The Deal Value Threshold Under The Competition Act, 2002: A Game Changer For Technology, Startup And E-Commerce M&A In India
- IJLLR Journal
- 5 minutes ago
- 1 min read
Harsh Chauhan, LL.B., University of London
ABSTRACT
The introduction of the Deal Value Threshold (DVT) under the Competition (Amendment) Act, 2023 and the CCI (Combinations) Regulations, 2024 marks a paradigm shift in India’s merger control regime. Designed primarily to address “killer acquisitions” in digital and technology markets, the DVT requires notification of transactions exceeding INR 2,000 crore where the target has substantial business operations in India, irrespective of its assets or turnover.
This paper analyses the legal framework of the DVT, including the calculation of transaction value and the criteria for determining Substantial Business Operations in India (SBO). It evaluates the practical impact of the new regime on tech, startup, and e- commerce M&A, highlighting increased compliance costs, valuation uncertainties, and potential delays in deal execution. Drawing from analyses by AZB & Partners, Nishith Desai Associates and Baker McKenzie, the paper also undertakes a comparative study with transaction value thresholds in Germany, Austria, and the United States.
The paper argues that while the DVT effectively plugs into a critical enforcement gap identified by the Competition Law Review Committee (2019), certain ambiguities in valuation methodology and SBO determination persist. It concludes with recommendations for clearer guidelines to balance robust competition enforcement with the ease of doing business in India’s digital economy.
Keywords: Deal Value Threshold, Competition Act, Merger Control, Killer Acquisitions, Digital Markets, CCI, M&A Regulation.
