Team Code: SHERLOCK

IN THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL

UNDER § 410 OF THE COMPANIES ACT, 2013 READ WITH § 53A OF THE

COMPETITION ACT, 2002

ULTRON AND VISION …Appellants

versus

COMPETITION COMMISSION OF KRAKOA …Respondent

~ MEMORANDUM FILED ON BEHALF OF RESPONDENT ~

 TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................................................. I

LIST OF ABBREVIATIONS ....................................................................................................... IV

INDEX OF AUTHORITIES ......................................................................................................... VI

STATUTES ........................................................................................................................... VI

CASES .................................................................................................................................. VI

OTHER AUTHORITIES ................................................................................................... VIII

BOOKS ................................................................................................................................. IX

REPORTS ............................................................................................................................. IX

STATEMENT OF JURISDICTION .............................................................................................. X

STATEMENT OF FACTS ........................................................................................................... XI

ISSUES FOR CONSIDERATION ............................................................................................ XIII

SUMMARY OF ARGUMENTS ............................................................................................... XIV

ARGUMENTS ADVANCED ........................................................................................................ 1

I. WHETHER THE CCK HAS POWER TO INITIATE AN INQUIRY IN RELATION TO

VISION/DOOM COMBINATION AFTER EXPIRY OF ONE YEAR FROM THE DATE ON

WHICH THE COMBINATION WAS CONSUMMATED? ..................................................... 1

I
 I.1 IT IS IN CONSONANCE WITH SECTION 20(1) OF THE ACT, READ WITH

REGULATION 8 OF MERGER REGULATIONS. .............................................................. 1

I.2 ONE YEAR TIME REQUIREMENT PROVIDED IN SECTION 20(1) OF THE ACT IS

A MERE TECHNICAL COMPLIANCE. .............................................................................. 3

II. WHETHER THE UNAVAILABILITY OF ACCURATE DATA DUE TO HOSTILE

NATURE OF TAKEOVER, BE A DEFENCE AGAINST NON-FURNISHING OF

INFORMATION UNDER SECTION 43-A OF THE ACT, IN RELATION TO

ULTRON/STARK TECH TRANSACTION? ............................................................................ 5

II.1 THAT THE ACTIONS OF ULTRON VIA VISION AMOUNTED TO PROCEDURAL

GUN JUMPING IN VIEW OF THE FACT THAT THE AFORESAID TRANSACTION

DOES NOT FALL UNDER THE DE MINIMS EXEMPTION PROVIDED IN THE ACT. 5

II.2 THAT UNAVAILABILITY OF DATA VIS A VIS HOSTILE TAKEOVER CANNOT

BE DEFENSE TO CCI’S NOTIFICATION REQUIREMENTS. ......................................... 7

II.3 THAT OFFSHORE COMBINATIONS ARE NOT EXEMPT FROM THE

NOTIFICATION REQUIREMENT OF THE ACT. .............................................................. 8

II.4 THAT THE AFORESAID TAKEOVER CAUSES AAEC WHICH MAKES IT

NOTIFIABLE UNDER THE ACT. ....................................................................................... 9

III. WHETHER CCK WAS CORRECT IN DEFINING THE RELEVANT MARKET FOR

ASSESSMENT AS “MARKET FOR PROVISION OF SOFTWARE AND SOLUTIONS FOR

ONLINE EDUCATION PLATFROM”? ................................................................................. 11

III.1 THAT THE SUBSTITUTABILITY TEST IS BEING SATISFIED FOR THE

CONCERNED CONSUMER INDUSTRY. ......................................................................... 11

II
 III.2 THAT THE SSNIP TEST IS BEING FULFILLED MAKING THE TWO COMPANIES

A PART OF SIMILAR RELEVANT MARKETS............................................................... 12

III.3 THAT EVEN IF THE MODE OF OPERATION OF BOTH THE MARKETS ARE

DISTINCT THEY FORM A PART OF THE SAME RELEVANT MARKET. ................. 13

IV. WHETHER THE CCK’S PRIMA FACIE VIEW THAT IMPUGNED COMBINATION

IS LIKELY TO DISTORT COMPETITION DUE TO VERTICAL OVERLAPS, CORRECT?

…………………………………………………………………………………………15

IV.1 THERE EXISTED VERTICAL OVERLAP BETWEEN THE PARTIES TO THE

COMBINATION. ................................................................................................................. 15

IV.2 THE ACQUISITION OF SHARES BY VISION IN DOOM DOESN’T COME

WITHIN THE AMBIT OF SCHEDULE 1 EXEMPTION. ................................................. 16

IV.3 THE CCK ONLY FORMED A PRIMA FACIE VIEW AND THE COMBINATION

CAUSES APPRECIABLE ADVERSE EFFECT ON COMPETITION.............................. 18

V.1 THAT THE COMBINED ENTITY WILL BE DOMINANT IN THE MARKET FOR

ED-TECH SOFTWARE AND SOLUTIONS. ..................................................................... 20

V.2 THE COMBINATION WILL RESULT IN LESSENING OF COMPETITION

THROUGH COORDINATED INTERACTION. ................................................................ 22

V.3 BEHAVIOURAL REMEDIES WON’T BE SUFFICIENT TO ALLEVIATE THE

COMPETITIVE CONCERNS RAISED. ............................................................................. 23

PRAYER .................................................................................................................................... XVI

III
 LIST OF ABBREVIATIONS

ABBREVIATION DESCRIPTION

& And

§ Section

¶ Paragraph

AAEC Appreciable Adverse Effect on Competition

AIR All India Reporter

Anr. Another

Assoc. Association

CCI Competition Commission of India

CCK Competition Commission of Krakoa

CMLR Common Market Law Review

Co. Company

Comp LR Competition Law Reports

COMPAT Competition Appellate Tribunal

DG Director General

EC European Commission

ECJ European Court of Justice

ECR European Court Reports

Reg. Registration

IV
ICC Integrated Circuit Chip

KMP Key Managerial Position

Ed. Edition

EU European Union

Hon’ble Honourable

Ibid Ibidem

Inc. Incorporated

IT Information Technology

Ltd. Limited

M/s Messieurs

No. Number

JV Joint Venture

NFTC Nidavellir Federal Trade Commission

CSC Car Smart Chip

Ors. Others

Pvt. Private

UHF Ultra High Frequency

SC Supreme Court of India

SCC Supreme Court Cases

v. Versus

V
 INDEX OF AUTHORITIES

STATUTES

The Competition Act, 2002.

NOTIFICATIONS

The Competition Commission of India (Procedure in regard to the transaction of business

relating to combinations) Regulations, No. 3, 2011.

CASES

Confederation Of All India Traders & Ors. vs Competition Commission of India, Competition

Appeal (AT) No.1 of 2022, Combination Reg. No. C-2019/09/688. ......................................... 1

Radha Krishna Rai v. Allahabad Bank & Ors., (2000) 9 SCC 733 .............................................. 5

Scm Solifert Ltd. v. Competition Commission of India, 2018 SCC ONLINE SC 417 .................. 7

Notice given by Etihad Airways PJS and Jet Airways (India) Limited, Combination Reg. No. C
2013/05/122……………………………………………………………………………………….7

Notice given by Hindustan Colas Private Limited, Combination Reg. No.

