The Competition Act, 2002

20. Inquiry into combination by Commission.-

1.   The Commission may, upon its own knowledge or information relating to acquisition referred to in clause (a) of section 5 or acquiring of control referred to in clause (b) of section 5 or merger or amalgamat on referred to in clause (c) of that section, inquire into whether such a combination has caused or is likely to cause an appreciable adverse effect on competition in India: Provided that the Commission shall not initiate any inquiry under this sub-section after the expiry of one year from the date on which such combination has taken effect.

2.   The Commission shall, on receipt of a notice under sub-section (2) of section 6 or upon receipt of a reference under sub-section (1) of section 21, inquire whether a combination referred to in that notice or reference has caused or is likely to cause an appreciable adverse effect on competition in India.

3.   Notwithstanding anything contained in section 5, the Central Government shall, on the expiry of a period of two years from the date of commencement of this Act and thereafter every two years, in consultation with the Commission, by notification, enhance or reduce, on the basis of the wholesale price index or fluctuations in exchange rate of rupee or foreign currencies, the value of assets or the value of turnover, for the purposes of that section.

4.   For the purposes of determining whether a combination would have the effect of or is likely to have an appreciable adverse effect on competition in the relevant market, the Commission shall have due regard to all or any of the following factors, name y:-

a.   actual and potential level of competition through imports in the market;

b.   extent of barriers to entry into the market;

c.   level of combination in the market;

d.   degree of countervailing power in the market;

e.   likelihood that the combination would result in the parties to the combination being able to significantly and sustainably increase prices or profit margins;

f.   extent of effective competition likely to sustain in a market;

g.   extent to which substitutes are available or are likely to be available in the market;

h.   market share, in the relevant market, of the persons or enterprise in a combination, individually and as a combination;

i.   likelihood that the combination would result in the removal of a vigorous and effective competitor or competitors in the market;

j.   nature and extent of vertical integration in the market;

k.   possibility of a failing business;

l.   nature and extent of innovation;

m.   relative advantage, by way of the contribution to the economic development, by any combination having or likely to have appreciable adverse effect on competition;

n.   whether the benefits of the combination outweigh the adverse impact of the combination, if any.

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