In today’s deal-driven business environment, mergers and acquisitions are more than financial strategies — they’re tools that shape industries. But unchecked consolidation can squeeze out competition and hurt consumers. That’s where merger control comes in. It allows regulators to keep a check on whether a business combination will unfairly distort the market. India’s merger control journey has evolved steadily since the Competition Act, 2002 came into force. With recent changes introduced through the “2023 Amendment Act and the 2024 Combination Regulations”, India is not only catching up with global best practices but also carving out its own approach. These changes — like the introduction of a “deal value threshold (DVT)” and streamlined timelines — show that Indian competition law is becoming more sophisticated, and perhaps even more pragmatic.
This article unpacks India’s current framework, dives into key domestic case law, and compares our regulatory playbook with those of major jurisdictions like the EU, US, and UK. Alongside that, it also looks at what this means for lawyers, dealmakers, and policy watchers who need to balance legal compliance with commercial speed.
Merger control mechanisms serve to ensure that business combinations do not harm consumer welfare or market competitiveness. With growing consolidation across sectors—technology, pharmaceuticals, finance—jurisdictions worldwide have developed regulatory frameworks for merger scrutiny. In India, the “Competition Commission of India (CCI)” is empowered to review, block, or approve mergers under “Sections 5 and 6 of the Competition Act, 2002”.
India’s approach is increasingly aligned with global best practices, especially following the 2023 Amendment Act and updated 2024 Regulations. At the same time, merger control remains a complex area involving jurisdictional thresholds, definitions of control, timelines, and exemptions. This article seeks to analyze these frameworks and compare India’s evolution with that of other advanced jurisdictions.
- Objectives of Merger Control
Merger control serves multiple economic and legal objectives. Firstly, it seeks to prevent undue market concentration that may enable entities to abuse their dominance. Secondly, it aims to safeguard consumer welfare by preventing combinations that might lead to inflated prices or reduced quality. Thirdly, by maintaining competitive pressure, it facilitates innovation and dynamic efficiency in markets. Transparency in M&A activity through disclosure and scrutiny mechanisms is another crucial goal. Finally, as cross-border deals become more frequent, harmonization with international regimes aids smoother implementation and compliance.
- Indian Legal Framework on Merger Control
India’s merger control regime is governed by the “Competition Act, 2002”. “Sections 5 and 6 of the Act” deal with combinations and their regulation. “Section 5 defines combinations”, while “Section 6 prohibits combinations that cause or are likely to cause an appreciable adverse effect on competition (AAEC) in India”. The Competition (Amendment) Act, 2023 brought sweeping changes, including the introduction of a DVT and reduced timelines for review.
The CCI has also notified the Combinations Regulations, 2024 which streamline procedural compliance. These regulations provide for two types of filings: Form I for summary filings and Form II for detailed scrutiny. The DVT introduced by the 2023 amendment requires mandatory notification for transactions exceeding INR 2,000 crore in deal value where the target has substantial business operations in India, irrespective of asset or turnover thresholds.
Control is defined expansively to include not only shareholding or voting rights but also the ability to influence management or policy decisions. CCI applies a functional test, examining factors such as board rights, affirmative vetoes, and shareholder agreements to determine whether a party has acquired control. The review timeline has been fixed at 150 calendar days with provisions for extensions, and deemed approval is granted if no response is received within that time.
Exemptions are available for certain categories such as intra-group mergers, minority acquisitions for investment purposes, and transactions approved under IBC. The interplay between merger control and other legal regimes like SEBI’s SAST Regulations and FDI rules adds further complexity, often requiring multi-layered legal structuring.
- Case Law and Sectoral Trends in India
Indian jurisprudence on merger control has grown significantly since the CCI began reviewing combinations in 2011. In the Walmart–Flipkart transaction (2018), the CCI approved the deal while addressing concerns about buyer power in the e-commerce space. The Sun Pharma–Ranbaxy merger (2015) marked a major enforcement case where the CCI imposed structural remedies including divestitures to address overlaps in product markets.
The Vodafone–Idea merger (2018) led to the creation of the largest telecom player in India. The CCI reviewed not only market shares but also the likelihood of price coordination and spectrum hoarding. In the recent Zee–Sony deal (2021–2024), the regulator expressed concerns about media concentration and content control, underscoring that even vertical integration in creative industries may attract scrutiny.
