Home » Corporate » CCI invites public comments regarding examination of non-compete restrictions under regulation of combinations

CCI invites public comments regarding examination of non-compete restrictions under regulation of combinations

The Competition Commission of India (CCI) has been looking at non-compete restrictions stipulated in mergers and acquisitions while reviewing combinations. Notifying parties are required to furnish information on non-compete restrictions for the purpose of its examination. The CCI has issued a Guidance Note explaining the circumstances under which a non-compete restriction would be regarded as ‘ancillary’ or ‘not ancillary’. The Guidance Note provides that 3 years of non-compete obligation is usually justified in case of transfer of goodwill and know-how and two years in case of transfer of goodwill alone. It further provides that the scope of non-compete shall be restricted to the business sold and the territory where it was conducted. However, a finding that the restriction is not ancillary does not raise any presumption of infringement under the provisions of the Act.

It has been observed that prescribing a general set of standards for assessment of non-compete restrictions may not be appropriate in modern business environments. While it may be possible to conduct a detailed examination on case by case basis, the same may, however, not be feasible considering the timelines followed in combination cases.

The CCI, therefore, proposes to omit paragraph 5.7 of Form I in the Combination Regulations[1] that seeks information regarding non-compete restrictions agreed between the parties to combination and justification for the same. This would allow the parties flexibility in determining non-compete restrictions, while also reducing the information burden on them. However, the parties will be responsible for ensuring that their non-compete arrangements are competition compliant. Competition concerns, if any, that may arise from non-compete restrictions can be looked into under Sections 3 and/ or 4 of the Act.

AA copy of the draft amendment to the Combination Regulations is available on the website of the CCI (www.cci.gov.in ). Comments are invited from the public and may be emailed to combination.cci@nic.in by June 15, 2020.

About Indianindustry Media

Leave a Reply

Your email address will not be published. Required fields are marked *

*

x

Check Also

JSPL Observes 90th Birth Anniversary of Shri O.P. Jindal

The employees of Jindal Steel and Power Ltd. (JSPL) led by Mr. Damodar Mittal, Plant ...

JSPL continues its effort to support the Fight against COVID-19

With an objective to support the district administration, government and the local community to fight ...

NLC India Limited, a Navratna Public Enterprise under the Ministry of Coal, commences Coal production for the first time

NLC India Limited, a Navratna Public Enterprise under the Ministry of Coal, has for the ...

CPSEs under the Ministry of Steel Pay Tax Dues under Vivad Se Vishwas scheme

Several Central Public Sector Enterprises (CPSEs) under the  Ministry of Steel have made payment of ...

NALCO clocks all time high production of bauxite and alumina amidst corona crisis

National Aluminium Company Limited (NALCO), the Navratna CPSE, under Ministry of Mines, Govt. of India ...

MCA filed 11,082 prosecutions for non-filling of statement of accounts by Companies

As per the provisions of the Companies Act, prosecutions are filed by the Ministry of ...

Company Law Committee-2019 submits its report to Finance Minister

The Company Law Committee was constituted by the Ministry of Corporate Affairs in September, 2019, ...

JSPL Supports Safety in Small Scale Industries of Angul Region

A safety awareness program was organized by Jindal Steel & Power Limited (JSPL) at M/S ...

JSPL Foundation distributes Study materials to children of Jail inmates

JSPL Foundation, the Corporate Social Responsibility (CSR) arm of Jindal Steel and Power Ltd. (JSPL), ...

FM: CCI should safeguard Indian enterprises from abuse by overseas entities 

Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman said  that Competition Commission of India ...

WP2Social Auto Publish Powered By : XYZScripts.com