Delving into Regulation of Combinations: Brief Analysis of the Amazon-Future Row


The anti-trust legislation in India is enumerated in the Competition Act, 2002. Contrary to its predecessor, the Monopolistic and Restrictive Trade Practices Act, the Competition Act 2002 intends to promote and sustain competition in India while protecting the interests of consumers and instilling freedom of trade as a norm for the economic development of the country. The remarkable difference between the approaches as instilled in the two legislations is that the former intended to prohibit transactions resulting in the concentration of economic power by prohibiting restrictive and monopolistic practices, whereas the current legislation intends to positively influence and water down the competition in India while keeping a safe check on abuse of power by established market players.

The Preamble of the Act provides for the constitution of an authority that shall act as the watchdog for the regulation of anti-trust transactions. Through the powers vested in the Central Government in pursuance of Section 7 of the Act, an authority in the name of the Competition Commission of India has been constituted for regulating transactions adversely impacting competition in India.[1] Recently, the financial markets witnessed headlines that highlighted CCI’s approval of the acquisition of Air Asia by Air India, resulting in the former becoming a wholly owned subsidiary of the latter.[2] The traces of the aforesaid transaction are derived from the provisions of Section 6 read with Section 5 of the Act, which reserves approval of ‘any combination’ by the authority before its execution. Through the course of this article, the author intends to outline the law relating to the formation of combinations and regulation thereof in light of the Competition Act, 2002.

Regulation of Combinations under Section 6

Through the course of Section 6[3] prohibits combinations, particularly comprising a merger or an acquisition, if they cause an appreciable adverse effect on competition in India(AAECI). However, in terms of Section 6(2)[4], the law mandates the serving of a notice to CCI within seven days from the date of execution of the acquisition agreement, or the date of the board resolution which initiated the concerned amalgamation or merger transaction, if it satisfies the definition of ‘combination’. However, whether a particular transaction falls within the ambit of the definition of a ‘combination’ has been duly explained under Section 5 of the Act[5].

Section 5 of the Act[6] subjects the following transactions to the approval of CCI, which are mentioned as hereunder:

  1. Acquisition of another enterprise that qualifies as a combination

It takes into account the acquisition of any entity, referred to as an ‘enterprise’, which, after the proposed transaction, collectively owns assets of value exceeding one thousand crores or turnover more than rupees three thousand crores. Furthermore, the alternative criteria enumerated in this regard provide that if such an acquiring enterprise, in collaboration with the acquired enterprise, holds assets worth more than USD 500 million or a turnover worth more than USD 1 billion, collectively in India or outside India, it must obtain CCI approval by Section 6(2)[7].

Further, the above-mentioned clause of Section 5 sheds light on another criterion for a ‘group’ of enterprises. The explanation appended to the Section enumerates what constitutes a ‘group’ under the act as an alliance comprising of two or more entities that are in a position to exercise a minimum of 26% of voting rights in the acquired entity, or appoint more than half of the directors on the board of the acquired entity, or control the management or affairs of the acquired enterprise.[8]

  1. Acquisition of an identical, or similar line of business that qualifies as a combination

Reiterating the criteria specified in clause (a) of the section, the second clause extends a distinctive provision specifically for the acquisition of entities engaged in a similar or identical enterprise engaged in the production, distribution, or trading of a similar, or identical product or service. The quantitative figures enumerated in clause (b) overlap with those indicated in clause (a).[9]

  1. Amalgamation or Merger which qualifies as a combination

Reiterating the figures enumerated in clauses (a) and (b), clause (c) specifies transactions involving the amalgamation or merger of two entities, which after the proposed merger or amalgamation must adhere to the aforesaid criteria, individually or through the group entities, to qualify as a combination within the meaning of this section.[10]

The Amazon-Future Group Row: CCI revokes sanctions granted to a Combination

As highlighted above, in terms of Section 6 of the Act, CCI has been vested with the authority to sanction combinations that satisfy the requirements of Section 5. Through an analysis of the case of Amazon & Future group[11], the practical application of the aforesaid sections can be thoroughly understood.

Background of the Case: Through the course of a deal sanctioned in 2019, Amazon acquired a stake worth 1430 Crores, increasing their holding in Future Coupons Private Limited (FCPL) to 49%. In addition to the stake acquired through preferential allotment, Amazon was empowered to intervene and provide prior consent in respect of the alienation of FRL’s assets. Additionally, the concerned Shareholders’ agreement prohibited the alienation of the retail assets of the FRL group to certain ‘restricted persons’, including Reliance Industries. Therefore, Amazon challenged the transfer of certain retail assets to Reliance group by arbitral proceedings, which were duly ordered for enforcement by the Hon’ble Delhi High Court.

