The Competition Commission of India is trying to catch killer and creeping acquisitions by keeping an eye out for the deal values of a lot of digital businesses that do not meet the asset turnover thresholds set out under the Competition Act, said Ravneet Kaur, the Competition Commission of India's chairperson, on Wednesday.
Kaur's comments came while speaking at a panel discussion on balancing innovation with regulation at the Confederation of Indian Industries' Global Economic Policies Forum in New Delhi on Wednesday.
However, Kaur reinforced that CCI's intention is not to block deals. “We look at structural and behavioural remedies so that the deal can go through with modifications,” she said.
As per the 2023 amendments to the Competition Act of 2002, an additional layer of scrutiny was introduced to check the competition impact of those deals that do not meet the asset turnover thresholds set out under the Act and were therefore escaping the regulator's attention. As per the amendment, any deal value crossing the Rs 2,000 crore mark and the company being acquired having substantial business operations in India would fall under the CCI's scrutiny.
The panel discussion had other big names taking their respective stances on balancing the need for regulation with the need for promoting innovations.
The Chief Economic Advisor of India, V Anantha Nageswaran, said that the cost of an innovation forgone is not easy to measure. However, he added that the very nature of regulation allows for easy scrutiny of the regulator. Regulators are questioned on an ex-post basis, whereas a regulator's decisions are taken on an ex-ante basis.
K Rajaraman of the International Financial Services Centres Authority said that regulators need to find the balance between innovations and regulations. Regulators must ensure that they do not stifle innovations. “It is an everyday fight in as much as a regulator is only questioned when something goes wrong, never praised when something goes right,” he said.
The chairperson of the Insurance Regulatory and Development Authority of India, Debasish Panda, said, Imagine going on a road with no rules and no brakes. This is what a field with a lack of regulation looks like, Panda remarked. However, he concluded by saying that regulations in the insurance sector have now moved from a rule-based to a principle-based approach.
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