This presentation by India was made during the break-out session “Competitive Assessment of Mergers” held at the 18th meeting of the OECD Global Forum on Competition on 6 December 2019. More papers and presentations on the topic can be found at oe.cd/mcdym.

1. MERGER CONTROL IN DYNAMIC MARKETS
INDIA PERSPECTIVE
Sanjay Pandey
Director (Law)
Competition Commission of India

2. LEGISLATIVE FRAMEWORK
• Competition Act, 2002
– ex ante regulation of combinations
– No one shall enter into combinations causing appreciable
adverse effect on competition
– Waiting period: 30 days for prima facie assessment and 210 days
for cases requiring full-fledged investigation
– Assessment factors in Section 20(4)

3. • market share
• competition through imports
• Entry barriers
• level of concentration
• countervailing power
• Potential increase in prices or
profit margins
• Availability of substitutes
• removal of a vigorous and
effective competitor
• extent of vertical integration
ASSESSMENT FACTORS
• failing business
• extent of innovation
• relative advantage, by way
of the contribution to the
economic development, by
any combination having or
likely to have appreciable
adverse effect on
competition; and
• whether the benefits of the
combination outweigh the
adverse impact of the
combination, if any.

4. • Parameters to identify dynamic nature of markets
– level of innovation in the market
– existence of network effects
– rate of evolution of the product in its lifecycle
• Examples
– Information Technology, Telecommunications, e-
commerce, platform markets, Pharmaceuticals, agriculture
technology
COMPETITION ASSESSMENT

5. • Assessment Framework
– Traditional tools still applicable with caution
– concentration analysis, entry and exit, innovation
• Challenges
– possible entry firms and products in future
– uncertainty and opacity of short-term developments
– Timeframe: no per se ruled but prediction beyond 2-5 years ?!!!!!
ASSESSMENT FRAMEWORK & CHALLENGES

6. • market share estimates based on:
– overall quantum of spectrum
– total number of subscribers
– net subscriber additions
– gross revenue
– gross revenue adjusted for revenue of the new entrant
• Significance of entries of maverick nature – Jio
• Sales revenue of entrant was nil. Market share based on expected
revenue was taken into consideration.
• Ease of switching – MNP, dual sim and zero switching cost
CASE EXAMPLE – TELECOM
(IDEA – VODAFONE MERGER)
Application of
traditional tool with
caution

7. EFFICIENCY CLAIMS
• Determining merger specificity - a challenge
• Complex market evolution
• Recognising dynamic / innovation efficiencies - nuanced
trade-off between better investment in technology and higher
costs in short-run

8. • Reliance Group - broadcasting (i.e. whole supply of TV channels) and
licensing of TV content
• Targets - aggregation and distribution of television channels through
cable as well as wired broadband internet services
• Market evolution towards a bundled service of Wired-BIS, direct-to-
home (DTH) / Cable TV, telephony and / or mobile connection
• Modification – continue to serve consumers of unbundled services
CASE EXAMPLE – MEDIA & ENTERTAINMENT
(RELIANCE – DEN & HATHWAY)

9. The behavioural remedies on innovation markets were:
• Development of the new traits (both Genetically Modified (GM)
as well as non-GM)
• Indian agro-climatic data owned and used by the parties for its
digital applications commercialized in India;
• Commercialized digital farming platform(s) for supplying/selling
agricultural inputs to agricultural producers in India; and digital
farming applications commercialized in India.
REMEDIES (BAYER-MONSANTO)

10. Thank You