Elon Buys a Startup. The CCI Wants to Know About Tesla, X, and Starlink Too

Picture this: Elon Musk decides to acquire a promising Indian EV charging startup through an indirectly owned investment arm in Singapore. The deal is straightforward. The target is still establishing its position in the market. The acquisition triggers a CCI filing, but on the face of it, nothing raises competition concerns.

So, why should the CCI have any role to play? According to the Competition Commission of India’s (CCI) latest FAQs, it’s not just about the size and strength of the acquirer and the target companies - it’s also about whether competition can be affected as an indirect result of the acquisition. The CCI now expects parties to map overlaps, not only between the acquirer and target, but across a much wider circle of entities - anyone controlled by or affiliated with the ultimate decision-maker behind the deal.

In simple terms, an overlap means any entity engaged in the same, related, or vertically linked business. If an overlap is identified, parties must submit detailed information explaining the nature of that connection, including market shares, competitor, supplier, customer details, and its competitive impact.

So in Elon’s case, the CCI would want to know whether Tesla, Starlink, Neuralink, or any other Musk- affiliated or controlled entity has operations in India in the same or adjacent space as the Indian EV startup - even if they aren’t involved in the deal at all. Why? Because under Indian merger rules, they’re all part of the same web, and the new FAQs stretch that web much wider.

The Clarification That Changed the Game

The CCI’s FAQ requirement may sound technical, but its implications are significant. Here’s what it says in plain terms: when filing a merger notification, parties must assess potential market overlaps not just between the acquirer and target and their controlled entities, but a much wider universe of affiliates. For the acquirer, starting from the Ultimate Control Persons (UCPs), all entities directly or indirectly controlled by the UCPs, all entities directly or indirectly affiliated with the UCPs; affiliates of their controlled entities; and controlled entities of their affiliates.

For the target, the universe is almost as wide: the target itself, its step-down controlled entities, affiliates of those controlled entities, and controlled entities of those affiliates.

That’s a long list. It means companies need to look far beyond who’s signing the deal - to include any entity in the same or vertically linked business that is controlled or affiliated.

What’s an Affiliate And a Controlled Entity Anyway?

This is where it gets trickier. The CCI doesn’t limit “affiliate” to majority ownership or direct control. Instead, it includes any entity where a party has one or more of the following: a 10% or greater shareholding (even if it's a passive investment), the right to access commercially sensitive information, or the right to appoint a board director or observer.

This matters, because it aligns with how the CCI understands “control”. Control doesn’t just mean majority ownership or significant participation in business management but the ability to exercise “material influence” over an enterprise’s management, strategy, or commercial decisions - whether through shareholding, veto rights, or even board participation. If you can sway how a business behaves, you’re likely in control, even if you don’t hold the reins directly.

These requirements cover far more ground than many dealmakers expect. A controlled fund that took a 12% stake in a competitor two years ago? That’s in. An influential founder with a single board seat on a tech firm? That’s in. A holding company with commercially sensitive information access rights buried in a company’s shareholder agreement? That’s in too.

Even if those entities that meet the affiliate threshold aren’t directly involved in the transaction, as long as they have business activities, generate turnover, or have assets in India, they still fall within the overlap review net.

Why This Matters

While the CCI had informally pushed parties to assess wider overlaps in practice, the new FAQs formally codified that expectation - turning what was once soft guidance into a hard requirement. It has immediate, real-world consequences.

Filings will be more complex and time-consuming. Overlap assessments must stretch beyond the deal parties to a sprawling web of affiliates, triggering weeks of coordination across teams and entities. For funds, conglomerates, or family offices with passive stakes, data on affiliates can be limited or out of reach. However, the CCI hasn’t carved out exceptions - if you’re connected, you’re expected to know. And the risk? It’s real. Miss an affiliate, and you’re looking at delays, re-filings, or worse, penalties for incomplete disclosure.

In a regime built on self-reporting, the burden is on the filing party to get it right the first time.

Is India Going Too Far?

That might sound like policy nuance, but it’s rooted in a deeper shift in law. For years, “control” was defined through CCI’s case-by-case practice, often open to argument. Then in 2023, Parliament stepped in and codified the lowest threshold - material influence. Even a board seat, a few veto rights, or director sway can bring an entity into being deemed as ‘controlled’.

Then came the FAQs - the CCI’s move to formalise and expand its enforcement lens. They pushed the envelope further by bringing affiliates into the overlap assessment. What began as a control test is now a control-plus-affiliation standard- with very real consequences for how filings are done.

The logic here is simple. Influence and control now take many forms, and the CCI seems to recognise that - which is why it wants the whole picture, not just the deal on paper. Dealmakers should start early - map their structures, track material influence and affiliates, and prepare to disclose more than they’re used to. The reality is that this expanded regime is a legislative shift, not just regulatory interpretation. Until there’s a course correction, this is the framework businesses will have to work within.

The result? A well-meaning enforcement tool is fast becoming a compliance headache, especially for global funds, and conglomerates, and will likely undermine the Government’s own message on the ease of doing business.

Here To Stay - The New Normal

Let’s be clear: this isn’t just a filing formality - it is a compliance challenge that can slow down or sidetrack the process. Many companies either don’t track this level of detail or aren’t keen to disclose it unless absolutely necessary, especially when passive stakes or sensitive ties are involved. In today’s globally layered structures, it’s easy to lose sight of who owns what, who sits where, or who has access to what.

Yet, under the new regime, every one of those links could matter. A missed affiliate in a CCI notification isn’t just an oversight - it could tank your deal timeline, raise red flags with the regulator, or worse, create legal liability.

In a world of complex ownership and fast-moving deals, the CCI’s message is simple: know your group, map your overlaps, and disclose what the CCI believes matters. Miss that, and you risk two outcomes, either the deal becomes too onerous to push through, or you walk into regulatory trouble you didn’t see coming.

Authors: Rahul Rai, Nitin Nair, and Divyanshu Dembi. Rahul is a partner, Nitin is a counsel, and Divyanshu is an associate at Axiom5 Law Chambers.