Mergers Of Vodafone-Idea And Jet-Etihad: A Boon Or Bane To Competition
- IJLLR Journal
- 2 minutes ago
- 2 min read
Naimisa Madduri, NALSAR University in collaboration with IICA
1.1 Introduction
Post covid era came as a financially volatile period for not only the public in general but also the big corporate players in the markets. The year 2022 witnessed several high-profile mergers including the takeover of twitter by Elon Musk, merger between Air India and Vistara, merger between PVR cinemas and INOX and the very favourite merger between Zomato and Blinkit. While a lot of these mergers involved each of the parties having either market share contrary to the other, the impact on the market was negligible. Whereas, some other mergers where the parties engaged in similar trading of goods and holding majority of the shares in the market, announced such transactions, the apprehension of these mergers creating an adverse effect on the competition arises.
The Act introduced a merger control system which entered into force in 2011. In a short span of more than a decade, CCI has evolved into a robust market regulator that strives to continuously work with various investors and the international antimonopoly committees to develop a robust merger evaluation framework. The commission has cautiously made an inquiry into a number of transactions and successfully restricted the anti-competitive ones. It is a very huge responsibility that the commission carries as the impact of an anti-competitive merger can be extremely detrimental. The commission is also expected to shield the benefits certain mergers offer to the public that might ultimately lead to the increase in the standards of the society. “CCI will have to bear in mind the requirements of a diverse economy such as ours and strive to strike a balance between enforcement and advocacy, dovetailing the two functions”, as stated by the Chairperson of the Competition Commission of India on 7th June, 2022 in a conference conducted by the Ministry of Corporate Affairs.
The merger of Vodafone-Idea carried on its face, the immediate necessity to defend the competition by Reliance Jio in the Telecom industry. The merger instilled confidence in the Telecom market when there was a hike in the prices due to the dominance Reliance-Jio established. Although the merged company took over the market, the transaction was supported by the pros it brought to the customers. Coming to the Jet-Etihad airways merger, it was the first time the commission’s decision was challenged before the COPMAT. It is also one of the few cases where the Commission has provided a detailed analysis of both the relevant merged market and the Commission's competitive assessment. The researcher has in detail, explained the facts, reasons and impact of the mergers and the commission’s decision, in the latter parts of the paper with the help of statistics and case laws.
