In the aftermath of globalization, India has endorsed certain radical measures that

would promote liberalization. In order to deal this, India has introduced the
concept of ‘free markets’ and where the Indian markets have to adapt itself from
the competition within as well as outside.

Currently, there are many players for every product in the market and in order to
survive their existence; the companies at times would resort to entering anti-
competitive practices that would disturb both the customers and other competitors
in the market. The Competition Act aims to prevent the same and to ensure that
there is the competition between suppliers as the same benefits the consumers.
Further, it also ensures the freedom of trade.

The Competition Commission Act, 2002 prohibits anti-competitive practices,

abuse of dominant position and also regulates combinations.

Companies tend to do anti-competitive practices by way of agreements,

combinations etc. Section 5 and 6 of the Act interalia, deals with the combinations
viz. mergers and acquisitions. From the plain reading of these provisions, it is
evident that Section 5 defines a combination, categorically specifies different ways
of mergers and acquisitions and also specifies certain thresholds for the same. If a
company either merges or acquires another company and satisfies the conditions
specified under Section 5, then it has to get the permission of CCI under Section 6
to merge or acquire that company.

Mergers and acquisitions are one of the anti-competitive practices because if two
dominant players in a market get merged then it would lead to a single-player
leading the market thereby creating a monopoly over the market. But the other side
of the coin is that at times companies get into a merger to survive the competition.
For example, idea and Vodafone got merged so as to survive Reliance Jio’s
competition.

The loophole in Section 5 is that it judges the strength of a company in terms of

numbers alone. A company’s strength also lies in its consumers i.e. if a company
has the highest number of consumers for a product then it is actually giving a
competition to the other players through its turnover doesn’t meet the threshold
specified under the Section. However, the Act neglects the same and considers
only the monetary soundness of a company.

These provisions took me to read SEBI takeover guidelines. These days every now
and then companies get into takeovers by acquiring shareholdings, for example,
zomato acquired uber eats by way of acquiring their shares. Moreover, such
transactions are very rampant in this new competitive business environment.
Therefore, the SEBI has enacted these guidelines to regulate the takeovers and
protect the interests of all relevant stakeholders.

From a plain reading of these provisions, I believe that my interest lies in due
diligence part rather than in the procedural part. The compliance part of the Act
was indeed more fascinating for me.

Since my knowledge in Competition law is very limited. I would give my best to

learn any part of it. In specific I would like to learn – compliance of mergers &
acquisitions and issues relating to abuse of dominant position.