Relevance of Common Ownership in Competition Analysis in India

Concerns around the anti-competitive effects of common ownership by institutional investors in competing firms have previously been raised by scholars. Recent empirical evidence has further fueled the debate, causing the European Commission to use common ownership as an ‘element of context’ in two high profile combination assessments. An allegation concerning the anti-competitive impact of substantial common ownership in Ola and Uber was recently raised before the Competition Commission of India (CCI). Through this paper, we highlight the relevance of common ownership in competition analysis in India, arguing for increasing its significance in both ex ante and ex post review. We locate the CCI’s findings within the larger debate on the anticompetitive effects arising out of common ownership and argue that it generates anti-competitive market structures, allowing firms to potentially evade competition scrutiny for lack of direct evidence. With respect to abuse of dominance, we examine recent dilutions of the definition of control across Indian and international jurisprudence to argue that common ownership could potentially allow firms to be considered part of a ‘group’ within the Act. For anti-competitive agreements, we look at the possibility of collusion facilitated by common investors, and finally, in the context of ex ante review, we discuss the possible role of common ownership in triggering merger notifications. In light of this, we emphasize that competition policy in India must engage with the anti-competitive effects of common ownership in different industries more comprehensively and urgently