A landmark deal in the financial sector was the HDFC–HDFC Bank merger (2023), where the CCI approved the transaction in a timely manner. This highlighted the regulator’s growing comfort with large domestic consolidations, especially in well-regulated sectors like banking. The Byju’s–Aakash acquisition (2021) in the edtech space demonstrated CCI’s evolving approach toward digital markets.
Control issues are not limited to conventional mergers. The Adani–NDTV acquisition (2022) shows how indirect acquisition of control through financial instruments can attract regulatory attention under SEBI’s Takeover Code and potentially under merger control law as well.
- Comparative Analysis: US, EU, and UK
The United States adopts a decentralized but robust merger review mechanism, split between the Federal Trade Commission (FTC) and the Department of Justice (DOJ). The Hart-Scott-Rodino Act lays down pre-merger notification requirements. The test applied is whether a merger may substantially lessen competition. The agencies often use the Herfindahl-Hirschman Index (HHI) to assess market concentration. A prominent case is Microsoft–Activision, where the DOJ flagged vertical foreclosure concerns.
The European Union, through the Directorate-General for Competition (DG COMP), enforces merger control under the EU Merger Regulation. It applies the significant impediment to effective competition (SIEC) test. The Meta–Giphy acquisition, which led to an order for divestment, is a recent example of aggressive enforcement, particularly where data and digital advertising are concerned.
The United Kingdom, post-Brexit, now handles merger control independently through the Competition and Markets Authority (CMA). The CMA is known for its rigorous scrutiny, including in the Veolia–Suez deal (2021), where divestitures were required to preserve competition in the waste management sector.
India’s regime aligns more closely with the EU model, especially in its focus on ex-ante review and economic analysis. However, India maintains certain unique features, such as the public interest clause and its tiered exemption structure. Additionally, India’s introduction of the DVT resembles recent global trends in capturing killer acquisitions and nascent competition threats.
- Strategic Implications for Dealmakers
Merger control regulations have direct consequences on transaction structuring. The choice between Form I and Form II filings can impact timeline and scrutiny. Dealmakers must conduct a control analysis early, especially where shareholder agreements confer extensive rights. Acquisitions involving convertible instruments, board nomination rights, or sectoral caps under FDI may create latent control triggers.
The timeline for review must be built into the closing conditions of the transaction. Gun-jumping risks—such as premature integration—can lead to heavy penalties. Coordinating multi-jurisdiction filings is another challenge, requiring consistent disclosures and synchronized timelines.
Understanding the strategic exemptions under the Combinations Regulations is vital. For instance, intra-group restructurings may be exempt, but only if control remains unchanged. Similarly, under IBC, certain acquisitions are granted expedited approvals. Legal teams must align merger control compliance with SEBI, RBI, and sectoral regulators to avoid regulatory delays.
- Key Challenges and the Road Ahead
Despite significant reforms, India’s merger control framework faces challenges. The definition of control continues to be judged on a case-by-case basis. SEBI has proposed a bright-line test for control in the context of SAST Regulations, but the CCI has yet to adopt similar thresholds. There is also an urgent need to enhance CCI’s capacity to handle complex, multi-party transactions, particularly in digital markets.
Digital mergers raise new concerns. Many technology deals involve zero-revenue targets but confer significant data control or platform advantage. The DVT is a step forward in addressing such issues, but practical implementation and clarity on what constitutes “substantial business operations” are still evolving.
Cross-regulatory coordination remains an issue. Deals often require parallel approval from CCI, SEBI, RBI, FIPB (for FDI), and sectoral regulators. Creating a common transaction passport or unified filing mechanism could significantly reduce transaction costs.
- VII. Conclusion
Merger control in India has come a long way — from being a reactive filter to becoming a central checkpoint in deal-making. With the CCI now armed with sharper tools like the deal value threshold and clearer timelines, the regulatory system is starting to reflect both confidence and clarity.
That said, challenges still persist. The test of ‘control’ isn’t always easy to apply, especially in nuanced cases involving digital markets or indirect acquisitions. The CCI must also continue to improve its internal capacity to review increasingly complex and cross-border deals without slowing things down.
For lawyers and corporate strategists, this means two things: First, understanding that merger control is no longer optional. Second, it’s not just about ticking compliance boxes — it’s about seeing where regulatory expectations and commercial design intersect. That’s where real value lies.
Hopefully, this piece offers a solid guide — not just on what the law says, but on how to think through a transaction from a competition law lens. As India’s corporate landscape matures, so must our readiness to deal with it, both legally and strategically.
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