Corporate Restructuring, Valuation and Insolvency · Regulation of Combinations

Inquiry into Combinations and Factors for Assessment

Updated 11 October 2026 · Fact-checked

Under the Competition Act, 2002, the CCI inquires into whether a combination has caused or is likely to cause an appreciable adverse effect on competition (AAEC) in India. It forms a prima facie opinion within 30 days, weighs the Section 20(4) factors, and then approves, modifies or blocks the deal. A deemed approval follows after 150 days.

Understand Inquiry into Combinations and Factors for Assessment

A combination is a deal (acquisition, control, merger or amalgamation) that crosses the thresholds in Section 5. The CCI does not stop every such deal. It asks one question: does the combination cause, or is it likely to cause, an appreciable adverse effect on competition in the relevant market in India?

The CCI starts an inquiry in two ways. On receipt of a notice under Section 6(2), it must inquire (Section 20(2)). On its own knowledge or information, it may inquire into combinations covered by Section 5 (Section 20(1)). That suo motu power has a limit: no inquiry can begin after one year from the date the combination took effect.

Section 20(4) lists the factors the CCI must have due regard to. You can group them. Market structure: imports, barriers to entry, concentration, countervailing power, substitutes, market share. Effect on rivals and prices: ability to raise prices or margins significantly and sustainably, effective competition likely to sustain, removal of a vigorous competitor. Business facts: vertical integration, failing business, innovation. Balancing: relative advantage by way of contribution to economic development, and whether the benefits outweigh the adverse impact.

The procedure runs in stages. Within 30 days of the Section 6(2) notice, the CCI forms its prima facie opinion (Section 29(1B)). If it has no prima facie concern, the combination is deemed approved (proviso to Section 31(1)). If it has a concern, it issues a show cause notice, and the later steps under Sections 29 and 29A follow. Section 31 then gives the final orders: approve, approve with modifications, or direct that the combination not take effect. If no order is passed within 150 days of the notice, the combination is deemed approved (Section 31(6)).

Key rules to remember

Test for inquiry: Inquiry question = has caused or is likely to cause an appreciable adverse effect on competition in India; Section 20(1) and 20(2). Suo motu inquiry cannot start after one year from the date the combination took effect.
Prima facie opinion: Within 30 days of receipt of Section 6(2) notice; Section 29(1B). If no prima facie opinion is formed, the combination is deemed approved (Section 31(1) proviso).
Show cause response: Parties respond within 15 days of the notice; Section 29(1). The CCI may then call for a Director General report (Section 29(1A)).
Publication and objections: Direction within 7 days; publication within 7 days of direction; objections within 10 days of publication; Section 29(2) and (3). Section 29(4): the CCI may call for more information within 7 days of the objection period; parties furnish it within 10 days (Section 29(5)).
Statement of objections: Parties explain within 25 days of receipt; Section 29A(1). Parties may offer modifications along with their explanation (Section 29A(2)).
Modification rounds: CCI communicates rejection within 7 days; parties revise within 12 days; CCI evaluates within 12 days of receipt; Section 29A(3) and its first proviso. The CCI may also propose modifications suo motu (second proviso).
Outer time limit: No order within 150 days of Section 6(2) notice = deemed approval; Section 31(6).
Section 31 powers: Approve | approve with modifications | direct not to take effect | order not given effect to, declare void, or frame a scheme; Section 31(1), (2), (3) and (5). A void combination is dealt with under other laws as if it never took place (Section 31(13)).

How to solve Inquiry into Combinations and Factors for Assessment questions

Use this method for any question on how the CCI inquires into a combination and what it can decide.

1Identify the trigger: a Section 6(2) notice (mandatory inquiry) or the CCI's own knowledge (suo motu). If suo motu, check whether one year has passed since the combination took effect.
2State the test: appreciable adverse effect on competition in the relevant market in India.
3Apply the 30-day prima facie opinion. If no prima facie opinion is formed, state that the combination is deemed approved.
4If a prima facie concern exists, walk through the procedure: show cause notice, response, publication, objections, further information, statement of objections.
5Pick the Section 20(4) factors that fit the facts and apply each to the data given. Do not recite all fourteen unless the facts call for it.
6Weigh the efficiency side: failing business, innovation, economic development and benefits versus adverse impact.
7Conclude with the Section 31 outcome: approval, approval with modifications, or a direction that it not take effect. Check the 150-day limit.
8Add the consequence: if void, other laws treat the deal as if it never happened.

Quickest way: Facts to Factors to Order

When to use it: Use this for a short case-based question where you have 10 to 12 minutes.

Write the trigger and the one-line test (AAEC in India).
Pick 4 or 5 factors from Section 20(4) that match the facts, such as market share, entry barriers, removal of a competitor and failing business.
Mark each factor as pointing towards or against harm.
Weigh them against benefits and give the outcome with the Section 31 power.
Close with the timeline: 30 days for the prima facie opinion and 150 days for deemed approval.