2015/08/299….................................................................................................................................7

Order passed by Competition Commission of India against Veolia Environment S.A under
Section 43A of the Competition Act, 2002, 17th May 2022………………………………………8

Order under Section 43A of the Competition Act, 2002 against Avago Technologies Limited

Combination Reg. No. C-2015/09/312…………………………………………………………….8

Tata Chemicals Limited/Wyoming case, Combination Reg. No. C 2011/12/12… ........................ 9

Tetra Laval/Alfa Laval case Combination Reg. No. C-

2012/02/40……………………………………………………………………………………….10

Termination of Proceedings in the matter of notice u/s 6 (2) of the Competition Act, 2002,

Combination Reg. No. C-2013/06/124. ........................................................................................ 10

VI
Haridas Exports v. All India Float Glass Manufactures Association, (2002) 6 SCC 600………..10

Board of Trade of the City of Chicago v. United States, 246 U.S. 231 (1918)…………………..11

Ashish Ahuja v. Snapdeal, Order under section 26(2) of the Competition Act, 2002, Case No. 17

of 2014…………………………………………………………...……………………………12

RIL/Den/Hathway case, Order under Section 31(1) of the Competition Act, 2002, Combination

Reg. No. C-2018/10/609………………………………………………………………………12

Adani Gas Limited v. Competition Commission of India, TA (AT) (Competition) No. 34 of

2017…………………………………………………..……………………………………….12

Bishop & Darcey (1995).. ............................................................................................................. 13

United States v. E.I. du Pont de Nemours & Co., 366 U.S. 316 (1961)…………………………13

All India Online Vendor’s Association v Flipkart, Competition Commission of India, Case No. 20

of 2018.HNG Glass v Gobain [2012] 109 BLA 137 (CCI). ..................................................... 14

Notice under Section 6 (2) of the Competition Act, 2002 given by MIH Internet SEA Pte Ltd,

Combination Reg. No. C-2016/10/451………………………………………………………...14

Ashish Ahuja v Snapdeal, Order under section 26(2) of the Competition Act, 2002, Case No. 17

of 2014…………………………………………………………………………………...……14

Notice filed by EMC Ltd. under Section 6 (2) of the Competition Act, 2002, Combination Reg.

No. C-2015/07/293. .................................................................................................................. 16

Notice filed by New Moon BV under section 6(2) of the Competition Act, 2002, Combination

Reg. No. C-2014/08/202……………………………………………………...……………….16

Google and Alphabet v. Commission (Google Shopping), Case T-612/17. ................................. 17

Delhi Jal Board Vs. Grasim Industries Ltd. & others, Ref. Case No. 04/2013 & Ref. Case No.

03/2013. .................................................................................................................................... 18

VII
Competition Commission of India vs Steel Authority of India & Anr (2010) 10 SCC 744……..18

Asianet Digital Network (P) Ltd v. Star India Private Limited, Case No. 9 of 2022 (CCI)……...19

Notice under Section 6(2) of the Competition Act, 2002 jointly given by Dow Chemical Company

& ors., Combination Reg. No. C-2016/05/400………...………………………………………20

Notice under Section 6(2) of the Act given by Schneider Electric India Pvt. Ltd & ors.,

Combination Reg. No. C-2018/07/586 ..................................................................................... 22

Cementbouw Handel & Industrie BV v. Commission of European Communities, Case T-

282/02,[2006] ECR II-319, paragraph 307. .............................................................................. 23

Notice under Section 6 (2) of the Competition Act, 2002 given by Agrium Inc. and Potash

Corporation of Saskatchewan, Inc. Combination Reg. No. C-2016/10/443 ............................. 23

Notice under Section 6 (2) of the Competition Act, 2002 given by China National Agrochemical

Corporation, Combination Reg. No. C-2016/08/424. ............................................................... 24

ARTICLES

Praveen Raju and Janhavi Joshi, India: Gun Jumping Under Merger Control Regime, Mondaq

(2022)……………………………………………………………………………………………6

Rajat Maloo, Competition Regulatory Frameworks Governing Hostile Takeovers in India,

IndiaCorpLaw (2020)……………………………………………………………………………8

By The Secretariat, Start-ups, Killer Acquisitions and Merger Control, DAF/COMP (2020)

5………………………………………………………………………………………………..19

2020 Merger Remedies Manual………………………………………………………………..23

International Competition Network (Icn) Merger Working Group, Merger Remedies Guide,

(2016)………………………………………………………………………………………......24

VIII
 Naini Thaker, Naandika Tripathi, In a Byju-Unacademy World what will the small players Do?,

Forbes India…………………………………………………………………………………....24

Thomas Wilson (Kirkland & Ellis, Belgium), Merger Remedies- Is it Time to go more

Behavioural?, Kluwer Competition Law Blog………………………………………………....25

BOOKS

Abir Roy, Competition Law in India, Eastern Law House, Edn II ................................................. 6

John Black , Nigar Hashimzade , and Gareth Myles, A dictionary of Economics (3 ed. 2016). .. 20

Jonathan Faull & Ali Nikpay, The Eu Law Of Competition, 48 1.148, (3rd ed. 2014) ................ 14

PWS Andrews and FA Friday: Fair Trade, Resale Price Maintenance Re-examined, MacPillan

(6th ed. 2018) ............................................................................................................................. 16

Richard Wish, David Bailey, Competition Law (7th ed. 2008) ..................................................... 10

SM Dugar, Guide to Competition Law, (6th ed. 2016) ................................................................... 7

REPORTS

Report of Competition Law Review Committee 2019, Ministry of Corporate Affairs, GoI ......... 7

Report on Competition and Barriers to Entry by OECD .............................................................. 11

IX
 STATEMENT OF JURISDICTION

The appellants have approached the National Company Law Appellate Tribunal under § 410 of

the Companies act, 2013 read with § 53a of the Competition Act, 2002 which read as:

Section 410 - Constitution of Appellate tribunal -

The Central Government shall, by notification, constitute, with effect from such date as may be

specified therein, an Appellate Tribunal to be known as the National Company Law Appellate

Tribunal consisting of a chairperson and such number of Judicial and Technical Members, 1***,

as the Central Government may deem fit, to be appointed by it by notification, 2[for hearing

appeals against--

(a) the orders of the Tribunal or of the National Financial Reporting Authority under this Act;

(b) any direction, decision or order referred to in section 53A of the Competition Act, 2002 (12

of 2002) in accordance with the provisions of that Act].

53A - Appellate Tribunal -

The National Company Law Appellate Tribunal constituted under section 410 of the Companies

Act, 2013 ( 18 of 2013) shall, on and from the commencement of Part XIV of Chapter VI of the

Finance Act, 2017 (7 of 2017), be the Appellate Tribunal for the purposes of this Act and the

said Appellate Tribunal shall— (a) hear and dispose of appeals against any direction issued or

decision made or order passed by the Commission under sub-sections (2) and (6) of section 26,

section 27, section 28, section 31, section 32, section 33, section 38, section 39, section 43,

section 43A, section 44, section 45 or section 46 of this Act;

53B. (1) The Central Government or the State Government or a local authority or enterprise or

any person, aggrieved by any direction, decision or order referred to in clause (a) of section

53A may prefer an appeal to the Appellate Tribunal.

X
 STATEMENT OF FACTS

1. The Sovereign Republic of Krakoa is an Asian country, whose laws are in pari-materia with

the laws of India. Krakoa, with the world’s largest population of individuals under the age of

30, is seen as a goldmine for the growing market for Edu-Business, not just for providing

tutoring to students and for teaching aids like notes and smart learning technologies.

2. Vision Private Limited (“Vision”), incorporated in 2011 as a private limited company that

provides educational services for primary and secondary school curriculum and further studies

along with study material and resources. Ultron Inc. headquartered in United States of Aralia

acquired a majority stake and 3/4th representation on the board of directors of Vision.

3. Stark Tech Inc. is a public listed company, engaged in the business of providing advanced

technology and software solutions, headquartered in USA. It incorporated a wholly owned

subsidiary named Stark Ed Krakoa Pvt. Ltd. which is engaged in business of developing

software and digital online teaching tools for educational institute.

4. DOOM Pvt. Ltd. is another company, incorporated in Krakoa, that engages in business of

providing video transmission and streaming services to support various business activities.

15% and 11% stake in DOOM were acquired by Stark Ed and Ultron(via Vision) respectively.

5. Vision did not notify the acquisition to the CCK and consummated the acquisition on 19

February 2021. On 11 March 2021, the CCK issued a Show Cause Notice (SCN) to Vision,

Vision responded that combination came under exceptions and was therefore, not notifiable,

CCK didn’t interfere further.

