From UPSC perspective, the following things are important :
Prelims level : Green Channel concept
Mains level : Mergers and Acquisition
- Putting in place a speedier approval mechanism, Competition Commission has introduced a green channel route for clearing certain categories of mergers and acquisitions.
The Green Channel Concept
- Mergers and Acquisitions (M&As) or combinations beyond a certain threshold are required to have mandatory approval from the fair trade regulator.
- The green channel is aimed to sustain and promote a speedy, transparent and accountable review of combination cases, strike a balance between facilitation and enforcement functions, create a culture of compliance and support economic growth.
- This concept recommended by the high level panel that reviewed competition law — would allow for an automatic system for speedy approval of combinations subject to certain conditions.
- Under this process, the combination is deemed to have been approved upon filing the notice in the prescribed format.
- Parties to a combination can avail the green channel route subject to various conditions, including that there is no horizontal overlap or vertical relationship.
Benefits of the move
- The amended regulation provide for a single summary of the proposed combination.
- Earlier, entities had to provide both a short as well as a long summary.
- This system would significantly reduce time and cost of transactions.