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Merger Threshold and Merger Thresholds in the Digital Economy

– Abdullah Hussain & Prerna Parashar

In India, much like the rest of the world, the thresholds for merger notification to the competition authority is based on the turnover of the parties involved in the deal. In 2014, when Facebook acquired WhatsApp for $19 Billion, the question of whether antitrust law was doing enough to prevent acquisition of ‘nascent competition’ and ‘killer acquisitions’ came to focus, and particularly whether a transaction value threshold ought to be introduced. Since then, various reports have studied digital markets, including the question of sufficiency of merger thresholds. In fact, the CCI in 2020 released its market study of e-commerce in India, and noted that these markets are concentrated with a few large players. A more recent example that questions the appropriateness of the current antitrust law in detecting such deals is Zomato’s acquisition of Uber Eats for $250 Million. This paper questions appropriateness of the current threshold in India. It explores and analyzes various changes that have the potential to ameliorate the current law. These include lowering current thresholds, introducing a transaction-value threshold, increasing the number of staff of the Combinations Division of the CCI, and providing more residuary power to the CCI.

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