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Sony Corporation, a Japanese electronics company, has terminated its $10 billion merger with Zee Entertainment Enterprises Limited, an Indian media conglomerate. The decision comes after the companies failed to secure regulatory approval from the Indian government. The proposed merger was announced in 2020 and aimed to create a global entertainment giant with a combined value […]

Sony's $10B Merger with Zee Entertainment Terminated: What Went Wrong? #acquisitions #alternativepartnerships #antitrustregulator #CompetitionCommissionofIndia #crossborderdeals #Duediligence #dynamicmarketconditions #Emergingmarkets #investordisappointment #largescaleacquisitions #mergertermination #multinationalcorporations #regulatoryapproval #regulatoryframeworks #riskassessment #SonyCorporation #ZeeEntertainmentEnterprisesLimited

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International Competition Network (ICN)

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Google must pay $162 million as a penalty in an Indian antitrust case An Indian tribunal has upheld a $162 million fine imposed on Google by the country’s fair trade regulator for abusing its Android dominance to promote its payment service.Read more... https://qz.com/indias-nclat-asks-google-to-pay-android-antitrust-fine-1850281696

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સ્પર્ધા વિરોધી રીતસમો માટે ભારતમાં ગૂગલને $162 મિલિયનનો દંડ - #Google fined $162 million in India for anti-competitive practices

[kpalegal]

CCI’s Green Channel of Competition

In 2019, the Competition Commission of India (CCI) amended the Combination Regulations 2011[1] in order facilitate expedited process of approval for mergers and acquisitions. The ‘Green Channel’ is an automated and transparent system for gaining approval for certain type and combination of mergers and acquisition.

CCI is a government authority established in 2009 under the Competition Act, 2002 to ensure and sustain healthy competition. CCI has the authority to halt and regulate any market activity that may have adverse effect on competition. Therefore, certain combinations of mergers and acquisitions that may have an adverse effect on the market competition require prior approval from the authority. The green channel is an initiative to ease and speed-up the process of seeking this approval from the authority. As of August 2019, the CCI had cleared 666 combinations of mergers and acquisitions in the market.

Along with no possibility of any adverse effect on competition the CCI also notified new eligibility criteria for the combinations to apply through the green channel route, as following:

No horizontal overlaps exist [i.e. there is no production of identical/similar products/services];

No existing or potential vertical relationships [i.e. products/services should not belong to different stage or level of production]; and

No complementary business activities; exist between the combining or related parties.[2]

In simpler terms the parties/companies that are looking for approval should not have any overlap or connection in the relevant market.

Combinations falling under the above criteria can gain on spot approval as against a thirty-day waiting period for their corporate reconstruction through mergers and acquisitions. The party can file the Form 1 along with the prescribed declaration under Schedule IV to the authority.[3] The submission will be deemed approved on the day of filing upon authority’s acknowledgement of the notice in Form 1. In case of a merger, both parties must file the notice jointly whereas in the case of an acquisition, the acquirer must file the notice with the authority.

If the authority discovers at a later stage that combination did not fit the criteria for the green channel route, then the whole transaction and reconstruction will be void ab initio [null and void from the starting as if it never existed]. The parties may be held accountable for false representation and be heavily penalised under the Competition Act.

In 2020 on its one-year anniversary and to emphasise on the success of the system, the CCI made a statement that one out of every five combinations submitted under the green channel route is given approval. Around twenty-five combinations were notified under the system. The move by the authority was welcomed by many in the market. However, it should be noted that it has proven very difficult for the parties to fit the criteria of green channel route.

[1] The Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011; available at:

https://www.cci.gov.in/sites/default/files/regulation_pdf/Combination%20Regulations%202016%20-%20FINAL.pdf

[2] Schedule III of the Combination Regulations, 2011

[3] Regulation 5A of the Combination Regulation, 2011

ABOUT AUTHOR:

Akash Kashyap is an American trained and American qualified attorney practicing in New Delhi. He has a Juris Doctor from Brooklyn Law School, and is a member of the New York State Bar and Bar Council of Delhi in good standing. Akash Kashyap also has a M.Sc. in Management & Marketing from Lancaster University, and a B.Sc. degree in Applied Sciences from the University of Delhi.

Originally posted on www.kpalegal.com on 02 Sep. 2021

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