The Competition Commission of India (“CCI”) on March 31, 2022, through the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Amendment Regulations, 2022 (“Combination Regulations Amendment”), substituted Form II for notification of combinations under Section 6(2) of the Competition Act, 2002.

Form II is filed before the CCI in case of combinations which may show inherent concerns for competition in the market, primarily due to the market position held by the parties to the transaction. More specifically, Form II may be filed if the parties are involved in the business of substitutable goods and services and hold a cumulative market share of more than 15% (fifteen percent) horizontally and 25% (twenty-five percent) vertically.

Also known as the long form for notification, the CCI noted that the revision to the long form has been carried out to strike a balance between facilitation of parties as well as enforcement by the CCI while creating a culture of compliance in the Indian markets.

Some of the changes been made to the Form II includes:

1. introduction of the CR4 Index along with the previously included HHI (Herfindahl – Hirschman Index) for assessment of the relevant market, pre and post the transaction. The CR4 Index is used to assess the concentration ration for four top firms in the relevant market;
2. information related to complementary nature of goods and services offered by the parties, which was assessed only in Form I will now be captured in Form II also;
3. Form II has been made more structured so that it collects diverse information in relation to horizontal/ vertical overlaps between the parties and reduces the need for CCI to seek clarifications in future and prevents oversharing of information by the parties to the transaction being reported;
4. the market focused information including size of the market, sales in value and volume along with the market share of the parties as well as competitors has now been expanded to include such information for the last 5 (five) years; and
5. the details of the market sought have now been expanded, ensuring a more holistic competition assessment, to include information such as enterprises which may have entered/ left the relevant market, entry/ exit by competitors across geographical areas of the market and the likelihood of enter in the relevant market in the upcoming years.

Argus Comment:

This is a welcome move as the details sought from the parties to a transaction have now been standardised and there will be a reduced repetition of queries seeking information. Moreover, this move shall reduce the amount of unnecessary information collected through Form II for assessment of combinations, thereby making assessment of combinations a smoother process.

Please find a copy of the Combinations Regulations Amendment and the amended form, here.

This update has been contributed by Vinod Joseph (Partner) and Aryan Mohindroo (Associate).

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