Following the aforesaid events, the Future Group filed an appeal against the order of CCI sanctioning the investment deal alleging that the disclosures as filed by Amazon directly contradicted the disclosures filed by them in arbitral proceedings. Therefore, Amazon failed to disclose the ‘control’ of other companies vested in it through the aforesaid transaction, resulting in CCI revoking its authorization to the aforesaid transaction. The ‘control’ vested through a Shareholders’ agreement was within the purview of Regulations 9(4) and 9(5) of the CCI (Procedure regarding the transaction of Business relating to Combinations) Regulations, 2011 (Combinations Regulation)), and furnishing false/incorrect information and concealing/ suppressing material facts amounted to a contravention of the Act. Therefore, the Commission scrapped the transaction, and the Appellate Tribunal further affirmed the order of the Commission.

Analysis of CCI’s Order: Through its order, CCI imposed a penalty of INR 200 crores for non-furnishing of information in respect of the concerned combination.[12] Further, the Commission imposed an additional penalty of INR 1 crore for omitting the submission of material information[13] and an additional one crore for suppressing and misrepresenting the objective behind the concerned transaction as filed in the disclosures[14].

Interestingly, the respondents had duly disclosed the presence of ‘control’ vested through the shareholding agreement. However, the commission rejected the validity of such disclosure on account of the manner employed for disclosing such information. Therefore, the question arises where the act and regulations are silent in respect of the manner of the disclosure; can the respondent be said to have contravened the provisions of the Competition Act 2002?

Further, the commission questioned the objective disclosed in respect of the concerned transaction. It shall be necessary to highlight that Form-1 employed for disclosure of the combinations doesn’t specifically require the disclosure of the objective. In light of the same, can the specification that such a transaction is for ‘strengthening Amazon’s return on investment & portfolio’ be considered as misrepresenting the objective?

The Appellate Tribunal failed to examine the aforesaid question and ruled against the Amazon group, thereby validating the order of CCI revoking sanctions in respect of such combinations. Recently, Amazon has made an appeal to the Supreme Court challenging the order of the Appellate Tribunal for rejection of the revocation order and imposition of disproportionate penalties.[15]


The provisions of the regulation of combination as embodied under Section 6 read with Section 5 and the CCI (Procedure regarding the transaction of Business relating to Combinations) Regulations, 2011 (Combinations Regulation) have emerged as fundamental legislation governing M&A and transactional practice. Therefore, in light of the above provisions, transactional agreements shall be subjected to the prohibition enumerated in Section 6(1) concerning combinations causing AAECI and the approval enumerated in sub-section 2 of the section. As noticed in the case of the Amazon group, CCI has been vested with the right to regulate M&A transactions, and any deviation from the provisions of the Competition Act, 2002 in respect of such combinations may result in severe penalties. The Act has been in existence for over two decades. Therefore, with the introduction of the Competition (Amendment) Bill 2022, modifications to the existing provisions of the Act as well as additions are foreseen. The Bill seeks to widen the definition of anti-competitive agreements & customers, as well as introduce disposition of cases by single-member benches, as opposed to the present where cases are dealt with by a minimum of a three-member bench. The Bill intends to ensure speedy disposal of cases as well as provide room for negotiation for the parties with CCI, thereby facilitating the objective as embodied in the Preamble of the Act.

Author(s) Name: Jigyasa Kinger (University of Delhi)


[1]Competition Act, 2002, s 7(1)

[2] Editorial, ‘Air India’s acquisition of Air India Asia gets a CCI nod’, (The Hindu, 14 June 2022) <> accessed 24th July 2022

[3]Competition Act, 2002, s 6

[4]Competition Act, 2002, s 6 (2)

[5] Competition Act, 2002, s 5

[6] Ibid

[7] Competition Act, 2002, s 6 (2)

[8] Competition Act, 2002, s 5 (a) (ii)

[9] Competition Act, 2002, s 5(b)

[10] Competition Act, 2002, s 5 (c)

[11] NV Investment Holdings LLC v Competition Commission of India & Ors. (2022) Company Appeal (AT) No. 01/2022

[12] Competition Act, 2002, s 43A

[13] Competition Act, 2002, s 44

[14] Competition Act, 2002, s 45

[15] Indu Bhan, ‘Amazon moved SC over NCLAT ruling in Future case’ (The Financial Express, 30th July 2022) <> accessed 3rd August 2022

error: Content is protected !!