Top 10 skills you need to become a competition lawyer

Shweta Rath November 21, 2020

Introduction

When two or three companies undergo any form of merger, acquisition or amalgamation, they are essentially joining forces in terms of monetary and physical resources. Their collaboration will definitely bring in operational and strategic efficiencies. Therefore, their collaboration needs to be tested upon the market realities of the sector in which they operate. The following questions may arise when M&A transactions happen between companies:

Will their collaboration allow them to raise prices? Imagine if tomorrow, Uber and Ola were to merge- it would absolutely kill competition and fares could skyrocket leaving consumers with no real substitutes or CHOICE.
Will the collaboration lead to fewer players in the market? What if it is a market which is only run by those two players intending to collaborate?
Will the collaboration give the parties an effective control on the downstream players in the market such as the wholesalers, distributors and retailers? Imagine a company owning iron ores merging with a steel manufacturer: an amazing vertical integration!!
Will the collaboration create barriers for future players to enter the market? What if this market requires heavy capital investment, like aviation?
Will the collaboration, despite the potential negative effects, bring any efficiencies into the economy?

These are some of the questions that the Competition Commission of India (CCI) will consider for such M&A transactions involving companies of a certain size. In simple words, the CCI would want to know how M&A transactions will impact the competitiveness of the market in which those players will be operating. This is why you need an approval from the CCI regarding the same.