Treatment Of 'Inter-Connected' Transactions Under Indian Competition Law

The identification and treatment of transactions that are 'inter-connected with a notifiable 'combination' is fraught with uncertainty. In addition to the main notifiable combination, as determined in accordance with Section 5 of the Act, Regulation 9 of the CCI Regulations, 2011 states that: "Where the ultimate intended effect of a business transaction is achieved by way of a series of steps or smaller individual transactions which are inter-connected, one or more of which may amount to a combination, a single notice, covering all these transactions, shall be filed by the parties to the combination." The 'ultimate intended effect' test While there is no formal guidance from the CCI in relation to the meaning of 'inter-connected, its decisional practice indicates that the following factors may be relevant in making this determination: one transaction is conditional or contingent on the other; the transactions are based on a single agreement or term sheet; the transaction documents are authorized at the same board meeting; there are cross-references in transaction documents, press releases, and/ or regulatory filings; the deal is structured as a multi-stage process, but expected to close by a certain common date; there is simultaneity in negotiation, execution, consummation and/ or public announcement; it is impractical and unreasonable to view the transactions separately; and/ or the transactions involve common parties. In this regard, the CCI held that "given the significant uncertainty surrounding the exercise of further option rights, capability of each spectrum acquisition transaction to affect market dynamics and fast changing competition dynamics, the approval of the Commission is subject to the condition that any future acquisition of the spectrum under the RCOM/ RTL Option Agreements not completed within one year from the date of the decision of the Commission would require fresh filing". E. Whether preparatory steps are considered 'inter-connected' Similarly, past CCI orders do not provide any objective guidance on whether preparatory steps undertaken prior to a notifiable combination, are 'inter-connected' with such combination.