6. In September 2021 due to imposition of lockdown educational institutions had to function

virtually, Vision that started its online educational platform in May 2021 and established a

market share of 20%. Stark Tech launched a new product, Jarvis; an AI-based personalization
XI
 technology (running on Stark Tech’s patented software) that was a disruptive technology that

no other international company was able to develop.

7. On 4 April 2022, Ultron started the process of hostile takeover of ‘Stark Tech’ in USA and

acquired 27% shareholding in Stark Tech from its existing shareholder Rhodes (“Rhodes Block

Transaction), subsequently, made a public offer for the remaining shares. Thus, Ultron

completed the hostile takeover of Stark Tech.

8. There was an indirect effect in Krakoa but it was not notified to CCK for its approval. After

receiving information about the transaction from Stark Ed. While analysing the takeover, CCK

took the prima facie view that the acquisition of 11% shares in DOOM is a combination and

no exemption was available to Vision/Ultron and thus notification was mandatory. The CCK

issued a Show cause notice to Vision to explain the above conduct.

9. The CCK in Show Cause Notice addressed to Vision and Ultron sought response on transaction

related to acquisition of 27% shares of Stark Tech.

10. CCK after hearing the parties held that, investment by Vision in Doom can’t be considered

solely for investment as it already had plans of launching the online platform, thus potential

vertical overlaps were present.

11. The CCK directed that Stark Ed and Ed-tech business of Vision shall continue to operate as

separate, independent and competitive entities and on an arm’s length basis and imposed a

penalty of KNR Seventy-Five Crores and One crore each under Section 44 and 45 of the Act,

on Ultron.

12. Aggrieved by such decision, Ultron and Vision preferred an appeal before NCLAT which is

listed for final hearing.

XII
 ISSUES FOR CONSIDERATION

THE FOLLOWING ISSUES HAVE BEEN FRAMED FOR THE ARGUMENT BEFORE THE

NATIONAL COMPANY LAW APPELLATE TRIBUNAL:

I. WHETHER THE CCK HAS POWER TO INITIATE AN INQUIRY IN RELATION TO

VISION/DOOM COMBINATION AFTER EXPIRY OF ONE YEAR FROM THE DATE

ON WHICH THE COMBINATION WAS CONSUMMATED?

II. WHETHER THE UNAVAILABILITY OF ACCURATE DATA DUE TO HOSTILE

NATURE OF TAKEOVER, BE A DEFENCE AGAINST NON-FURNISHING OF

INFORMATION UNDER SECTION 43-A OF THE ACT, IN RELATION TO

ULTRON/STARK TECH TRANSACTION?

III. WHETHER CCK WAS CORRECT IN DEFINING THE RELEVANT MARKET FOR

ASSESSMENT AS “MARKET FOR PROVISION OF SOFTWARE AND SOLUTIONS

FOR ONLINE EDUCATION PLATFROM”?

IV. WHETHER THE CCK’S PRIMA FACIE VIEW THAT IMPUGNED COMBINATION

IS LIKELY TO DISTORT COMPETITION DUE TO VERTICAL OVERLAPS,

CORRECT?

V. WHETHER THE MODIFICATIONS AS SUGGESTED BY CCI, WERE NECESSARY

TO ALLEVIATE THE COMPETITIVE CONCERNS ARISING OUT OF

COMBINATION OR CAN THE CONCERNS BE ALLEVIATED BY WAY OF

BEHAVIOURAL REMEDIES?

XIII
 SUMMARY OF ARGUMENTS

I. WHETHER THE CCK HAS POWER TO INITIATE AN INQUIRY IN RELATION TO

VISION/DOOM COMBINATION AFTER EXPIRY OF ONE YEAR FROM THE DATE

ON WHICH THE COMBINATION WAS CONSUMMATED?

It is humbly submitted that the CCK has the power to initiate the inquiry after expiry of one

year from the date on which Vision/doom transaction was consummated on the grounds that,

firstly, It is in consonance with section 20(1) of the Act, read with regulation 8 of Merger

regulations and secondly, that the one year time requirement provided in section 20(1) of the

Act is a mere technical compliance.

II. WHETHER THE UNAVAILABILITY OF ACCURATE DATA DUE TO HOSTILE

NATURE OF TAKEOVER, BE A DEFENCE AGAINST NON-FURNISHING OF

INFORMATION UNDER SECTION 43-A OF THE ACT, IN RELATION TO

ULTRON/STARK TECH TRANSACTION?

It is humbly submitted that, unavailability of accurate data cannot act as a defense against non-

furnishing of information on the grounds that, firstly, That the actions of Ultron amounted to

procedural gun jumping in view of the fact that the aforesaid transaction does not fall under

the de minims exemption provided in the Act, secondly, That unavailability of data vis a vis

hostile takeover cannot be defense to CCI’s notification requirements, and lastly, That the

aforesaid takeover could have led to AAEC.

III. WHETHER CCK WAS CORRECT IN DEFINING THE RELEVANT MARKET FOR

ASSESSMENT AS “MARKET FOR PROVISION OF SOFTWARE AND SOLUTIONS

FOR ONLINE EDUCATION PLATFROM”?

XIV
 It is humbly submitted that, the CCK was correct in defining the relevant market on the

grounds that, firstly, that the substitutability test is being satisfied for the concerned consumer

industry, secondly, that the SSNIP test is being fulfilled making the two companies a part of

similar relevant markets, and lastly, that even if the mode of operation of both the markets are

distinct, they form a part of the same relevant market.

IV. WHETHER THE CCK’S PRIMA FACIE VIEW THAT IMPUGNED COMBINATION

IS LIKELY TO DISTORT COMPETITION DUE TO VERTICAL OVERLAPS,

CORRECT?

It is humbly submitted that the prima facie view of the CCK is correct on the grounds that,

firstly there existed vertical overlap between the parties to the combination, secondly, that the

acquisition of shares by Vision in Doom doesn’t come within the ambit of Schedule 1

exemption and lastly, that the CCK only formed a prima facie view and the combination causes

Appreciable Adverse Effect on Competition.

V. WHETHER THE MODIFICATIONS AS SUGGESTED BY CCI, WERE NECESSARY

TO ALLEVIATE THE COMPETITIVE CONCERNS ARISING OUT OF

COMBINATION OR CAN THE CONCERNS BE ALLEVIATED BY WAY OF

BEHAVIOURAL REMEDIES?

It is humbly submitted that the modifications suggested by CCK were necessary to alleviate

the competitive concerns arising out of combination, firstly, that the combined entity will be

dominant in the market for Ed-tech software and solutions, secondly, the combination will

result in lessening of competition through coordinated interaction, and lastly, behavioural

remedies won’t be sufficient to alleviate the competitive concerns raised .

XV
 ARGUMENTS ADVANCED

I. WHETHER THE CCK HAS POWER TO INITIATE AN INQUIRY IN RELATION

TO VISION/DOOM COMBINATION AFTER EXPIRY OF ONE YEAR FROM THE

DATE ON WHICH THE COMBINATION WAS CONSUMMATED?

It is most humbly submitted that the CCK has the power to initiate the inquiry after expiry of

one year from the date on which Vision/doom transaction was consummated on the grounds

that, firstly, It is in consonance with section 20(1) of the Act, read with regulation 8 of Merger

regulations (I.1)and secondly, that the one Year time requirement provided in section 20(1) of

the Act is a mere technical compliance(I.2).

I.1 IT IS IN CONSONANCE WITH SECTION 20(1) OF THE ACT, READ WITH

REGULATION 8 OF MERGER REGULATIONS.

I.1.1 The Section 20(1) of the Act1 reads as “The Commission may, upon its own knowledge

or information relating to acquisition referred to in clause (a) of section 5 or acquiring of

control referred to in clause (b) of section 5 or merger or amalgamation referred to in clause

(c) of that section, inquire into whether such a combination has caused or is likely to cause an

appreciable adverse effect on competition in India:

Provided that the Commission shall not initiate any inquiry under this sub-section after the

expiry of one year from the date on which such combination has taken effect.”2

1
The Competition, Act 2002, § 20(1), No. 12, Acts of Parliament, 2003 (India).
2
Ibid.
1
I.1.2 Regulation (8) of the combination regulations3 provides “Where the parties to a

combination fail to file notice under sub-section (2) of section 6 of the Act, the Commission may

under sub-section (1) of section 20 of the Act, upon its own knowledge or information relating

to such combination, inquire into whether such a combination has caused or is likely to cause an

appreciable adverse effect on competition within India.”4, Parties to the combination Under

Section 5 of the Act are required to notify the same to the CCK under Section 6 of the Act.

