top of page


[AasthaGupta and Bianca Bhardwaj are law students from National Law University Jodhpur]


Last year, in a noteworthy order, the National Company Law Appellate Tribunal (NCLAT) upheld the Competition Commission of India’s (CCI) powers to probe into the Amazon-Future Coupon Private Limited acquisition. The order was significant because, for the first time, CCI was allowed to surpass the one-year period of limitation enshrined in Section 20(1) of the Competition Act, 2002 (CA02) and inquire into the acquisition of FCPL by Amazon that was facilitated by fraud and concealment of complete information from the CCI. The CCI has the power to initiate an inquiry into a combination under Section 20(1) of the CA02. However, the proviso thereto limits such power up to one year from the date of consummation of the transaction. This limitation period was at the crux of the debate in NV Investment Holdings v. CCI (Amazon case) wherein the CCI scrutinized Amazon’s acquisition of 49% shares in FCPL, one year after the consummation of the acquisition.

This piece analyses the NCLAT’s rationale in carving out an exception to the one-year limitation period in the Amazon case while exploring the possibility of extending the statutory period of merger review under the CA02 in light of recent global antitrust developments.

Decoding the Amazon-FCPL deal

Amazon and Future Retail’s protracted dispute was born when Amazon acquired 49% of the total capital share in FCPL, which was approved by the CCI in 2019. However, the CCI revoked this approval in 2021 and reopened the transaction for inquiry, citing suppression of material facts and relevant documents. A holistic appreciation of the notice filed by Amazon and the material on record suggested that Amazon had omitted disclosure of an interconnected transaction in Future Retail Limited (FRL) that was negotiated as part of the original combination. Further analysis revealed Amazon’s internal correspondence, which evinced its strategic rights over FRL.

Thus, the CCI found Amazon guilty under various provisions, including gun jumping under Section 43-A and imposed a penalty of INR 202 crores. The issue regarding the limitation period arose in appeal when Amazon contended that the CCI had exceeded its powers in initiating an inquiry into the combination in 2021, whereas the transaction was consummated in 2019.

Analysis of the NCLAT’s order

The NCLAT emphasized that the Preamble of the CA02 read with Section 18 provides that the object of the CA02 is to prevent practices having an adverse effect on competition. Considering the scheme of the Act and its underlying spirit, Amazon was under an obligation to notify the combination under Section 6(2) comprehensively without concealing any information so as to allow the competition regulator to make a complete and meaningful assessment.

Due to these primary considerations, the NCLAT was justified in transcending the limitation period in this case: the concealment of information amounted to a breach of trust, and hence the CCI could not be barred by limitation to initiate an inquiry in order to fulfil its fundamental purpose of promoting and sustaining competition.

However, it must be noted that the NCLAT embarked on further liberal construction of the residuary powers of the CCI under Section 45(2) to even allow the revocation of the approval order to Amazon. Interestingly, the CA02 does not expressly confer any power on the CCI to recall or review its own orders; the erstwhile Section 37 that granted such power was omitted by the Competition (Amendment) Act, 2007. Hence, this revocation appears to contradict the legislative intent of the CA02 and diminishes regulatory certainty.

Is the one-year limitation period reasonable?

The ratio of the Amazon case makes it clear that the one-year limitation period under the Act is not sacrosanct and may be subject to the ultimate object of the Act. At this juncture, it is imperative to explore whether the existing limitation period is reasonable or not. The Preamble of the CA02 read with Section 18 conclusively provide that its object is to create a space firms can compete in a free and fair manner and to prevent practices from having an adverse effect on competition. However, this must be achieved while keeping in view the freedom of trade and the economic development of the country. Thus, the Act inherently provides for a delicate balance to be maintained between competition regulation and business interests. The Commission duly considers business interests and furthers ease of doing business by providing for regulatory certainty, quick approval timelines for combinations, and granting of exemptions from notification to combinations among other ways.

Effectively, once the parties have notified the combination, the onus is on the CCI to swiftly act and pass an order approving, rejecting, or modifying the same under Section 31 of CA02 within 150 days. The CCI cannot take forever to make its assessment at the cost of ease of doing business.

A distinction must be drawn between the two cases. When the parties have notified the combination under Section 6, business interests dictate that competition assessment be completed within a stipulated time. However, when parties fail to notify, the CCI may take cognizance of the same within one year from the date of consummation of the combination under Section 20(1).

The unintended effect is that on expiry of this limitation period, the CCI may either penalize the parties for gun-jumping under Section 43A or undertake an ex-post review of any subsequent anti-competitive conduct of the parties under Section 3 or Section 4. However, neither option remedies the anti-competitive effects of the merger, which virtually defeats the purpose of ex-ante analysis of mergers.

Globally, the norm is ex-ante merger regulation in the pursuit of preventing potential anti-competitive harm caused through such combinations. Dealing with the effects of these mergers as a violation of section 3 or 4 would require additional conditions to be satisfied before the CCI can act, and most importantly, would be akin to inviting an affliction by neglecting preventive care and subsequently trying to provide palliative care to soothe the after-effects instead of curing the root cause.

Global bar on inquiry and investigations into mergers

The Canadian Competition Bureau has taken cognizance of the inadequacy of a one-year limitation period. In May 2023, Section 97 of the Canadian Competition Act was amended to extend the regulator’s powers to three years. The Bureau reasoned that a period of one year was inadequate to address adverse effects of a combination which may become evident at a later stage. This is particularly significant since Canada has experienced both the durations of limitation periods; which was reduced from 3 years to 1 year in 2007 and has again been restored to 3 years.

This approach to limitation periods on inquiry is not without a parallel world over. Australia also has a three-year period while the US and EU have no such limitation period at all. Interestingly, even the CA02 has been amended to introduce a three-year limitation period, albeit in Section 19 for filing information on anti-competitive agreements and abuse of dominant position before the CCI.

Why India needs an extension of the limitation period on inquiry

An extended limitation period will not affect the majority of transactions that are notified and do not raise competition concerns since the CCI is already constrained by the 150 day-limit to approve them. However, the limitation period becomes significant for those notifiable combinations where parties simply refrain from notification or wrongly claim an exemption from notification. Such cases are inherently difficult to detect and a one-year cap on initiation of inquiry further increases difficulty for the CCI. A three-year period would give enough time to the CCI to take cognizance of such transactions and may further incentivize parties to voluntarily notify transactions to get an order within 150 days, contrasted with the possibility of initiation of inquiry for three years.

Moreover, merger review being a forward-looking exercise, it is difficult for regulators to make an accurate assessment of all adverse effects on competition when the deal closes due to dynamic market conditions. This is more pronounced in this era of fast-paced digital and data-driven markets that pose new challenges and involve new phenomena, inexplicable by traditional theories of harm.

A three-year period would help the CCI analyse the effects of a combination over time and fully assess practical considerations such as ‘potential’ overlaps between the parties or post-merger price increases. This is particularly significant given the recently widened scope of merger review through the introduction of the deal value thresholds in the Competition (Amendment) Act, 2023.


[Aastha Gupta and Bianca Bhardwaj are law students from National Law University Jodhpur]s having adverse effect on competition, superseded Section 20(1). Taking inspiration from the Canada, the CCI must be allowed to examine combinations up to three years after their consummation, cou pled with appropriate safeguards that help the CCI to perform its duty as enshrined in the Preamble of the Act. This amendment is only reasonable as it would enhance predictability in evolving markets and provide a fail-safe opportunity to review combinations that do not raise substantive questions within the short period of one year.

144 views0 comments


bottom of page