Mrtp Commission Seeks Power To Vet Mergers

The Commission has also suggested a change in Section 2 (O) of the Act to enable it to make lawful presumptions regarding anti-competitive activities when it is glaring in the face, without any need to produce evidence in its support.

The move comes in the wake of a Supreme Court judgment in the HLL-Tomco merger case which struck down the commissions power to decide on proposals of merger and amalgamation referred to it by the government.

The Act was amended in 1991 and Chapter 3 of the Act has been deleted considering such regulations only imposed unnecessary shackles on the industry, thereby retarding industry growth.

 

According to ministry sources, the government is considering various changes to strengthen the MRTP Act besides bringing about relevant amendments to extend the Commissions role as an anti-trust body.

According to an MRTPC member, The Commission has forwarded a proposal to the government to amend Section 23 of the MRTP Act. This is to empower the Commission to decide the cases of merger and amalgamation between companies at the pre-merger stage and has been referred to it by the government.

At present, the Commission has power to analyse only the consequences of a merger or amalgamation. In other words, if the merger between two companies has resulted in anti-competitive activities, then the Commission has the power to suggest to the government to undo the merger.

However, Commission members reiterate that post-merger analysis of the merger is too late and often ineffective. According to them, Most countries, even those with free-market systems, have an expert body or a watchdog to look into mergers and amalgamations. We need a similar system in the country to prevent monopolistic activities.

Industry had also complained that the Commission took unreasonable amount of time to decide on merger proposals, thereby posing a hindrance to the expansion of companies. However, members in the Commission point out that it is unfair to blame the Commission alone for the delay since there are many legalities involved.