I.1.3 In the case of Amazon.com NV Investment Holdings LLC5, the CCI held that it will not be

bound by any limitation period or restriction whatsoever from reopening a case and suspending

its merger clearance in case of misrepresentation or concealment of material facts. 6

I.1.4 It is humbly submitted that in the instant case Ultron via Vision acquired a 11% share in

DOOM but did not notify the same to the commission and claimed benefit under Schedule I of

the Combination regulations as there were no vertical or horizontal overlaps present between its

business activities and those of DOOM and therefore benefitted from exemption under schedule

I of the combination Regulation7 and that the transaction was solely done for investment

purposes.

3
The Competition Commission of India (Procedure in regard to the transaction of business
relating to combinations) Regulations, § 8, No. 3, 2011.
4
Ibid.
5
Confederation of All India v. Competition Commission of India, Competition Appeal (AT)
No.1 of 2022.
6
Ibid.
7
The Competition Commission of India (Procedure in regard to the transaction of business
relating to combinations) Regulations, 2011, Schedule I, No. 3, 2011.

2
 I.1.5 Vision also entered into a new line of business of supplying ED-tech software solutions and

started working on developing a new Learning Management and its own mobile learning app to

bring its education platform online.8

I.1.6 DOOM provides a video transmission service named “Flash”, which could act as an input

for Vision evidencing the existence of a vertical relationship between DOOM and Vision.

I.1.11 It is therefore humbly submitted that the reply in Show cause notice by Vision was

incomplete and it did not disclose about the upcoming online education services Vision was

going to launch, the contention by the Vision that there existed no Horizonal or Vertical

relationship between the business activities of Vision and DOOM and the said combination is

exempted under Schedule I of the Combination regulations9 is wrong and misplaced.

I.1.12 No fresh inquiry into Vision-Doom transaction has been but it is a case of mere reopening

of investigation due to concealment of facts by the Vision, and Section 20(1) of the Act10 read

with regulation 8 of Combination regulations gives power to the CCK to inquire into

combinations, and in the cases where concealment of facts is involved, the Commission while

deciding such cases has put aside the time bar highlighted in Section 20(1) of the Act.

I.1.13 Therefore it is humbly contended that, in the present case the CCK is empowered to inquire

about Vision/DOOM transaction even after one year from the date on which it was

consummated, as it is a mere reopening of the case.

I.2 ONE YEAR TIME REQUIREMENT PROVIDED IN SECTION 20(1) OF THE ACT

IS A MERE TECHNICAL COMPLIANCE.

8
Moot Proposition, ¶.4.
9
The Competition Commission of India (Procedure in regard to the transaction of business
relating to combinations) Regulations, 2011, § 8, No. 3, 2011.
10
The Competition, Act 2002, § 20(1), No. 12, Acts of Parliament, 2003 (India).
3
I.2.1 It is humbly submitted before the tribunal that the time limitation is a procedural

requirement that restricts the Competition Commission of Krakoa (CCK) to initiate an

investigation into a potential violation of the competition law within one year of the occurrence

of the alleged violation.

I.2.2 However, in exceptional cases, the CCK can override this time limitation in the interest of

promoting fair competition and protecting the interests of consumers, if it is established that the

violation has had a lasting impact on the market and is likely to continue in the future. Cases

when there is a complex investigation that requires more time or when the impact of the anti-

competitive practice is far-reaching and long-lasting. In such cases, the Competition

Commission of Krakoa (CCK) has the power to extend the time limit to complete the

investigation.

I.2.3 In the case of Radha Krishna Rai v. Allahabad Bank 11, it was held that delay can be

condoned if sufficient cause is shown. Therefore, the application made under Section 5 of the

Limitation Act, 1963 was accepted.

I.2.4 It is therefore humbly submitted that in the present case due to absence of fair, forthright

and full disclosure of the material facts on the basis of which the CCK decided not to interfere

into the combination, if the disclosure was honest, the combination would have raised serious

anti-competitve concerns in Krakoa’s online education Market. Thus, the CCK can override this

limitation in the interest of the market and objectives of the Act and can investigate into the

combination even after expiry of one year time limitation.

11
Radha Krishna Rai v. Allahabad Bank, 2000 SCC 9 733.
4
II. WHETHER THE UNAVAILABILITY OF ACCURATE DATA DUE TO HOSTILE

NATURE OF TAKEOVER, BE A DEFENCE AGAINST NON-FURNISHING OF

INFORMATION UNDER SECTION 43-A OF THE ACT, IN RELATION TO

ULTRON/STARK TECH TRANSACTION?

It is humbly submitted that, unavailability of accurate data due to hostile nature of takeover

cannot act as a defense against non-furnishing of information under Section 43A of the

Competition Act, 2002 on the grounds that, firstly, That the actions of Ultron amounted to

procedural gun jumping in view of the fact that the aforesaid transaction does not fall under the

de minims exemption provided in the Act (II.1), secondly, That unavailability of data vis a vis

hostile takeover cannot be defense to CCI’s notification requirements (II.2), and lastly, That the

aforesaid takeover could have led to AAEC (II.3).

II.1 THAT THE ACTIONS OF ULTRON VIA VISION AMOUNTED TO PROCEDURAL

GUN JUMPING IN VIEW OF THE FACT THAT THE AFORESAID TRANSACTION

DOES NOT FALL UNDER THE DE MINIMS EXEMPTION PROVIDED IN THE ACT.

II.1.1 A transaction falls within the ambit of gun jumping when it was notifiable but had been

consummated and subsequent steps have been taken by the parties for future integration.12 In

Jet-Etihad combination, wherein Etihad sought CCI approval on 24% equity interest in the

transaction, the CCI noted that certain aspects of commercial cooperation agreement had come

into force and certain landing at the London Heathrow Airport had not been notified to the CCI.

The CCI concluded the sale to be a consummation of the transaction and imposed penalty.

12
Notice given by Etihad Airways PJS and Jet Airways (India) Limited, Combination Reg. No.
C-2013/05/122.
5
 II.1.2 In the case of Consumers Guidance Society v. Hindustan Coca Cola Beverages,13 it was

held that a decision on gun jumping includes within its ambit an assessment of ‘potential

competition distortions’ by the parties during the process of consummation of the transaction. In

this context, it is submitted that in SCM Solifert Ltd v. Competition Commission of India, the

CCI observed the acquisition of shares of MFCL as not being a part of ordinary course of

business hence notifiable under the Act.14 Moreover, In the case of Piramal Enterprises v.

Competition Commission of India15 the parties were held liable for gun jumping in light of the

fact that the transaction crossed the threshold provided in the Act.

II.1.3 Therefore, it is humbly submitted that, as per the Act, a combination is exempt from the

requirement of notification if it falls within the threshold of De Minimis Exemption. As per this

threshold, the value of the assets and turnover of the target must not exceed 3.5 Billion Rupees

and 10 Billion Rupees respectively.

II.1.4 Hence, it is concluded that in the instant case, as per the financial statements produced by

Start Tech the asset valuation of Start Ed (inclusive of Pepper Pots) for financial year ending 31

March, 2022 was KNR 620 Crores and the turnover was KNR 1008 which crosses the de minimis

exemption substantially. In addition to this, it is contended that steps towards the consummation

of the transaction which included Ultron’s successful attempt at the hostile takeover of Start

Tech which led it to acquire 27% shareholding in Start Tech from its existing shareholder Rhodes

Block were taken without notifying the CCK.16

13
Notice given by Hindustan Colas Private Limited Combination Reg. No. C-2015/08/299.
14
SCM Solifert Ltd. v. Competition Commission of India, 2018 SCC ONLINE SC 417.
15
Piramal Enterprises v. Competition Commission of India, Combination Registration No. C-
2015/02/249
16
Page. 5 Moot Problem.

