Competition Amendment Act 2023: What Changed in India's Antitrust and Merger Control Framework

The Competition (Amendment) Act, 2023, signed into law on April 11, 2023, represents the most significant reform of India's competition law framework since the Competition Act, 2002, came into force. The amendment overhauled merger control thresholds, introduced a deal value threshold, created a framework for settlements and commitments, strengthened the leniency programme, and addressed gun-jumping violations more forcefully. For businesses operating in India, particularly those involved in mergers, acquisitions, or practices that may affect competition, the 2023 Amendment has materially changed the legal landscape.

The New Deal Value Threshold for Mergers

The most significant change in the 2023 Amendment is the introduction of a deal value threshold for merger control filings. Under the original Competition Act, notifications to the Competition Commission of India (CCI) were triggered based on the assets and turnover of the parties. This meant that transactions involving high-value digital businesses with significant market power but limited physical assets often escaped scrutiny. The Amendment introduces an additional threshold: transactions where the deal value exceeds 2,000 crore rupees and where the target has substantial business operations in India will require CCI approval, regardless of whether the asset and turnover thresholds are met. This is directly aimed at technology sector acquisitions.

Reduced Time Limits for Merger Reviews

The 2023 Amendment reduces the overall time limit for the CCI to review a merger from 210 days to 150 days. The initial review period has been reduced, and the second phase period has been correspondingly adjusted. This change provides greater predictability to transacting parties and reduces the regulatory drag on deal timelines. However, the clock can be stopped if the CCI requests additional information, so the practical timeline depends on how responsive parties are to information requests and how complex the competitive issues are. Parties to significant transactions should build CCI review timelines into their deal planning from the outset.

Settlements and Commitments

The 2023 Amendment introduces, for the first time in India's competition law, a formal framework for settlements and commitments in cases of anti-competitive agreements and abuse of dominant position. Under the settlement mechanism, a party under investigation can approach the CCI and offer to settle the case by paying a settlement amount. The CCI may accept or reject the settlement offer. The commitment mechanism allows a party to address competition concerns proactively by offering behavioural or structural commitments, which the CCI can accept to close the investigation. These tools are expected to significantly reduce the length of enforcement proceedings and give businesses a predictable route to resolving competition concerns without waiting for a full adjudication.

Strengthened Leniency Programme

The leniency programme, which allows cartel members to disclose cartel conduct and receive reduced penalties in exchange for cooperation, has been strengthened under the 2023 Amendment. The Amendment introduces a leniency-plus mechanism, which allows a leniency applicant in one investigation to receive additional reductions in penalty if they disclose information about a separate, previously unknown cartel. This mirrors leniency-plus frameworks in other jurisdictions and is designed to destabilise cartel secrecy by creating incentives for members to be the first to bring additional wrongdoing to the CCI's attention.

Gun-Jumping and Penalty Reforms

Gun-jumping, meaning implementing a notifiable transaction before receiving CCI approval, is treated more seriously under the 2023 Amendment. The CCI now has express authority to levy penalties for gun-jumping, with penalties set at up to one percent of the total turnover or assets, whichever is higher. The Amendment also rationalises the general penalty framework and clarifies that penalties for cartel conduct can be calculated based on global turnover for multinational enterprises in certain circumstances. This brings India's approach closer to international enforcement standards and significantly raises the stakes for non-compliance.

Practical Takeaways

Businesses contemplating mergers or acquisitions in India should reassess their deal screening process to factor in the new deal value threshold. Any transaction involving a digital or technology business where the deal value exceeds 2,000 crore rupees must be examined for CCI filing requirements, regardless of the target's physical assets. Parties involved in ongoing CCI investigations should consider whether the new settlement or commitment mechanisms offer a faster and more predictable route to resolution than contested proceedings. Companies in sectors prone to coordination risks should review their competition compliance programmes in light of the enhanced leniency-plus mechanism. The Competition (Amendment) Act, 2023 has materially strengthened and modernised India's competition law framework, and staying ahead of these changes through proactive compliance and careful deal structuring is not optional but essential.