Keeping up with Competition - August 2025
A monthly newsletter by Axiom5
Welcome to the 23rd edition of Keeping Up With Competition. This month’s issue brings you key updates from July 2025, a period marked by increased activity from the Competition Commission of India (CCI), with a rise in the number of orders issued compared to last month.
A significant development is the CCI’s conditional approval of Bharat Forge Limited’s (BFL) acquisition of AAM India Manufacturing Corporation Private Limited (AAMCPL), its first order involving a detailed Phase II investigation since 2019 (Schneider/ L&T). Although the transaction was cleared in April, the detailed order was only published last month.
On the enforcement front, the CCI issued four orders in July: two closure orders, one order directing an investigation, and one final decision.
A detailed summary of each order is provided below.
CCI clears Bharat Forge’s acquisition of AAM India Manufacturing with a Hold-Separate remedy (CCI’s order available here)
The CCI recently published its detailed order green-lighting the acquisition of AAMCPL by BFL. The acquisition was cleared after a detailed Phase II investigation and was ultimately approved, subject to behavioural commitments.
Transaction: BFL, a global manufacturer of forged metal components, acquired AAMCPL's entire shareholding and its e-axle assembly lines. Both AAMCPL and BFL's existing joint ventures - Meritor HVS (India) Ltd and Automotive Axles Ltd (Affiliate JVs), which are controlled by the BNK family, manufacture axles for commercial vehicles (CVs), often serving the same customers.
Concerns of the CCI: The CCI identified concerns over the combined market power of AAMCPL and BFL’s Affiliate JVs in the broader market for axles for CVs and in the narrower market for axles for medium and heavy CVs (MHCVs). The CCI, in its order, highlighted:
High market shares: Together, they accounted for around 60–65% of the MHCV axle market (by value and volume for FY 2023–24), far ahead of the next competitor.
Reduced customer choice and innovation: The removal of AAMCPL as a competitive constraint on BFL’s Affiliate JVs was flagged as potentially reducing customer choice. Based on its analysis of bid data, the CCI observed that BFL’s Affiliate JVs and AAMCPL often competed for the same customers, and the merger could undermine this dynamic. The CCI also cited potential downsides for innovation, especially in proprietary OES-developed products, and highlighted the high switching costs faced by OEMs.
Substantial entry barriers: The CCI considered that long product development and approval timelines and significant non-financial efforts to enter and credibly compete in the Axle CV market were substantial entry barriers, limiting the likelihood of new competition in the future.
High input costs: With fewer credible suppliers, the deal could weaken OEMs’ buyer power and lead to higher input costs.
Offer of commitments: BFL voluntarily offered commitments in response to the CCI’s show cause notice, in March 2025. As these did not fully resolve the CCI’s concerns, the CCI initiated a detailed Phase II investigation. At this stage, BFL revised its voluntary modifications, which were ultimately accepted by the CCI.
Hold-separate commitments: The commitments were intended to preserve effective competition between BFL’s Affiliate JVs and AAMCPL, through a hold-separate arrangement that would subsist for seven years. During this period, AAMCPL and the Affiliate JVs would function independently, with distinct branding, sales teams, and no joint marketing or bidding. BFL also committed to issuing communications to the target’s customers and vendors about the hold-separate arrangement.
Measures detailed by the CCI: The order details measures such as ring-fencing competitively sensitive information through dedicated IT systems, NDAs, and regular compliance audits; undertaking regular competition compliance programs, and appointing a competition compliance officer; ensuring no interference in the operations of Affiliate JVs and overriding any conflicting rights under existing JV agreements. The CCI also directed that a monitoring agency would ensure the parties’ adherence to these commitments and regularly report to the CCI during the 7 year period. The granularity of these safeguards are a useful indicator for companies on protecting against the improper disclosure of commercially sensitive information, from a larger competition compliance perspective.
The granular safeguards, which include measures like using dedicated IT systems to isolate sensitive information, implementing non-disclosure agreements, and conducting regular compliance audits, provide a broader lesson for competition compliance. These steps demonstrate effective ways to protect commercially sensitive information and strengthen internal compliance programs. The order also highlights the importance of stakeholder engagement, as the CCI proactively involved stakeholders at two different stages of the merger review: first, at its discretion before a preliminary opinion was even formed, and again later during a public consultation in the Phase II investigation.
CCI closes cartelisation allegations in relation to the allotment of coal blocks (CCI’s order available here)
The CCI recently dismissed a complaint alleging cartelisation and bid-rigging in India's coal mine auctions. The complaint was filed against several major groups, including the RP-Sanjiv Goenka Group, Adani Group, and Aditya Birla Group, among others. The auctions, held in 2015 and 2023, were for the re-allotment of coal blocks that were previously canceled by the Supreme Court of India in 2014.
The CCI dismissed the case on the following key grounds:
Tendering authority flagged no concerns: The CCI consulted the Ministry of Coal (MoC) which verified that the auctions followed due process and had found no evidence of cartelisation or bid-rigging. The MoC further pointed out that the 2015 auctions had been upheld by multiple High Courts and had included at least three independent companies in each e-auction.
Indirect and circumstantial evidence: In relation to the 2023 auctions, the CCI found the evidence provided by the informant to be indirect and circumstantial. Without a complaint from the MoC and with the participation of an independent third bidder, the CCI did not see a prima facie case to initiate an investigation.
Delay in filing: The CCI declined to condone the delay in filing the complaint regarding the 2015 Sarisatolli mine auction. The Comptroller and Auditor General of India’s (CAG) report, which the informant had referenced, was made public in 2016. The CCI found the informant's explanation of a lack of knowledge until 2023 to be insufficient, and concluded that a delayed probe would serve no purpose, especially given the MoC's lack of concern and the prior validation of the auction by High Courts.
