Competition Law

Competition law in India is a relatively young discipline — the Competition Act, 2002 only came into full force in 2009 — but the Competition Commission of India has since built a body of enforcement practice that businesses operating at scale cannot afford to ignore. Whether you are navigating a merger filing, responding to a CCI investigation, or trying to ensure your distribution contracts do not create regulatory exposure, the fundamentals matter.

The Competition Act and CCI

The Competition Act, 2002 replaced the old Monopolies and Restrictive Trade Practices Act — legislation that had become largely toothless by the time it was repealed. The 2002 Act introduced a modern, effects-based competition framework, modelled broadly on EC competition law but adapted for Indian market realities. The Competition Commission of India, constituted under the Act, is the primary regulator. Its statutory mandate is to prevent practices having an appreciable adverse effect on competition (AAEC) in India.

The Act rests on three main pillars. First, Section 5 and 6 govern combinations — mergers, acquisitions, and amalgamations above prescribed thresholds require CCI approval before implementation. Second, Section 3 prohibits anti-competitive agreements, covering both horizontal arrangements (cartels, bid rigging, price fixing) and vertical arrangements (exclusive dealing, resale price maintenance, refusal to deal). Third, Section 4 addresses abuse of dominance, prohibiting conduct by dominant enterprises that damages competition or exploits consumers.

The appellate structure runs from CCI to the National Company Law Appellate Tribunal (NCLAT) and then to the Supreme Court on questions of law. The NCLAT has seen a meaningful body of jurisprudence develop on combination orders and abuse findings, and Supreme Court decisions have clarified several procedural and substantive questions, including the standard for AAEC and the scope of the Director General's investigative powers.

Merger Control: CCI Combination Filings

A CCI filing is mandatory when a proposed combination meets the jurisdictional thresholds set out in Section 5 of the Act. The primary thresholds are based on combined assets and turnover — in India and globally — of the parties to the transaction. The 2023 amendments layered a deal value threshold on top of these: if the transaction value exceeds ₹2,000 crore and the target has substantial business operations in India (assessed by a proxy test on revenue, users, or gross merchandise value), a filing is mandatory regardless of asset or turnover size. This catches technology and platform acquisitions where the target may be pre-revenue or asset-light but commercially significant.

Form I versus Form II

Most combinations are filed on Form I — the short form — which is available where the transaction does not give rise to significant horizontal overlaps (typically below 15% combined market share) or vertical relationships. Form I filings are reviewed within 30 working days, and in practice most straightforward transactions are cleared within that window. Form II, the long form, is required where the parties have substantial horizontal overlaps or vertical links, and the review timeline is longer — up to 150 working days — as it involves a Phase II investigation with detailed market inquiries, third-party submissions, and potentially the negotiation of remedies.

Remedies in Phase II proceedings can be structural (divestiture of overlapping businesses) or behavioural (conduct commitments). The 2023 settlement and commitment framework has added a new dimension: parties can now offer commitments during Phase I or Phase II to address concerns without CCI issuing a cease-and-desist order, which provides more flexibility than a contested review but requires careful calibration of what is offered.

Gun-Jumping

Gun-jumping — implementing a combination, or taking steps that effectively transfer control, before CCI clearance — is a serious compliance risk. The CCI has fined parties for gun-jumping even in transactions that were ultimately approved on the merits. The 2023 amendments raised the stakes considerably: penalties for gun-jumping are now up to 1% of the combined assets or turnover of the parties, whichever is higher. In large transactions, this can be a material number. Parties and their advisers need to think carefully about what steps they can and cannot take between signing and closing, including information exchange, operational integration, and board representation.

Green Channel

The green channel route, introduced in 2019, allows automatic approval of combinations where the parties have no horizontal, vertical, or complementary overlaps in India whatsoever. A green channel filing is deemed approved on the day of filing, which is a significant advantage in time-sensitive deals. However, the conditions for green channel eligibility are strict, and misusing the route — filing as green channel when there are in fact overlaps — carries serious consequences including deemed invalidity of the deemed approval.

Anti-Competitive Agreements

Section 3 of the Competition Act prohibits agreements that cause or are likely to cause an appreciable adverse effect on competition in India. The Act draws a sharp distinction between horizontal and vertical agreements, and the legal treatment of each is different.

