Regulation of combinations: Is the leash too tight?

By siliconindia   |   Saturday, 23 February 2008, 17:03 IST   |    1 Comments
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If the changes proposed to the competition law comes to the effect, it may cripple the growth of the corporate deals in India. The Competition Commission of India (CCI), the apex body vested with the responsibility of regulating competition in the country, has recently come out with a draft of the Competition Commission (combinations) Regulations, reported The Economic Times. The regulations, which seek to govern "combinations" (a term under competition law, which covers actions like an acquisition, merger or amalgamation) provide much-awaited clarity on several issues pertaining to such transactions, but regrettably create new areas of uncertainty. The Competition Act, 2002, primarily governs the competition law in India. The act attempts to shift the archaic phrase "curbing monopolies" to "curb practices having adverse effects on competition." The law also promotes and sustains competition. While a majority of the procedural provisions of the Act with respect to setting up CCI have entered into force, the substantive provisions of the Act dealing with 'anti competitive agreements', 'abuse of dominant position' and 'regulation of combinations' have not yet entered into full force and effect. Soon after its enactment, on the grounds of being constitutionally invalid, certain amendments were proposed to the Act, resulting in the passing of the Competition (Amendment) Act, 2007, (Amendment Act). The Amendment Act, which received presidential assent towards the end of 2007, will come into effect after it has been notified. India's competition laws are embodied in acts, amendments to acts and regulations, all of which are mere drafts that are yet to attain the force of law. Among many things the act provides that no person or enterprise shall enter into a combination, which causes or is likely to cause an appreciable adverse effect on competition in India.