The Competition Commission of India on September 13 rejected a complaint against the proposed merger of national multiplex chains PVR and Inox. The CCI said, mere apprehension of likelihood of anti-competitive practices by an entity cannot be the subject matter of a probe. In its seven-page order, the regulator said that apprehension of likelihood of AAEC (Appreciable Adverse Effect on Competition) by an entity which is yet to take form cannot be a subject matter of inquiry/investigation under section 3 or 4 of the Competition Act. Section 3 pertains to anti-competitive agreements, and section 4 relates to abuse of dominant position. The CCI added, “Thus, firstly, no entity, much less a dominant entity, is in existence, even for assessment of conduct in the present case. Secondly, even if the proposed transaction is concluded, dominance per se is not anti-competitive and only conduct is, if the same falls within the provisions of section 4 of the Act.”
A complaint was filed against the proposed merger of the two largest national multiplex chains, which will create the country’s largest multiplex chain with a network of more than 1,500 screens. The merger had been announced on March 27 this year. PVR and Inox were not required to seek the CCI’s approval for the deal because it was below its threshold levels.