6
 II.2 THAT UNAVAILABILITY OF DATA VIS A VIS HOSTILE TAKEOVER CANNOT

BE DEFENSE TO CCI’S NOTIFICATION REQUIREMENTS.

II.2.1 A takeover is said to be of hostile nature when the target company is being acquired without

its consent and the acquirer seeks to acquire as much shares as possible in the target before

drawing the attention of the regulators.17

II.2.2 In the case of Veolia-Suez Takeover, on a similar factual matrix, wherein Veolia

contended that it was under a bona fide belief that its takeover of Suez is not a notifiable

combination on the basis that it did not possess the accurate data related to the said combination.

However, it was concluded by the commission that an enterprise cannot be exempted from the

notification requirements under the Act merely on the grounds that it did not possess the

necessary data.18 Similarly, in the case of Avago Technologies Ltd19 wherein the parties

miscalculated the assets and turnover and on the basis of which assumed itself to be eligible for

target exemption, the CCI held the miscalculation to be not a defense against non-notification

and imposed a penalty under Section 43A of the Act.

II.2.3 It is the submission of the appellant that, the Competition Commission of India

Regulations, 2011 does not mandate the acquirer to present all the information related to the

takeover. The acquirer is allowed to furnish only that information which is available to it.20

17
Rajat Maloo, Competition Regulatory Frameworks Governing Hostile Takeovers in India,
IndiaCorpLaw (2020).
18
Order passed by Competition Commission of India against Veolia Environment S.A under
Section 43A of the Competition Act, 2002, 17th May 2022.
19
Order under Section 43A of the Competition Act, 2002 against Avago Technologies Limited
Combination Reg. No. C-2015/09/312.
20
The Competition Commission of India (Procedure in regard to the transaction of business
relating to combinations) Regulations, 2011, §9, No. 3, 2011.
7
II.2.5 It is humbly submitted that, in the instant case, publicly available financial statements and

information in respect to Start Tech and its subsidiaries were accessible to Ultron. Hence, in light

of the above stated, it is contended that Ultron must have submitted all the information available

to it to the CCK. Non-availability of data must not act as a defense against non-furnishing of

information under the Act.21

II.3 THAT OFFSHORE COMBINATIONS ARE NOT EXEMPT FROM THE

NOTIFICATION REQUIREMENT OF THE ACT.

II.3.1 As per the Indian approach of analyzing combinations, even those transactions which have

a negligible impact on competition in India are generally not exempt from notification

requirement of the Act22 after deletion of the exemption from Schedule I which gave the parties

a choice to not notify transactions having negligible impact in India.

II.3.2 A combination cannot be exempt from the inquiry of CCI if such combination has or likely

to have Adverse Effect on Competition in the Relevant Market in India on the sole basis that

such transaction has taken place outside India or that any party to the combination is outside

India.23

II.3.3 Testing the scope of offshore exemption in Tata Chemicals Limited/Wyoming I24 wherein

the party claimed the benefit of offshore exemption on the basis that the transaction was an

‘entirely outbound stream of acquisition’ by the holding company, the CCI held that since the

21
Moot Proposition, ¶.33.
22
Abir Roy, Competition law in India: a practical guide (Kluwer Law International, 2nd ed.
2016).
23
The Competition, Act 2002, No. 12, Acts of Parliament, 2003 (India).
24
Tata Chemicals Limited/Wyoming, Combination Reg. No. C 2011/12/12.

8
transaction breached the notification threshold limit in India and one of the parties to the

concerned merger being located in India, such an exemption cannot be granted.

II.3.4 Further, in Tetra Laval/Alfa Laval25, it was concluded by the CCI that in case the target

enterprise has a direct/indirect presence in the relevant market of India through its subsidiaries

and it crosses the jurisdiction threshold provided under the Act, it must be notified to the CCI.

II.3.5 It is humbly submitted that in the instant case, the transaction was consummated in USA,

but due to presence of subsidiaries of Stark Tech and Ultron in Krakoan territory, it had indirect

effect on market and competition in Krakoa. Further, the takeover resulted in horizontal as well

as vertical overlap as the Krakoan entities were present in the upstream and downstream markets

for delivering online education and held significant market shares in these markets.26 Therefore,

the takeover had significant local nexus and was thus mandatorily required to be notified to the

CCK under the Section 6(2) of the Act.

II.3.6 In arguendo, even if there didn’t exist any significant nexus or effect on the competition

in Krakoa, even then the same had to be notified to the CCK if the subsidiaries crossed the de-

minimis exemption requirement as was held by the CCI in the case Temasek/DBS Group

Holdings27, where even though the transaction wasn’t consummated, the CCI imposed a penalty

for not notifying the combination because the threshold level for revenue and turnover was

crossed.

II.4 THAT THE AFORESAID TAKEOVER CAUSES AAEC WHICH MAKES IT

NOTIFIABLE UNDER THE ACT.

25
Tetra Laval/Alfa Laval, Combination Reg. No. C-2012/02/40.
26
Moot Proposition, ¶.6.
27
Termination of Proceedings in the matter of notice u/s 6 (2) of the Competition Act, 2002,
Combination Reg. No. C-2013/06/124.
9
II.4.1 It is submitted that, those combinations which causes or are likely to cause AAEC are

prohibited under section 3 of the Act.28 ‘Adverse Effects on Competition’ includes within its

ambit those acts, transactions or combinations which act to the disadvantage of the general public

by limiting the competition. The determination of AAEC is pre-dominantly based on the

consideration of public interest rather than the industrial interest.29

II.4.2 In Board of Trade of the City of Chicago v. United States30, it was held that an analysis of

AAEC requires an examination of business conditions before and after the imposition of restrain

and the actual or probable effects of such combination to the competition prevalent in the

relevant market of that product. In Mahindra-CIE combination, the CCI analyzed the presence

of AAEC on the combination on the basis of factors such as whether the proposed combination

is between the existing players in the market and CIE’s relation to the business proposed to be

acquired in the proposed combination.

II.4.3 Therefore, it is humbly submitted that, the aforesaid takeover would lead to combination

of two significant competitors resulting in heavy market concentration. This would adversely

affect public interest on the basis that it will result in substantial lessening of competitive

constraints in the markets of Vision and Start Ed’s operation. Hence, the present combination is

likely to result in AAEC which makes it mandatorily notifiable as per the provisions of the Act.

28
The Competition, Act 2002, § 3, No. 12, Acts of Parliament, 2003 (India).
29
Haridas Exports v. All India Float Glass Manufactures Association, (2002) 6 SCC 600.
30
Board of Trade of the City of Chicago v. United States, 246 U.S. 231 (1918).
10
III. WHETHER CCK WAS CORRECT IN DEFINING THE RELEVANT MARKET FOR

ASSESSMENT AS “MARKET FOR PROVISION OF SOFTWARE AND SOLUTIONS

FOR ONLINE EDUCATION PLATFROM”?

It is humbly submitted that, the CCK was correct in defining the relevant market as ‘market

for provision of software and solutions for online education on the grounds that, firstly, that the

substitutability test is being satisfied for the concerned consumer industry(III.1, secondly, that the

SSNIP test is being fulfilled making the two companies a part of similar relevant markets (III.2)

and lastly, That even if the mode of operation of both the markets are distinct, they form a part of

the same relevant market.(III.3)

III.1 THAT THE SUBSTITUTABILITY TEST IS BEING SATISFIED FOR THE

CONCERNED CONSUMER INDUSTRY.

II.1.1 To define relevant product market, the CCK has to take into consideration the

interchangeability or substitutability of the concerns products/services by the consumers.

III.1.2 It is submitted that; any two products are considered to be a part of the same relevant market

if the consumers can easily switch between the products in response to factors such as changes in

price.31

III.1.3 In the case of RIL/Den/Hathway32 where both Den and Hathway were MSOs operating in

the Cable TV services industry, the CCI held DTH services to be substitutable with the Cable TV

services on the grounds of their similar quality of service and end use.

