Combinations and their anticompetitive effect under the Competition Law


Every business is a place of competition, where each entity competes with the other to gain clients or customers. Healthy competition allows all companies to engage in fair business practices.

“combination” refers to a purchase, merger, or amalgamation by one or several people of two or more businesses. The definition of combinations in the Act was enacted to prevent dominant companies from abusing their dominant position. The Competition Act of 2002 binds parties to a combination, and the notification is sent to the Competition Commission of India.

The article will also discuss the anticompetitive effect of a combination that leads to monopolization in the market. Businesses always try to reduce competition in the market, as it reduces the individual company’s market share, customer base, and growth.

Evolution of Combinations in India

Business enterprises initially found it difficult to survive at the turn of 20 th century. Multinationals found it easier to do business in India with the help of foreign investment. The two international agreements, the General Agreement on Tariffs and Trades (GATT)[i] and The Trade-Related Aspects of Intellectual Property Rights(TRIPS)[ii], also contributed to the inclusion of the concept of combination under the Competition Law. India’s liberalization, globalization, and privatization paved the way for the idea of combinations to be included in its Competition Law.

The Government of India formed the Raghavan Committee based on these two agreements. The committee suggested that the Government focus on Combinations when reviewing the Competition Law.

This recommendation was made to stop dominant companies from abusing their dominant position to reduce competition or engage in unfair business practices on the market The concept of Combinations, which was a focus under the Act, was introduced in this way.

Elon Musk is a good example of this. He is the CEO of Tesla, and he recently purchased Twitter.

Through this acquisition of $44 billion, Mr. Musk now holds a majority share of Twitter (9.2%).

The Competition Act of 2002 does not define mergers or ‘amalgamations.’ A union is when two or more companies merge to expand their business. A merger is when one company controls certain assets, voting rights, and decision-making powers over another.

This can be seen in the recent Zee-Sony merger, where Sony Pictures Networks India (one of the largest media and entertainment companies) will have a majority stake (52.93%) and Zee Corp (47.07%) through the merger. This merger will allow the Sony Group to nominate most board members. These merged businesses own 75 TV stations and two movie studios. They also have two online video streaming services and a digital studio.

The combination includes amalgamation when two or more businesses merge to do business and form a new entity. The older company is destroyed. Strong or large companies

Transferee: The weaker company is taken over by the recipient—the merged company shares in the profits and losses of the company.


Why is it necessary to merge, acquire, and amalgamate? Why do big companies perform it? What are the benefits of connecting companies?

Answering the questions above provides the goal of the concept of combination on the market. Combinations are performed to:

Market Share of a Particular

Process Control by the

The supply chain is the

Profits of the Company

Potential consumers.

The combination is also done to compete in the global market and reduce competition. In India, the threshold for a merger is Rupees 1,500 crores of combined assets and 4,500 crores combined turnover.


Conglomerate, or Lateral: Any enterprise carrying out different types of business combined with the same.

eBay and Pay Pal Merger 2002 [vi]eBay is an e-commerce that carries out consumer-to-consumer and business-to-consumer sales.

Paypal, on the other hand, is a digital payment platform. These companies merged to improve their business.

Horizontal enterprises that are similar and have a common goal for the growth of their business are called horizontal enterprises.

a) Disney agreed to pay $7,4 billion in 2006 to acquire Pixar [vii]. Disney is an American multinational media and entertainment company. Pixar, a subsidiary of Disney, is also based in the United States.

US-based animation firm. Pixar CEO Steven P. Jobs was also given a new car.

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