Horizontal Agreements

Horizontal agreements — between competitors at the same level of the production or distribution chain — that involve price fixing, output restriction, market allocation, bid rigging, or collusive tendering are subject to a presumption of AAEC. This means the CCI does not need to demonstrate actual harm to competition: once the agreement is established, the burden shifts to the parties to rebut the presumption. In practice, this is very difficult to do. Cartels and bid-rigging arrangements are treated as the most serious infringements under competition law, and the penalties reflect that — up to 10% of average turnover for three years, or three times the profit arising from the cartel, whichever is higher.

Vertical Agreements

Vertical agreements — between parties at different levels of the supply chain — are assessed under a rule of reason: the CCI must actually demonstrate AAEC, weighing pro-competitive benefits against competitive harm. Exclusive supply and distribution arrangements, resale price maintenance, tie-in arrangements, and refusal-to-deal clauses are all potentially caught by Section 3(4), but the analysis is contextual. Market share, the availability of alternatives, and the countervailing benefits of the arrangement all go into the assessment.

The Leniency Programme

For parties involved in a cartel, the leniency programme under the Act offers a meaningful incentive to come forward. The first applicant who makes a full, true, and vital disclosure can receive up to 100% reduction in penalty; subsequent applicants receive progressively lower reductions. The programme has generated a significant number of cartel disclosures and investigations over the past decade. If there is any possibility that your company or its employees have been party to a cartel arrangement, the leniency programme — and the strategic decisions around whether and when to apply — needs to be considered carefully and urgently.

Once a complaint or leniency application triggers an investigation, the CCI refers the matter to the Director General (DG) for investigation. The DG has broad powers — to call for documents, conduct dawn raids, record statements, and examine witnesses. After the DG files its investigation report, the CCI issues it to the parties, who have an opportunity to file objections and appear before the Commission before a final order is passed.

Abuse of Dominance

Section 4 of the Competition Act does not prohibit dominance — it prohibits the abuse of a dominant position. This is an important distinction: being the market leader, charging high prices, or having a large market share is not itself a violation. What Section 4 catches is conduct by a dominant enterprise that imposes unfair conditions on trading partners, excludes rivals without legitimate business justification, or exploits customers.

Establishing Dominance

The starting point in any Section 4 analysis is the definition of the relevant market — the product market (what goods or services are in the same market from a demand-substitutability perspective) and the geographic market (the area within which competition operates). Market definition is frequently the most contested aspect of a dominance case, because a narrower market definition makes it easier to establish dominance, and a broader one makes it harder. The CCI's market definition practice has evolved considerably, particularly in digital and platform markets where the relevant market question is genuinely complex.

Once the relevant market is defined, dominance is assessed by reference to market share, the size and resources of the enterprise relative to competitors, commercial advantages (including access to raw materials, technology, or distribution), countervailing buyer power, barriers to entry, and other factors listed in Section 19(4). Dominance in practice tends to be found where market share is substantial — though the Act does not set a numerical threshold — and entry barriers are high.

Abusive Conduct

The Act enumerates forms of abuse: imposing unfair or discriminatory prices or conditions (including predatory pricing — pricing below cost with a view to eliminating competition); limiting production, markets, or technical development to the detriment of consumers; creating barriers to entry or driving out existing competitors; making contracts conditional on acceptance of supplementary obligations unrelated to the subject matter (tying); and denying market access. In practice, the cases that generate the most CCI scrutiny involve predatory pricing in nascent markets, margin squeeze in vertically integrated industries, and refusal to deal or denial of access to essential facilities.

Sectors where dominance cases arise most frequently include digital platforms and e-commerce, pharmaceutical distribution, telecom infrastructure, media and broadcasting, and infrastructure-linked markets such as ports and airports. The increasing focus on digital markets — where network effects, data advantages, and switching costs can entrench dominant positions very quickly — has made this an area of active enforcement.

Competition Compliance Programmes

A well-designed competition compliance programme does two things: it reduces the likelihood that your business inadvertently crosses competition law lines, and it gives you a credible basis to demonstrate good faith if a complaint or investigation does arise. The CCI does not formally reduce penalties for having a compliance programme in the way some jurisdictions do, but the practical benefits of catching issues early — before they become investigations — are substantial.