31
Ashish Ahuja v. Snapdeal, Order under section 26(2) of the Competition Act, 2002, Case No.
17 of 2014.
32
RIL/Den/Hathway case, Order under Section 31(1) of the Competition Act, 2002, Combination
Reg. No. C-2018/10/609.
11
III.1.4 Therefore, to determine a relevant product market, it is essential to identify the consumer

industry on the basis of their intended use since the substitutability has to be determined with the

perspective of the concerned consumer industry. In Adani Gas Limited (Agl) v. Competition

Commission of India33, the ‘market for supply and distribution of natural gas to the industrial

consumer’ was identified as the relevant market.

III.1.5 4 It is humbly submitted that in the instant case, Start Tech is involved in the business of

providing technologically advanced Ed-tech solutions. However, it must be noted that, Vision’s

area of operation includes its recently developed learning management system which is a web-

based technology used to implement and assess learning processes.34

III.1.6 On the basis of the aforesaid, it is concluded that both Start Tech and Vision are concerned

with providing Technological Solutions used to enhance delivery of education. In this context, the

services of both the companies are substitutable without resulting in any inconvenience. Hence,

they must fall within similar relevant market definition.

III.2 THAT THE SSNIP TEST IS BEING FULFILLED MAKING THE TWO

COMPANIES A PART OF SIMILAR RELEVANT MARKETS.

III.2.1 The (Small but Significant and Non-transitory increase in price) test is based on the concept

of a hypothetical monopolist. As per this test, if a hypothetical monopolist raises price of the

products above 5-10% of the level of competition, the relevant product market would include all

those products which a consumer would consider as being substitutable in response to changes in

price.35

33
Adani Gas Limited v. Competition Commission of India, TA (AT) (Competition) No. 34 of
2017.
34
Moot Proposition, ¶.4.
35
Bishop & Darcey (1995).
12
III.2.1 It is submitted that, in Adani Gas Limited (Agl) v. Competition Commission of India, it

was held that the only relevant question for determining relevant market is the possibility of

substitution in case of changes in price. In addition to this, in United States v El du Pont, Du Pont

was charged with monopolizing the production and sale of Cellophane. The relevant market was

determined to be ‘The market for all flexible wrapping materials’36 on the grounds that a slight

change in the price of cellophane lead consumers to switch between the other available flexible

wrapping materials.

III.2.3 It is contended that, in the present case, as per the applicability of the SSNIP test, if the

prices of the services offered by Vision/Start Ed increase by 5-10% it would lead to the consumer

base of these entities shift in response to such a change on the premise that the services offered by

Vision which includes provisions for tutoring to students through reading materials and smart

learning technology is substitutable in response to change in price with the services offered by

Start Ed which includes but not limited to providing virtual learning practices through its Learning

Management System.

III.3 THAT EVEN IF THE MODE OF OPERATION OF BOTH THE MARKETS ARE

DISTINCT THEY FORM A PART OF THE SAME RELEVANT MARKET.

III.3.1 the CCI in All India Online Vendor’s Association (Aiova) v Flipkart37 remarked e-

commerce markets and offline markets as a part of the same relevant market on the basis that

offline retailers often enter into partnership with the e-commerce market making these markets

complementary to each other. Further, in Make-my-Trip (MMT)/Ibibio combination case38, the

36
United States v. E.I. du Pont de Nemours & Co., 366 U.S. 316 (1961).
37
All India Online Vendor’s Association v Flipkart, Competition Commission of India, Case No.
20 of 2018.
38
Notice under Section 6 (2) of the Competition Act, 2002 given by MIH Internet SEA Pte Ltd,
Combination Reg. No. C-2016/10/451.
13
relevant market was delineated as ‘sale of travel and travel related services’. It was emphasized

by the CCI that the travel agencies operate through both offline and online modes or channels

this enables the consumers to easily switch between the two modes as per their conveniences.

III.3.2 It is submitted that, in Ashish Ahuja v Snapdeal39, the CCI on the question of

interchangeability between the e-commerce markets and the offline markets concluded that a

consumer analysis takes into account the difference in factors such as discount rates and

shopping experiences of the offline and online marketplaces. Based on the above, it concluded

that the offline and online markets are a part of the same relevant market with distinct mode of

distribution.

III.3.3 Therefore, it is humbly submitted that, in the present case the distinct mode of operation

of Vision and Start Ed does not make them a part of separate relevant market. In context of a

consumer analysis of both the markets of the entity, since both enterprises provide for

preparatory coaching services, a consumer would analyse distinctions in factors such as the

prices of educational services provided by Vision vis a vis the virtual learning practices of the

Learning Management System of Start Ed. This would enable the consumer to shift between the

provisions of the two enterprises without any complication, thus the relevant market was

correctly defined.40

39
Ashish Ahuja v Snapdeal, Order under section 26(2) of the Competition Act, 2002, Case No.
17 of 2014.
40
Moot Proposition, ¶.4.
14
IV. WHETHER THE CCK’S PRIMA FACIE VIEW THAT IMPUGNED COMBINATION

IS LIKELY TO DISTORT COMPETITION DUE TO VERTICAL OVERLAPS,

CORRECT?

It is humbly submitted that the prima facie view of the CCK is correct and acquisition of 11%

shares in Doom by Ultron via Vision does distort competition on the grounds that, firstly there

existed vertical overlap between the parties to the combination [IV.1] secondly the acquisition

of shares by Vision in Doom doesn’t come within the ambit of Schedule 1 exemption [IV.2] and

lastly, the CCK only formed a prima facie view and the combination causes Appreciable Adverse

Effect on Competition (hereinafter referred to as “AAEC”)

IV.1 THERE EXISTED VERTICAL OVERLAP BETWEEN THE PARTIES TO THE

COMBINATION.

It is humbly submitted that the acquisition of shares in Doom by Vision satisfies the threshold

criteria laid down under Section 5 of the Competition act, as turnover of Doom in FY’22 exceeds

the limit set, thus the combination needed to be notified to the CCK before effectuating the same.

After notifying the same, the CCK analyses the combination to ensure that there is no appreciable

adverse effect on competition in the relevant market, for the same the CCI in case, broken down

into: (a) delineation of the relevant market (product and geographic); (b) identification of overlap

in the relevant market; and finally, (c) subjecting the combination to competition analysis under

section 20(4) of the Act.

IV.1.1 Vision is involved in providing educational services along with teaching supplements like

reading materials, recorded lectures offline through its own centres41. It also expanded its

operations to enter into a new line of business of supplying Ed-tech software solutions and

41
Moot Proposition, ¶. 3.
15
internally started working on its own mobile learning app to launch an online platform after being

acquired by Ultron. Thus, the relevant market for Vision is ‘Online and offline Education delivery

platforms with provision for supply of ed-tech software solutions.’ Whereas DOOM engages in

the business of providing video transmission and streaming services to support various activities

like broadcasting, OTT platforms, videotelephony, online conferences, etc. The relevant market

for Doom is ‘provider of streaming services.42’

IV.1.2 It is humbly submitted that there existed a vertical link between both the entities as Vision

was already providing recorded lectures to its customers and it had already started working on

an online app to cater to its customers, both of which require streaming services to bring the

product to the customers of Vision, which comes under the ambit of the substantial business of

operations of DOOM i.e DOOM is present in the upstream market for Vision, thus leading to a

potential vertical overlap between the parties to the combination as identified by the CCK.

IV.2 THE ACQUISITION OF SHARES BY VISION IN DOOM DOESN’T COME

WITHIN THE AMBIT OF SCHEDULE 1 EXEMPTION.

