A transaction has led to the establishment or reinforcement of a dominant market position, even in cases where the acquiring party does not possess direct control over the target company.

Requirement for parties to notify the CCI of their intention to consummate an M&A transaction before the transaction is finalized

Under the prior regulatory framework, companies were mandated to inform the CCI about an impending M&A deal within a 30-day window from the moment they formalized the agreement to proceed with the transaction. However, the Amendment Act eliminates this specific timeframe and, in its place, necessitates companies to apprise the CCI of their intent to finalize the transaction before actually doing so.

This modification is expected to afford the CCI additional time for the comprehensive assessment of M&A transactions and to implement any necessary measures to safeguard competition. Furthermore, it is likely to raise the bar for businesses seeking to execute M&A transactions with an element of surprise, as they will now be compelled to pre-notify the CCI before proceeding.

Open offers and share acquisitions

The Competition (Amendment) Act of 2023 introduces significant changes to the Competition Act of 2002, particularly regarding open offers and share acquisitions in India. These changes are poised to reshape how these transactions are conducted in the country. One major change is that it allows open offers and share acquisitions related to a combination to occur on regulated stock exchanges before receiving the approval of  CCI. However, it is important to note that the acquirer cannot exercise ownership rights or enjoy benefits until obtaining the necessary regulatory clearance.

The new provision gives acquirers more flexibility, allowing them to start open offers or buy shares from the open market more easily and efficiently. However, it is important to note that the acquirer cannot take control of the target company until the CCI approves the deal, which protects the interests of minority shareholders and other stakeholders.

Overall, these amendments have a beneficial impact on the Indian market. They make the process for acquirers easier while upholding the rights of minority shareholders and ensuring that the CCI has the chance to review and approve combinations before they are completed.

Other notable changes post the Amendment

New framework for the settlement of competition cases: The Amendment Act introduces a fresh structure for the resolution of competition-related cases, aimed at simplifying the process for businesses and reducing the time and expenses associated with legal disputes. Under this framework, businesses will have the option to approach the CCI with a proposition to resolve a competition case amicably. Should the CCI accept this proposition, the involved parties will have the opportunity to formalize a settlement agreement with the CCI. This settlement agreement will carry legal weight, obligating the parties to adhere to its terms, and the CCI will have the authority to enforce it.

This innovative framework is expected to receive a warm reception from businesses, as it offers them a more streamlined and efficient avenue for addressing competition cases. It facilitates quicker and more effective resolutions, benefiting both businesses and the regulatory process.

3-year limitation period for filing complaints: The Competition (Amendment) Act of 2023 puts forward a 3-year limitation period for filing complaints with the Competition Commission of India (CCI). This means that the CCI will not entertain complaints where the cause of action is more than 3 years old. However, the CCI may accept information or references filed after 3 years if it is satisfied that there was a sufficient cause for the delay and it records its reasons for doing so.

Power to call expert witness: The Amendment Act also grants parties to an investigation the right to call expert witnesses from the fields of economics, commerce, international trade, or any other discipline. This was not previously allowed under the Competition Act of 2002.

An appeal challenging the decree of the CCI is predicted to be costly: The Amendment mandates a mandatory deposit of 25% of the penalty assessed for parties planning to appeal a CCI penalty before the NCLAT. The deposit sum is not defined under the current regime. In reality, however, the NCLAT (at its discretion) orders parties to deposit 10% of the fine amount and, in some circumstances, has sometimes required bigger deposits (of 25%).


The Competition (Amendment) Act of 2023 has ushered in significant changes to India’s competition landscape, particularly concerning mergers and acquisitions (M&As). These changes bear implications that extend across various facets of the M&A process and competition regulation.

First and foremost, the introduction of a new deal value threshold marks a pivotal shift, encompassing a broader spectrum of M&A transactions within the purview of the Competition Commission of India (CCI). This change not only simplifies the compliance process but also aligns with the evolving dynamics of emerging sectors. Additionally, the reduction in the time frame for CCI approval streamlines the review process, fostering greater efficiency and timeliness in M&A transactions. However, it underscores the imperative for businesses to pre-notify the CCI before proceeding with their transactions, diminishing the element of surprise.

The refined definition of “control” augments the CCI’s ability to scrutinize M&As more rigorously, ensuring the preservation of competition, even in cases where direct control may not be evident. Moreover, the Amendment Act introduces a framework for the settlement of competition cases, offering businesses an expedited avenue for dispute resolution while reducing litigation costs. The Act also includes modifications to the complaint filing deadline, the availability of expert witnesses, and the expense of CCI penalty appeals.

In conclusion, these amendments, while presenting challenges and complexities, aim to enhance competition regulation, protect the interests of stakeholders, and promote efficiency in the Indian market. They represent a significant step towards aligning competition law with contemporary business dynamics, ultimately benefiting both businesses and consumers.

This article has been authored by Pragati Rathod and Adiba Raza, students of ILS Law College Pune.


  1. The Competition (Amendment) Act, 2023

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