Common mistakes in Inquiry into Combinations and Factors for Assessment

Treating the 150 days as the time for the prima facie opinion.
Both numbers appear in the same procedure and students merge them.
Fix: Prima facie opinion is within 30 days of the notice. 150 days is the outer limit for the final order, after which the combination is deemed approved.
Saying the CCI can start a suo motu inquiry at any time.
Students remember the power but not its proviso.
Fix: State that no inquiry can begin after one year from the date the combination took effect.
Writing that only market share decides appreciable adverse effect.
Market share is the most familiar factor.
Fix: Section 20(4) requires due regard to all or any of the listed factors. Use several, and include the efficiency factors.
Forgetting that no prima facie opinion means deemed approval without a separate order.
Students assume the CCI must pass an order in every case.
Fix: Cite the proviso to Section 31(1): if the CCI does not form a prima facie opinion under Section 29(1B), the combination is deemed approved and no separate order is needed.
Mixing up the periods under Sections 29 and 29A.
There are many short periods: 15, 7, 10, 25 and 12 days.
Fix: Learn them in order of the procedure. Section 29 gives 15, 7, 7, 10, 7 and 10 days. Section 29A gives 25, 7 and 12 days.
Stating only 'approve or reject' as the CCI's powers.
Students ignore the modification route.
Fix: Add approval subject to modifications, and the Section 31(5) orders: not given effect to, declared void, or a scheme framed by the CCI.

Worked examples

Example 1

Arvind Steels Ltd and Bharat Alloys Ltd, two of the three large producers of a specialised alloy in India, notify a merger to the CCI. Together they hold a large share of the market. Imports are negligible, new entry needs heavy capital, and Bharat Alloys is financially healthy. Advise on how the CCI will assess the combination and what it may do.

Show the solution

Trigger: the parties have filed a notice under Section 6(2), so the CCI must inquire under Section 20(2) whether the combination has caused or is likely to cause an appreciable adverse effect on competition in India.
Prima facie opinion: within 30 days of the notice the CCI forms its prima facie opinion (Section 29(1B)). The facts suggest a concern, so it would issue a show cause notice and the parties would respond within 15 days (Section 29(1)).
Factors, market structure: combined market share is high (Section 20(4)(h)), concentration is high (clause (c)), imports are negligible (clause (a)) and entry barriers are heavy (clause (b)).
Factors, effect on rivals: the merger removes one of only three large competitors (clause (i)), which raises the likelihood that prices or margins can be raised significantly and sustainably (clause (e)).
Factors, defences: Bharat Alloys is healthy, so the failing-business factor (clause (k)) does not help. The parties would need to show innovation or economic development benefits that outweigh harm (clauses (l), (m) and (n)).
Process: the CCI may call for a Director General report, direct publication, invite objections and then issue a statement of objections, to which the parties reply within 25 days (Section 29A(1)).
Outcome: the parties may offer modifications (Section 29A(2)). If the CCI accepts, it may approve subject to modifications (Section 31(3)). If the harm cannot be eliminated, it directs that the combination not take effect (Section 31(2)) and may order it not given effect to, declare it void or frame a scheme (Section 31(5)).

Answer: The CCI will test the merger against the Section 20(4) factors. High concentration, high entry barriers, negligible imports and loss of a competitor point to appreciable adverse effect on competition. Unless modifications cure the harm, it may direct that the merger not take effect, or approve it subject to modifications.

Example 2

Meridian Pharma Ltd notified a combination to the CCI on 1 March. The CCI formed no prima facie opinion that the combination would harm competition within 30 days. A competitor argues that the combination still needs a formal CCI order. Is the competitor right? Also, if the CCI had formed a prima facie opinion and passed no order, by when would deemed approval arise?

Show the solution

Rule: under Section 29(1B), the CCI must form its prima facie opinion within 30 days of receipt of the Section 6(2) notice.
Application: the CCI did not form a prima facie opinion of harm in that period.
Consequence: the proviso to Section 31(1) says the combination is then deemed approved and no separate order is required. The competitor is wrong.
Second limb: if a prima facie opinion had been formed, the full procedure would follow. Under Section 31(6), if no order or direction is issued within 150 days from the date of the notice, the combination is deemed approved.
Counting: 150 days from 1 March. March has 31 days, so 30 days remain in March after 1 March. Adding April (30), May (31) and June (30) gives 121 days at 30 June. 29 more days reach day 150 on 29 July.

Answer: The competitor is wrong. Without a prima facie opinion, the combination is deemed approved and no separate order is needed. If a prima facie opinion had been formed and no order issued, deemed approval would arise at the end of 150 days from the notice date, that is, on 29 July.

Exam tips

Write section numbers beside each point: 20 for inquiry and factors, 29 and 29A for procedure, 31 for orders. Examiners reward the provision-analysis-conclusion pattern.
Do not list all fourteen factors by rote. Choose those that match the facts and say how each points.
Always cover both outcomes of the efficiency side: failing business, innovation, economic development and benefits outweighing harm.
Keep a one-line timeline table in your head: 30 days prima facie opinion, 15 days show cause reply, 25 days statement of objections reply, 150 days deemed approval.
For a case question, end with a clear order under Section 31 and mention the consequence of a void combination under Section 31(13).

Practice questions from Regulation of Combinations

Inquiry into Combinations and Factors for Assessment: frequently asked questions

What is appreciable adverse effect on competition under Section 20?

It is the test the CCI applies to a combination. The CCI asks whether the combination has caused or is likely to cause an appreciable adverse effect on competition in the relevant market in India. Section 20(4) lists the factors it must have due regard to.

How many days does the CCI have to approve a combination?

The CCI must form its prima facie opinion within 30 days of the Section 6(2) notice. If it passes no order or direction within 150 days from the date of the notice, the combination is deemed approved under Section 31(6).

Can the CCI inquire into a combination on its own?

Yes. Under Section 20(1) it can act on its own knowledge or information. It cannot start such an inquiry after one year from the date on which the combination took effect.

What can the CCI do if a combination harms competition?

It can direct that the combination not take effect. It can approve it subject to modifications that remove the harm. Where harm cannot be removed or modifications are not carried out, it may order that the combination not be given effect to, declare it void, or frame a scheme for the parties to implement.