IV.2.1 The Schedule 1 of the Combination regulations provides the situations in which an entity

is exempt from notifying the CCK, the Item 1 in this schedule provides for such an exemption

when acquisition is of less than 25%. It is humbly submitted that the acquisition of shares of

DOOM by Vision doesn’t come within the exemptions provided under Item 1 Schedule 1 of the

Combination Regulations. The CCI in the EMC43 notification and New Moon/Mylan44, held that

42
Moot Proposition, ¶. 8.
43
Notice filed by EMC Ltd. under Section 6 (2) of the Competition Act, 2002, Combination Reg.
No. C-2015/07/293.
44
Notice filed by New Moon BV under section 6(2) of the Competition Act, 2002, Combination
Reg. No. C-2014/08/202.
16
where acquirer and the target are engaged in the same, substitutable or competing businesses or

where their businesses are vertically related i.e acquirer and the target are either engaged in

activities at different stages or levels of the production chain, such acquisition of shares even if

it is of less than 25% would not necessarily be termed as an acquisition made solely as an

investment or in the ordinary course of business. Similarly, Strategic combinations which are

active in vertical markets cannot claim the exemption under Schedule 145, and even in absence

of evidence of written and binding documents between parties does not necessarily preclude the

existence of strategic intent behind an acquisition. Therefore, other factors including surrounding

circumstances must also be taken into consideration to determine whether the proposed

acquisition falls under the exemption.

IV.2.2 It is humbly submitted that the acquisition of 11% shares by Vision in DOOM is a

strategic investment as the entities are vertically related as has been contended above. The

acquisition of shares comes at a very opportune time i.e offer was made to DOOM, when Vision

was working on extending its business to online mode as well and DOOM had just launched a

new video transcoding technology in addition to its ongoing streaming services, thus making

this investment a great fit for Vision for its future growth in the market of online educational

platforms.

IV.2.3 In arguendo, Vision is controlled by Ultron which is a market leader in web search engine,

and is involved in acquisition with the intention of absorbing businesses with innovative

technologies at their nascent stage, to either prevent them from becoming its competitors or for

45
The Competition Commission of India (Procedure in regard to the transaction of business
relating to combinations) Regulations, 2011, Schedule I, Notification No. 3, 2011.

17
 foreclosing its competitors from accessing these technologies. Ultron could use its dominance

in its market to promote its own businesses i.e vertically linked entities as was evident from the

conduct of Google which was later penalised by the European commission46 for prominent

placement of its own entities while showing the search results misusing its network effect and

restraining competition.

IV.2.4 It is humbly submitted that on consideration of the intention behind the past acquisitions,

the strategic nature of the transaction, disclosure of information on the side of Vision and the

inherent comparative advantage present with Vision (i.e Ultron), the impugned combination

doesn’t come under the ambit of exemptions provided under Schedule 1 of Combination

Regulations.

IV.3 THE CCK ONLY FORMED A PRIMA FACIE VIEW AND THE COMBINATION

CAUSES APPRECIABLE ADVERSE EFFECT ON COMPETITION.

IV.3.1 The CCK had only formed a prima facie view which is held to be as a tentative view

supported by minimum level of evidence. It is only a direction simpliciter to cause an

investigation into the matter47. The CCK has not dealt with the matter in detail and has only

formed the opinion based on the information available which suggests that a potential vertical

overlap exists and it wasn’t under the obligation to establish the existence of vertical overlap or

AAEC.

46
Google v. Commission (Google Shopping), Case T-612/17.
47
Competition Commission of India vs Steel Authority of India & Anr (2010) 10 SCC 744.
18
IV.3.2 §20(4) of the Act provides the factors which are to be taken into account while deciding

upon the effect of the combination on competition, in the present case these factors have been

satisfied and thus the combination causes AAEC. These factors have been analysed below:

IV.3.3 Potential increase in extent of barriers to entry into the market48: The CCI in Grasim

industries49, held that if a combination led to concentration in the market which would act as a

potential barrier to entry for other entities and lessen competitive restrains, then it amounts to

AAEC. Vision was planning to launch its online platform as well as supply of ed-tech solutions

and Doom is involved in providing streaming services which can act as an input for Vision’s

business, This coupled with the advantages of network effects of Ultron would act as a potential

barrier to entry for other entities and would lessen competitive restrains in the market for online

education provider which would lead to AAEC.

IV.3.4 Likelihood that combination would result in the parties to the combination being able to

significantly and sustainably increase price or profit margins:50As has been already contended

that the impugned combination will lead to enhanced efficiency in providing the services to the

customers due to the vertical overlap between the business of both the entities51. Thus, it can

lead to increased profit margins for Vision.

IV.3.5 Market share, in the relevant market, of the persons or enterprise in a combination,

individually and as a combination: The market share acquired by vision in the market of online

educational platform stands at 30% in May, 202252 which it amassed in less than a years’ time,

48
The Competition, Act 2002, § 20(4)(b), No. 12, Acts of Parliament, 2003 (India)
49
Delhi Jal Board Vs. Grasim Industries Ltd. & others, Ref. Case No. 04/2013 & Ref. Case No.
03/2013.
50
The Competition, Act 2002, § 20(4)(e), No. 12, Acts of Parliament, 2003 (India).
51
Supra note, 7.
52
Moot Proposition, ¶. 24.
19
 this coupled with the strategic investment in Doom raises anti-competitive concerns related to

such a transaction, thus it can potentially lead to AAEC. Post-acquisition assessment is also

considered to be valuable complementary tool to curb killer acquisitions53. Therefore, it is

pertinent to perform an assessment after the combination had already been consummated

considering the factors identified above which can result in AAEC.

IV.3.6 It is humbly submitted that on consideration of the above factors, the impugned

combination causes AAEC according to Section 20(4) of the Act.

V. WHETHER THE MODIFICATIONS AS SUGGESTED BY CCI, WERE NECESSARY

TO ALLEVIATE THE COMPETITIVE CONCERNS ARISING OUT OF

COMBINATION OR CAN THE CONCERNS BE ALLEVIATED BY WAY OF

BEHAVIOURAL REMEDIES?

It is humbly submitted that the modifications suggested by CCK were necessary to alleviate the

competitive concerns arising out of combination of Stark Ed. and Vision as, firstly, that the

combined entity will be dominant in the market for Ed-tech software and solutions [V.1],

secondly, the combination will result in lessening of competition through coordinated interaction

[V.2], and lastly, behavioural remedies won’t be sufficient to alleviate the competitive concerns

raised [V.3].

V.1 THAT THE COMBINED ENTITY WILL BE DOMINANT IN THE MARKET FOR

ED-TECH SOFTWARE AND SOLUTIONS.

The pre and post-market concentration acts as a determinant of the potential competitive effect

of a merger by using Herfindahl-Hirschman Index (HHI), the higher the post-merger HHI, the

53
By The Secretariat, Start-ups, Killer Acquisitions and Merger Control, DAF/COMP (2020)5.
20
higher is the level of concentration in the market and Lessening of competition through

coordinated interaction is decided upon the (i) availability of key information concerning market

conditions, (ii) the level of competition in the market, (iii) ability of rival sellers to replace the

lost competition due to the merger and the barriers to entry into the market.54.

V.1.1 The CCI took into account the high combined market shares (30-40%) in a particular

product market, substantial Herfindahl–Hirschman index increments, distantly placed

competitors in a moderately concentrated market and the barriers to entry,55 reduction in number

of suppliers, reduced degree of countervailing buying power, high prices while giving a

structural remedy.

V.1.2 It is humbly submitted that, in the instant case, the entities involved in the combination

have quite high market shares in their respective markets, Vision and Stark Ed have 8% and 30%

market share in the market for provision of ed-tech software and solutions(upstream market)

respectively and Stark Ed has the highest market share in this market, and Vision has 30% market

share in the market for delivering online education(Upstream market) which is among the highest

in this market.

