Jet Etihad Deal Cleared by CCI: Few Observations


The Competition Commission of India has approved the proposed acquisition of a 24 percent stake in Jet Airways by Etihad Airlines. The approval order of the CCI can be accessed here. It is the first combination approval matter in which there is a dissenting order by one of the members of the Commission. The dissenting member in its order stated that the said deal “may cause an appreciable adverse effect on competition within the relevant market of international air passenger traffic from/to India at the macro level”. Contrary to the majority order, the dissenting member of the Commission stated that the parties be issued a show cause notice calling upon them to reply within thirty days as to why an investigation in respect of the proposed combination should not be conducted. The minority order can be accessed here. The majority of the Commission members approved the combination without a thorough investigation by the DG.  There are certain reasons as to why ordering a thorough investigation by the DG in such a horizontal combination may have been a good call.

Prospective Analysis of Combinations

Combination Regulation involves prospective analysis regarding the future impact of the combination on the prevailing competition in the relevant market. Unlike Section 3 & 4 violations, combination regulation involves ex ante control whereas the aforesaid violations involve ex post control. It may be noted that combination regulation analysis is not easy as it involves predicting the future conduct of parties and conditions of the market. In the matter of Tetra Level BV vs. Commission (EU), the Court of Justice stated that

” A prospective analysis of the kind necessary  in merger control must be carried out with great care since it does not entail the examination of past events- for which often many items of evidence are available which make it possible to understand the causes – or of current events, but rather a prediction of events which are more or less likely to occur in future if a decision prohibiting the planned concentration or laying down the conditions for it is not adopted.”

Lack of robust information/data

In para 22 of the minority order,the member pointed out that all the information available with the Commission has been largely provided by the concerned parties. The veracity of the data has not been independently tested and necessary relevant data required for the purpose of analyzing the said combination, due to paucity of time, has not been collected. The order further states that there is no independently credible data base available with any recognized institution/authority. Therefore, considering the various competition concerns arising, it was suggested in the order that a thorough investigation be carried out for the purposes of a robust competition assessment,

Ex post unscrambling of eggs

In the majority order the Commission stated that “it is incumbent upon the Parties to ensure that this ex ante approval does not lead to ex post violation of the provisions of the Act”. Though, there is the possibility that ex post a combination may be divested. However, the same has major consequences for the parties and for the consumers at large. Subsequent to a combination approval, the parties carry out various activities like combining their business operations etc. An order of divestiture at a later stage may be difficult, costly, punitive to the business involved in the merger and detrimental to the interests of consumers.


Considering the lack of robust verifiable data, prospective analysis of combination regulation and the costs of ex post divestiture, the order of the dissenting member of the Commission calling for an in-depth investigation of the said matter holds good. Do u think that especially in combination regulation matters, in case there is a dissent on the part of any member(s), as a rule the Commission should order for a DG investigation?


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