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Beyond Competition: Unveiling Public Interest in India’s Merger Control Regime

The author is Aastha Malipatil, a fourth-year student at National Law School of India University, Bangalore.


Combinations (or mergers) are defined under Section 5 of the Competition Act, 2002 (“the Act”), and entail the acquisition of one or more enterprises by one or more persons, or the amalgamation or merger of such enterprises. The reasons they take place can range from increasing economies of scale to capturing market power and controlling prices. Due to this, combinations raise numerous concerns for different stakeholders. The aim of competition law is thus to ensure the maintenance of fair competition in the market. Hence, reasons for control include the necessity to prevent future abuse of market power and to ensure competitive prices and choices for consumers.

Under Sections 5 and 6, if combinations meet certain monetary thresholds, the parties are mandated to file a notice to the Competition Commission of India (“CCI”), which then analyses the merger and either approves it with or without modifications, or disapproves it. Section 20 lays down the process of inquiry that the CCI is supposed to undertake to ensure that the combination has no ‘Appreciable Adverse Effects on Competition’ (“AEEC”). While AEEC is not specifically defined, Section 20(4) lays down a list of exhaustive factors, all or any of which need to be taken into consideration while assessing AEEC of a particular merger.

This piece argues that the CCI has gone beyond this exhaustive list of factors to implicitly also consider public interest (“PI”) concerns, thus expanding the purview of review. While cases might seem minuscule at the moment, the over-broad framing of PI in the Indian legal framework gives rise to a risk of future uncertainty and unpredictability, and increases transaction costs in merger control.

In furtherance of this, I first establish how PI can be distinguished from AAEC. I secondly then analyse all orders chronologically, passed by the CCI where the combination was approved with modifications and PI factors played a role. On analysing these orders, I thirdly argue that such considerations go against a positivist reading of the Act and give rise to uncertainty in merger control, which was deliberately sought to be avoided by the legislature.

 Contours of PI and AAEC

The factors laid down in Section 20(4) concern market power, effective competition, etc., except one – which relates to a consideration of the nature and extent of innovation. The Act nowhere mentions PI as a ground for evaluating combinations.

In merger control, PI is generally understood in broad terms that move beyond competitive concerns embodied by AAEC. They translate to whether the merger will be detrimental in the long-term by being subjected to hostile takeovers, whether it leads to a concentration of wealth, unemployment or workmen-related concerns, national security concerns etc.[1] While competition assessments are generally undertaken in the larger interest of the market, as portrayed by the Preamble of The Act, PI concerns embody the larger set which includes a subset of competition concerns, portrayed by factors under AAEC.


Implicit Move from AAEC to PI: Broadening the Scope of Merger Control

Out of the twenty-nine orders passed by the CCI where it has approved combinations with modifications, seven of these had underlying public interest concerns.

In 2019, a notice was filed for acquisition of preference shares of OLA by Kia and Hyundai, with a subsequent coordinated operation towards e-mobility business. The only modification CCI asked for was to the effect that OLA would not discriminate against drivers who did not own Kia or Hyundai vehicles as a result of the collaboration. Since this had no direct impact on a competition assessment, it is unclear as to why the same was undertaken in the first place.

In another notice of an acquisition by Google LLC of certain shares of Bharati Airtel Ltd., a modification was made by providing an undertaking that there will be measures implemented to protect Bharati Airtel’s consumers’ data from destruction, loss, alteration, or access.

In 2022, a notice was filed for acquisition of Hindustan National Glass & Industries Limited by AGI Greenpac Ltd., where the former was undergoing CIRP. One of the reasons for approval was that due to CIRP, acquisition was in the best interests of stakeholders like customers, financial and operational creditors, workmen etc., and that a speedy approval was necessary since time was of essence.

Further, in a combination notice by Air India Ltd., Singapore Airlines Ltd., Tata Sons Pvt. Ltd., and Tata SIA Airlines Ltd., the CCI at length discussed the beneficial effects of an airline merger while granting approval. These included operational efficiencies, better scheduling, deployment of new routes, and options for consumers travelling from Tier-II and Tier-III cities.

