A parliamentary panel has called for lowering the Rs 2,000-crore deal value threshold (DVT) for the Competition Commission of India (CCI) to approve merger and acquistions (M&A) transactions. It warned that the existing threshold could allow large companies to acquire smaller businesses without adequate competition oversight.
The standing committee on finance suggested lowering the threshold for transactions involving MSMEs if market studies show the current level allows potentially anti-competitive acquisitions to escape CCI review.
The DVT was introduced under the 2023 amendments to the Competition Act as an additional trigger for CCI scrutiny of M&As. It is intended to capture transactions where the deal value is high even though the target entity might not have substantial assets or turnover – a feature particularly relevant to acquisitions of tech companies and start-ups. The Rs 2,000-crore threshold applies where the target also has substantial business operations in India. In its response to the committee, the government defended the existing threshold, stating it was introduced in September 2024 after stakeholder consultations.
“The committee observes that a “one-size-fits-all” DVT may fail to protect the digital ecosystem from gradual monopolization, as dominant platforms continue to leverage “invisible” market distortions – such as data silos and algorithmic self-preferencing – that are not currently addressed by a codified regulatory framework,” the panel noted.
Additionally, the panel pushed for expanding the proposed Digital Competition Bill (DCB) to cover “virtual assistants” and “cloud services,” arguing that the existing ex-post competition framework is inadequate to deal with the rapid concentration of power in digital markets. It called for an ex-ante regime targeting systemically significant digital enterprises (SSDEs) along with a rebuttal mechanism allowing companies to contest their designation.
The committee further noted that the ministry of corporate affairs, in its written reply, remained silent on designing a system that ensures data access for smaller businesses, enabling them to compete effectively against large digital enterprises that control vast amounts of data. “Practices like predatory pricing and deep discounting by major online platforms pose a direct threat to small retailers,” it said.
The panel flagged a major enforcement challenge at the CCI. Out of a total penalty imposed (Rs 20,350.46 crore) till April 2025, a substantial amount (Rs 18,512.28 crore) has been either stayed or dismissed by appellate courts. This makes the remaining amount of Rs 1,838.19 crore “realizable,” of which the CCI has realised Rs 1,823.57 crore.