V.1.3 The combined market share post-combination in the market for Ed-tech software will be

38%, The combined entity will hold market share ~40% and the next competitor holds less than

2 times the above market share i.e 15%, which doesn’t pose any significant restraint on the

merged entity from engaging into anti-competitive behaviour. Thus, combination of two of the

leading competitors in this market will lead to increase in concentration in an already moderately

54
Ibid, 2.1.
55
Notice under Section 6(2) of the Competition Act, 2002 jointly given by Dow Chemical
Company & ors., Combination Reg. No. C-2016/05/400.
21
concentrated market (more than 200 points of increase in HHI), which would lead to AAEC as

the other competitors are distantly placed.56

V.1.4 The merged entity will also possess control over the company DOOM as it will have 26%

shares in it, which is also present in the upstream market for delivering online education, thus

further enhancing its presence in the upstream market. The combination would permit the entity

to operate independently of prevailing competitive forces in the relevant market. Thus, leading

to dominant position in the market, abuse of which is prohibited by Section 457 of the Act.

V.2 THE COMBINATION WILL RESULT IN LESSENING OF COMPETITION

THROUGH COORDINATED INTERACTION.

V.2.1 Vision is present in the downstream market of delivering education and is a leading player

in this market, thus combination of leading entities in both the upstream and downstream market

raises the threat of vertical foreclosure i.e input foreclosure concerns as the combined entity will

have the ownership of Jarvis, a software of which no comparable alternative existed, thus

providing the merged entity ability and incentive to restrict access to the software or increase

costs for the other downstream players leading to potential threat of vertical foreclosure.

V.2.2 In arguendo, Ultron is a market leader worldwide in the arena of web search engine, cloud

computing, storage of data, digital marketing, Operating system and various kinds of software.58

post-merger as the entities will be operated in online mode, thus it can lead to unfair advantage

in favour of Vision.

56
Supra note 3.
57
The Competition, Act 2002, § 4, No. 12, Acts of Parliament, 2003 (India).
58
Moot Proposition, pg.1.
22
V.2.3 The combined entity would become massive and other downstream players and the vertical

integration would make entry difficult; new and existing competitors would not provide a

competitive constraint, the cost to rivals of competing and increasing their presence in the market

would be much higher than before59. Thus, any small entity will not be able to significantly

restrain competition within the market.

V.3 BEHAVIOURAL REMEDIES WON’T BE SUFFICIENT TO ALLEVIATE THE

COMPETITIVE CONCERNS RAISED.

V.3.1 The purpose behind suggesting remedies/modifications to the combination is to render the

concentration compatible with the common market so that it prevents a significant impediment

of effective competition. The commitments have to eliminate the competition concerns entirely

and have to be comprehensive and effective from all points of view.60

V.3.2 Behavioural remedies in general do not eliminate competition concerns resulting from

horizontal overlaps as they are difficult to formulate, implement and monitor. They don’t always

help in preserving competition as they are usually designed in a way to serve the interests of the

parties61, for this reason structural remedies are strongly preferred in horizontal and vertical

merger cases because they are clean and certain, effective, and avoid ongoing government

entanglement in the market.62

59
Notice under Section 6(2) of the Act given by Schneider Electric India Pvt. Ltd & ors.,
Combination Reg. No. C-2018/07/586.
60
Cementbouw Handel & Industrie BV v. Commission of European Communities, Case T-
282/02,[2006] ECR II-319, paragraph 307.
61
Merger Remedies Manual, Antitrust Division, U.S Department of Justice, 2020, available at:
https://www.justice.gov/atr/page/file/1312416/download. accessed on 30/01/2023.
62
Ibid.
23
V.3.3 The CCI in Agrium/Potash combination provided a divestiture remedy to preserve

competition and the incentive to compete, after companies already having significant market

share combined with other major players, which led to elimination of ability and incentive to

compete, thus, lessening the competitive restraints in the market. 63 It also accepted a remedy

accepted the undertaking given by the parties that Indian companies would operate as separate,

independent and competitive businesses for seven years due to concerns related to bundling of

products, vertical integration, interoperability, and increasing control of the parties in the supply

chain due to the merger64as structural remedy has an immediate and durable market impact.65

V.3.4 It is humbly submitted that, in the instant case the takeover of Stark Tech by Ultron results

in strengthening of structural links and alignment of interest between the parties i.e Vision and

Stark Ed, it also gives them the ability and incentive to distort competition, thus causing AAEC

as contended above. Behavioural remedies won’t eliminate the concerns raised as the market in

which companies operate is digital, which isn’t stable as it is evident from the increase in market

shares and switch to online mode by multiple entities after arrival of the pandemic, thus the

suitable remedies for the same can’t be decided by taking reference from past transactions.

V.3.5 It can be easily deduced from the nature and trends in the market of online education

providers that it is the bigger players in the market who have received the benefit of the lockdown

by tripling or quadrupling their business.66 Thus, Vision/Stark Ed. will hold the power to distort

63
Notice under Section 6 (2) of the Competition Act, 2002 given by Agrium Inc. and Potash
Corporation of Saskatchewan, Inc. Combination Reg. No. C-2016/10/443.
64
Notice under Section 6 (2) of the Competition Act, 2002 given by China National
Agrochemical Corporation, Combination Reg. No. C-2016/08/424.
65
International Competition Network (ICN) Merger Working Group, Merger Remedies Guide,
(2016).
66
Naini Thaker, Naandika Tripathi, In a Byju-Unacademy World what will the small players
Do?, Forbes India.
24
competition if not restrained from abusing their dominance and thus, Remedies for their future

conduct will not be able to eliminate the competitive concerns raised by the combination as in

order to preserve competition at the same level as pre-merger level, the remedies needed will

have to remain in force for a long period of time for other entities to become competitive in the

same market and the longer the remedy is to be in force, the lesser impact will it have to preserve

competition, also the threat of circumvention of such remedies by the parties would still exist67,

monitoring the entity for compliance with the terms of the modifications is another issue while

enforcing such conduct remedies.

V.3.7 Therefore, it is humbly submitted that, due to the nature of the competitive concerns raised

by the combination, market power of the entities, nature of the market and disadvantages

associated with behavioural remedies, only structural remedy will be suitable as it is proportional

to the harm caused to competition, as it eliminates the unilateral and coordinate effects nor does

it carry with it the disadvantages associated with the behavioural remedies. Thus, the remedies

suggested by the CCK that the parties should remain as separate, individual competitive entities

and operate at arms-length basis is necessary and appropriate

67
Thomas Wilson (Kirkland & Ellis, Belgium), Merger Remedies- Is it Time to go more
Behavioural?, Kluwer Competition Law Blog.
25
 PRAYER

Therefore, in the light of issues raised, arguments advanced, reasons given and authorities

citied, this hon’ble tribunal may be pleased to:

I. HOLD THAT THE CCK HAS POWER TO INITIATE AN INQUIRY IN

RELATION TO VISION/DOOM COMBINATION AFTER EXPIRY OF ONE

YEAR FROM THE DATE ON WHICH THE VISION/DOOM COMBINATION

WAS CONSUMMATED.

II. HOLD THAT THE UNAVAILABILITY OF ACCURATE DATA DUE TO

HOSTILE NATURE OF TAKEOVER, IS NOT A DEFENCE AGAINST NON-

FURNISHING OF INFORMATION UNDER SECTION 43-A OF THE ACT, IN

RELATION TO ULTRON/STARK TECH TRANSACTION.

III. HOLD THAT CCK WAS CORRECT IN DEFINING THE RELEVANT

MARKET FOR ASSESSMENT AS “MARKET FOR PROVISION OF

SOFTWARE AND SOLUTIONS FOR ONLINE EDUCATION PLATFROM”.

IV. HOLD THAT THE THE CCK’S PRIMA FACIE VIEW THAT IMPUGNED

COMBINATION IS LIKELY TO DISTORT COMPETITION DUE TO

VERTICAL OVERLAPS IS CORRECT.

V. HOLD THAT THAT THE MODIFICATIONS AS SUGGESTED BY CCK,

WERE NECESSARY TO ALLEVIATE THE COMPETITIVE CONCERNS

ARISING OUT OF ACQUISITION OF STARK-TECH BY ULTRON.

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And any other relief that this hon’ble tribunal may be pleased to grant in the interest of justice,

equity and good conscience.

All of which is respectfully submitted.

Sd/-

COUNSELS FOR RESPONDENTS

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