Then, in an acquisition by ZF Friedrichshafen AG of WABCO Holdings Inc., where the combined entity proposed to manufacture an electronic braking system (“EBS”), the CCI stated that while EBS is not mandatory in India, it will soon be a policy preference by the government due to its commitment to safety of customers. Similarly, there have been modifications asked for enabling access of farmers to digital farming websites equitably as well as for consumers to not face extra charges when a local cable network has been acquired by Reliance’s subsidiaries.

It can be seen from all of these orders that combinations, apart from being subjected to an AAEC analysis, have been reviewed by an additional lens of PI. Where the CCI gets the public interest ground from is, however, left to the reader’s guess, since there is no statutory or textual basis for the same. This piece will now discuss why such analysis can be harmful in the long run.


Navigating the Departure from Merger Control Principles and its Accompanying Harms


AEEC concerns are assessed by competition authorities since they have the requisite technical expertise. The framework, however, becomes complicated once PI is introduced – one primary question that arises is who should be adjudicating such issues. The argument put forward is that since PI pertains to the public at large, it must be assessed by institutions that have public legitimacy and approval – i.e., political institutions.[2] The Act, however, does not account for such a dual review process, indicating that PI is not to be considered while assessing competition concerns.

Moreover, the definition of PI is dynamic and keeps changing in accordance with the circumstances prevailing in the country. This not only keeps the review process in constant uncertainty but might also be short-sighted, going against the principle of merger control, which is a long-term preventive process focused on future effects on competition and requires predictability. The inclusion of a PI analysis therefore increases transaction costs by giving rise to uncertainty in the content of the assessment procedure and raises debates concerning the correct adjudicatory body.

This is precisely what is sought to be avoided by the present Act by not including a PI criterion for merger control. Its predecessor, The Monopolies and Restrictive Trade Practices Act, 1969 (“MRTP Act”) had expressly specified PI as a factor to consider while assessing Restrictive Trade Practices (“RTPs”). Section 2(o) of the MRTP Act defined RTP as any practice which might have the effect of preventing, distorting or restricting competition in any manner. Thus, combinations are also included in the broad definition, due to their prospective impact on competition. Section 37 of the MRTP Act stated that if on inquiry, a restrictive trade practice was found to be prejudicial to PI, the commission could pass orders to discontinue the practice, declare the accompanying agreement void, etc.

Therefore, the present Act is a clear departure from the MRTP Act and includes an active legislative intent to not factor in PI considerations in merger control. PI also cannot be factored under s. 20(4)(n), because the sub-clauses are supposed to be read ejusdem generis. As seen above, PI and AAEC are conceptually different, with the latter being a subset of the same and not the other way around [which would be the interpretation attached if PI is included under clause (n)]. The same is also not a factor under The CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011. Under Section 29(3) of the Act, the CCI is empowered to invite any person who is affected by the merger to file written objections. While this can be considered as a way to factor in PI, the intention is only to respond to specific objections, if raised, by relevant stakeholders. Undertaking such an analysis independently, not confined by the questions raised by stakeholders, leads to conferring wide discretion in the hands of the CCI. The dynamic undefinable nature of PI also leads to problems of transparency, since the CCI has failed to draw a connection between PI and substantive competition concerns or give textual statutory backing for the same in its orders discussed above.

The CCI has, thus, ventured beyond the primary principle of literal interpretation of statutes, as held by the Apex Court in Lalita Kumari v. Government of Uttar Pradesh and Ors. While the orders might seem miniscule presently, the CCI has opened a can of worms with respect to merger control by including PI considerations – a situation that will only lead to further uncertainty and unpredictability.



Through an analysis of orders passed by the CCI wherein combinations have been approved with modifications, I have argued that PI concerns have been one of the factors underlying the CCI’s assessments. This is a clear departure from the text of the statute and the intention of the legislature. By blurring the lines between competition concerns and PI, the expansion of the purview of merger control risks sowing seeds of uncertainty in India's regulatory landscape.


 [1] Richard Whish (n 2) 867; Barry J. Rodger and Angus MacCulloch, Competition Law and Policy in the EU and UK (6th edn, Taylor & Francis 2022)

[2] David Reader, ‘Accommodating Public Interest Considerations in Domestic Merger Control: Empirical Insights’ (2016) UEA CCP 1

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