Tuesday, June 27, 2023

India's anti-trust regulator to probe if Air India-Vistara merger hurts competition: Report

New Delhi: The proposed Air India-Vistara merger might not have smooth sailing as previously predicted. The Competition Commission of India (CCI) has issued a show-cause notice to the Tata Group-owned Air India, asking why an investigation should not be conducted into the merger, according to a report in Mint. 

The Tata Group has been given 30 days to respond to the notice by the fair-trade regulator and secure approval for the merger of its airlines without any investigation. 

The publication, quoting a source said, if the CCI is not impressed by the response and launches an investigation, the Tata Group will have to either divest its stake in Vistara or commit to “behavioural guidelines" that will not impact competition in the aviation sector. 

Notably, CCI approval is mandatory for any 'mergers and acquisitions' that meet the asset and turnover threshold enshrined under Section 5 of the Competition Act.

The statutory body under the Government of India conducts its homework into any merger in two phases. The first phase involves ascertaining if the merger is likely to cause an adverse effect on the competition in the relevant market or not. The second phase of the investigation is launched when the regulator sees a potential fallout in competition due to a merger.

The issuance of the show cause notice comes in the backdrop of Tata Group approaching the anti-trust regulator in April. 

27/06/2023 Abhinav Singh/WION

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