The world as we know it thrives on Competition. It is, without doubt, a fundamental incentive's agent in the grant arena of development and progress. And of course, competitions are not always constructive and beneficial in the wider scheme of expansion. It is for this cause the Indian Constitution relays up on the Regulation of Combinations in Competition Law.

What are Combinations?

Section 5 of the Competition Act explains combination as: Acquisition Of One Or More Enterprises By One Or More Persons Or Merger Or Amalgamation Of Enterprises Shall Be A Combination Of Such Enterprises And Persons Or Enterprises.

Combination within the Competition Law is the merger between two or more enterprises or firms or the business sector acquisitions (such as companies or firms) by other business enterprises. The Government controls combinations or mergers and acquisitions within the country to promote competition and thereby seeing to that small scale establishments are not overshadowed and swallowed by more reputed industries. This is because the merger of big shot companies not only reduce competition but also make it difficult and almost impossible for smaller firms to grow or profit from their business. The accumulation of wealth in certain sectors of business and the consumer concerns can lead to major economic and social discrepancies within the nation.

Procedure For Investigation Of Combinations

As per the Combination Regulations, the Commission shall form its prima facie opinion as to whether the combination is likely to cause or has caused appreciable adverse effect on competition within the relevant market in India within 30 days from the receipt of the notice.

If the Commission is prima facie of the opinion that a combination has caused or is likely to cause adverse effect on competition in Indian markets, it shall issue a notice to show cause to the parties as to why investigation in respect of such combination should not be conducted. On receipt of the response, if Commission is of the prima facie opinion that the combination has or is likely to have appreciable adverse effect on competition, the Commission shall deal with the notice as per the provisions of the Act.

Regulation of Combinations

Section 6 of the Act provides for the law relating to regulating Combinations. It prescribes that all transactions qualifying as a Combination should be notified to the Competition Commission of India in Form I (short form application) or Form II (long form application) as applicable.

Section 6 further provides that a Combination shall not be given effect to until approved by the Commission or until 210 days have passed from the date of notifying to the Commission whichever is earlier. The CCI may either approve the Combination or may approve subject to modifications in the structure of the Combination or not approve the Combination.

Over the past few years CCI has suggested �modifications� i.e., a change in structure of the Combination or a requirement of divestiture of certain products prior to approving a Combination only in three out of the 500 odd notifications received by the Commission till date.

The Central Government has powers to exempt certain transactions from the applicability of Section 5 and Section 6 and pursuant to that the Central Government has notified certain exemptions from time-to-time by way of notifications. Certain exemptions are also provided by the Competition Commission in schedule I of the Competition Commission of India (Procedure in regard to The Transaction of Business Relating to Combinations) Regulations, 2011.

Types Of Combinations

Horizontal Combinations

Horizontal Combinations involve the merging of enterprises or firms with identical level of production process, with substitute goods and are competitors. The horizontal combination is primarily a friendly merger between companies, although it can be a takeout of one by the other. Of course the synergy formed by this combination enhances the business performance, financial gains and shareholder value in the long run. The cost efficiency with the staff cut-offs leads to the increased margins of the company.

However this tends to pave way for reduced competition as a monopolist agenda emerges from the combinations of powerful enterprises, along with the unemployment that follows which has a very drastic and adverse effect on the economy of the country. It is also bad for the consumers as the reduced competition gives the companies a higher pricing power. Therefore these merges are the chief focus and are often scrutinized by the Competition Law Authority for the above given reasons.

Non-Horizontal Combinations The non-horizontal combinations are of two types: Vertical and Conglomerate combinations.

Vertical Combinations

Vertical merging is combining of business firms engaged in different phases of the manufacture and distribution of a product into an interacting whole. This leads to increased competitiveness, a greater process control, wider market share, a better supply chain co-ordination and decline in cost as this sort of integration is the structuring of supply chain of companies under a particular company.

Conglomerate Combinations

Conglomerate combinations involve firms or enterprises in unrelated business fields. Such combination happens when two companies that provide different services and goods or are integrated into varying sectors of business merge together. This sort of merger happens when the companies achieve a stronger stand in the market both in products and services and profit management unlike when they are individual enterprises.

Conglomerate merges can lead to an ascend in market share, synergy and cross selling. Here diversification takes a major roll and thereby reduces the risk exposure factor. The cons of this particular combination can be the monopolization of a company over a certain market and the over expansion of the conglomerate can seriously affect the quality of functioning of the company and result in the collapse of the system. Such coalescence can be detrimental as it restricts business options for newly formed enterprises in the market. However it is to be note that Non Horizontal Conglomerations do not promote loss of direct competition and are therefore not anti-competitive within an overall framework.

Conclusion
The regulation of combinations in a broad sense has two expressions. The first one being the procedural format to be followed by the parties and the CCI, starting off from the point of notifying the Commission proceeding to the dispensation of the final order. The transactions presented to the Commission through notification maybe countenanced, countenanced with modification or held null in accordance with the concerned provisions of the Act. At the centre of any resolution made by the Commission is the, COMPETITION APPRAISAL, markedly pertaining to vertical and horizontal combinations.

Further in the challenge of steading the competition market what helps is the careful and erudite assessment of the unilateral and coordinated effects both quantitatively and qualitatively owing to specific cases. A number of factors come and go while assessing combinations but the overall guiding notion is a barter between the anti-competitive effects and the pro-competitive effects.��