The Competition Commission of India (CCI) approved the proposed merger of Air India and Tata SIA Airlines (Vistara), and acquisition of certain shareholding by Singapore Airlines in Air India subject to compliance of voluntary commitments offered by the parties.
The development is a major step forward for Tata Group in consolidating its aviation business.
Vistara and Air India are full-service carriers that are part of the Tata Group, and Singapore Airlines holds a 49 per cent stake in Vistara.
In November last year, Tata Group announced the merger of Vistara with Air India under a deal wherein Singapore Airlines will also acquire a 25.1 per cent stake in Air India. The deal would mark a major consolidation in India’s fast-growing aviation space.
The approval for the proposed combination was sought from CCI in April this year. The CCI in June asked for more details with respect to the proposed merger.
Competition Commission Of India
• The Competition Commission of India (CCI) was established in October 2003 under the Competition Act, 2002 for the administration, implementation, and enforcement of the Act.
• The CCI became functional in March 2009.
• The CCI functions as a market regulator by preventing and regulating anti-competitive practices in the country. It also carries out advisory and advocacy functions.
Objectives of CCI:
i) Eliminate practices having adverse effects on competition.
ii) Promote and sustain competition in markets.
iii) Protect the interests of consumers.
iv) Ensure freedom of trade in the markets of India.
v) Establish a robust competitive environment.
• The CCI consists of a chairperson and a maximum of six members appointed by the central government.
• The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.
What is the process of the CCI inquiry?
The CCI can initiate an inquiry:
i) On its own on the basis of information and knowledge in its possession.
ii) On receipt of an information.
iii) On receipt of a reference from the central government or a state government or a statutory authority.
• Any person, consumer, consumer association or trade association can provide information relating to anti-competitive agreements and abuse of dominant position.
• If the Commission is of the opinion that there is a prima facie case, it shall direct the Director General, appointed under the Act, to investigate the matter and report his findings to the Commission.
• After receipt of the investigation report from the Director General, the Commission may forward it to the concerned parties.
• If the report of the DG does not find any contravention of the Act, the Commission shall seek objections from the concerned parties. After considering the objections received, if any, the Commission may accept the report of the DG, or require further investigation to be made by the DG or make inquiries itself.
• In conclusion of the above broad process, the Commission shall determine whether it is a case of anti-competitive agreement or abuse of dominant position or both and after hearing the concerned parties and pass appropriate orders.
• National Company Law Appellate Tribunal (NCLAT) hears appeals against any direction issued or decision made or order passed by the CCI).
