Challenging a merger filing before the CCI during Phase I review stage

With more than 340 merger filings before the Competition Commission of India (CCI), so far we have not seen any opposition of the merger/ combination transaction by any third party, challenging the merger on grounds of appreciable adverse effect on competition (AAEC) in India. 

However, many transactional lawyers are now witnessing a trend recently where third parties are looking to challenge or block the transaction and are now willing to try CCI as one more medium for blocking the deal. Often, there are parties, who wants to block a merger but are not privy to information filed by the parties to the combination transaction and are not sure what could be their best argument, which could persuade the CCI to look or delve into the matter more deeply.

It may be noted that during the phase I review, Combination Regulations does not provide for a provision, where an aggrieved third party can approach the CCI and challenge the combination. 

Under the Combination Regulations, the onus is on CCI to ask for any additional information from any other enterprise, if it deems necessary for review of AAEC due to the combination transaction.

Here are some ideas of these genuine parties, who propose of block the transaction on grounds of AAEC:

First, file a right to information (RTI) application to the CCI for challenging and obtaining the materials and more information about the transaction of which the combination filing have been made to the CCI. While filing RTI application, RTI Act, 2005 provisions are required to be taken into considered.

Second, file a preliminary objection before the CCI asking to stop the combination transaction to be stopped as it may have AAEC and may impact your business. The basic information on the combination may be obtained from the 500 words summary submitted by the parties of the combination transaction. While filing the preliminary objection, the parties may also like to obtain the combination filings/ notification submitted with the CCI.

CCI may on both cases say ‘no’ and may also refuse to share any information with the challenging applicant. In that event, the challenging applicant may approach the High Court in a writ petition case and try to obtain the material / documents submitted by the parties to the transaction and try to block the combination transaction or delay the transaction.

Another situation to challenge the combination transaction is when the matter goes to Phase II i.e., when the CCI asks for public comments, while analysing the transaction and its AAEC.