A programme worth having typically covers the following ground. Market definition and competitive position: understanding where your business may be dominant and therefore subject to Section 4 scrutiny. Pricing reviews: ensuring that pricing policies — particularly in markets where you have a strong position — are commercially defensible and not structured in ways that resemble predatory or discriminatory pricing. Distribution agreement audits: reviewing standard terms and conditions, dealer agreements, and exclusive arrangements against the Section 3(4) framework. Bid and tender processes: ensuring your tendering practices are isolated from competitor contact and that relevant staff understand what communications are permissible. Dawn raid protocols: having a clear, documented procedure for what happens if the DG turns up at your door — who is contacted, what rights exist, how documents are managed.

The CCI's growing focus on digital markets and platform businesses has made compliance more urgent for technology companies operating in India. Platforms that set prices across their marketplace, that operate both as a marketplace and as a direct seller, or that impose MFN clauses on merchants need to consider the competition law dimensions of those practices carefully. The DG has increasingly used its powers to examine algorithmic pricing, data-sharing arrangements, and platform governance practices.

Competition Law in Digital Markets

The CCI has become one of the more active competition authorities globally on digital market enforcement. Its investigations into major technology platforms — covering search, e-commerce, ride-hailing, and app distribution — have produced detailed orders that set out how competition law principles apply to multi-sided platform businesses. These orders are worth reading carefully if your business has any platform characteristics, because they show how the CCI is thinking about market definition, dominance, and abusive conduct in digital contexts.

Multi-Sided Platforms and Market Definition

Defining the relevant market for a multi-sided platform is genuinely difficult. A platform that connects buyers and sellers, for instance, may operate in a single two-sided market or in two separate markets depending on the degree of interdependence between the sides. The CCI has taken different approaches in different cases, and the question of how to define markets — and assess dominance — in platform contexts remains one of the more technically contested areas of Indian competition law.

Data as a barrier to entry has emerged as a significant concern: where a dominant platform has accumulated proprietary datasets that rivals cannot replicate, access to that data may itself be a competition issue. Self-preferencing — where a platform that also operates as a seller on its own marketplace preferences its own products in search results or algorithms — has drawn specific regulatory scrutiny, as have MFN (most-favoured nation) clauses that prevent merchants from offering lower prices on competing platforms.

The Digital Competition Bill

The Digital Competition Bill, which was subject to a consultation process in 2024, proposes a significant shift in approach: rather than a reactive, investigation-led model, the Bill proposes ex ante regulation of large digital platforms designated as Systematically Significant Digital Enterprises (SSDEs). SSDEs would be subject to pre-specified obligations — including prohibitions on self-preferencing, data bundling, and certain MFN clauses — without the need for the CCI to prove AAEC in each instance. If enacted in something like its current form, the Bill would represent a fundamental change in the compliance burden for major platform businesses operating in India, and would require those businesses to redesign commercial practices that are currently permissible under the existing effects-based framework.

How We Work on Competition Law Matters

Competition law engagements at Tejas Advisors span both transactional and contentious work. On the transactional side, the work is primarily merger control — pre-filing assessment of whether a transaction requires CCI approval, preparation and filing of combination notices, management of the review process, and advice on gun-jumping constraints during the pre-closing period. On the contentious side, we advise parties under investigation by the DG or the CCI, including in cartel investigations, abuse of dominance proceedings, and responses to information requests.

• Pre-transaction competition assessment — threshold analysis, green channel eligibility, deal value threshold review
• CCI combination filing preparation and management — Form I and Form II
• Gun-jumping compliance advice — what is permissible between signing and CCI clearance
• Representation in DG investigations — managing dawn raids, document requests, and statement recordings
• Leniency application advice — strategic assessment of timing, scope, and cooperation
• Section 3 agreement reviews — distribution contracts, exclusive dealing, pricing policies
• Section 4 dominance assessments — market definition, competitive position analysis, and conduct review
• Competition compliance programme design and implementation
• Digital market competition advice — platform governance, MFN clauses, algorithmic pricing, Digital Competition Bill compliance planning
• NCLAT appeals against CCI orders

Every competition law matter at Tejas Advisors is handled with direct founder involvement. Competition law is a discipline where the quality of early advice shapes the trajectory of the entire matter — whether that is the structuring of a merger filing, the decision about whether to apply for leniency, or the design of a compliance programme before a regulator comes knocking. We engage at the level of technical and strategic depth that these situations require.