This decision highlights that the CCI is unlikely to intervene based on circumstantial evidence, especially when the relevant government body expresses no concerns. It also shows that the CCI will carefully consider the informant’s conduct and the public interest when deciding whether to condone a delay, in the context of the newly-introduced three-year limitation period.
CCI initiates investigation against Asian Paints (CCI’s order available here)
The CCI has launched a formal investigation into Asian Paints following a complaint by Grasim Industries. Grasim Industries alleged that Asian Paints engaged in several anti-competitive practices:
Forcing exclusivity on dealers: Asian Paints reportedly coerced dealers into exclusive arrangements by using threats to reduce credit limits, raise sales targets, or withdraw incentives like foreign travel and club memberships.
Restricting use of tinting machines: The company allegedly pressured dealers to return or not use tinting machines supplied by Grasim, thereby limiting consumer choice and restricting technical development in the market.
Arbitrary incentives: Asian Paints purportedly offered non-uniform, arbitrary incentives to dealers in exchange for exclusivity, rather than basing them on objective or performance-based criteria.
Denial of market access: Grasim also claimed that Asian Paints pressured suppliers, warehouse owners, and transporters not to provide services to them, making it difficult for a new entrant to access essential distribution channels.
After reviewing the evidence, including dealer surveys, affidavits, and correspondence, the CCI made the following prima facie findings:
Dominance: The CCI's preliminary assessment notes that Asian Paints was dominant in the market for organized decorative paints in India, based on several factors, including the company's significant market share, its extensive network of dealers, and the substantial barriers that prevent new competitors from entering the market.
Unfair Conduct: Based on a preliminary assessment, the CCI found that the allegations against Asian Paints, involving unfair conditions, enforcing exclusivity, and foreclosing market access, may be in contravention of the Competition Act, 2002 (CA02). Consequently, it has directed an investigation into the matter.
The CCI previously examined allegations against Asian Paints, filed by JSW Paints, regarding abuse of dominance in the decorative paints market. Finding no evidence of contravention, the CCI closed the case. However, JSW Paints has since challenged this decision before the National Company Law Appellate Tribunal (NCLAT). The outcome of this appeal could have significant implications for how such cases are assessed by the CCI going forward.
The CCI Penalises Publishers’ Association for Price Fixing (CCI’s order available here)
The CCI has once again penalised the Federation of Publishers’ and Booksellers’ Association in India (FPBAI) for engaging in anti-competitive practices, following an earlier penalty in 2021. The order followed a complaint alleging cartelisation, specifically through currency rate fixing, discount and supply term restrictions.
The complaint highlighted four key issues:
Fixed currency exchange rates, although labeled “suggestive”: FPBAI’s Good Offices Committee (GOC) was found to be imposing inflated currency conversion rates, typically 3–5% above the RBI reference rate, for the benefit of a select group of importers. While the GOC later claimed these rates were merely “suggestive,” the CCI noted this labeling came only after proceedings were initiated, viewing it as an afterthought. In practice, these rates were widely followed by booksellers across India and effectively amounted to price fixing.
Discount restrictions: In its previous order in 2021, the CCI found FPBAI’s discount control practices anti-competitive and directed it to cease such conduct. Despite this, similar allegations resurfaced, with FPBAI failing to adequately inform its members about the CCI’s decision. The CCI noted the lack of compliance but refrained from penal action due to perceived ambiguity. FPBAI has now been directed to raise awareness of the order and submit a compliance report within two months.
Restrictive supply terms: The CCI found that FPBAI’s GOC circulars prescribing commercial terms like credit period and interest rates, though claimed to be suggestive, had, over time, become industry norms. These terms limited members' freedom to negotiate, creating barriers for new entrants.
Appeals to only deal with approved vendors: The CCI found that FPBAI’s past advisories urging institutions to buy only from its approved vendors, along with circulation of vendor lists, had the effect of restricting competition. Despite no new advisories being issued post-2021, the earlier ones remain unwithdrawn, influencing procurement practices. This created entry barriers for non-members and distorted buyer choice.
The CCI’s decision aligns with its past orders (Association of Chemists and Druggists), holding that discounts or restrictive supply terms by trade associations can chill competition and standardize market behaviour. Such conduct, though seemingly non-binding, may still violate the CA02 if it controls market conditions or fixes prices.
Equally, the CCI emphasized that compliance efforts must go beyond formal withdrawal of circulars or policies. Simply removing documents from a website is insufficient. Effective compliance requires meaningful sensitisation of members to ensure that the anti-competitive effects are actually corrected and the intended objectives of the CCI’s directions are achieved.
The CCI found the FPBAI in contravention of cartel provisions for price-fixing and market control. It fined FPBAI an amount of INR 2,56,649. The CCI also penalised three of its office bearers and directed FPBAI to implement compliance measures, including withdrawing non-compliant circulars and conducting awareness programs.
CCI closes case against Cholamandalam MS General Insurance and Central Bank of India (CCI’s order available here)
The CCI closed a case against Cholamandalam MS General Insurance (CMGI) and Central Bank of India (CBI), filed by a Chennai-based MSME owner. The owner claimed that CMGI and CBI delayed providing his insurance documents, which led to a late claim rejection after his unit was destroyed by floods in 2015.
The CCI dismissed the case on two key grounds:
Delay in filing: The complaint was filed nearly ten years after the floods. The CCI found the informant’s reasons (financial hardships and health) for the delay insufficient to waive the three-year limitation period.
No dominant position: The CCI found that CMGI does not hold a dominant position in the Chennai general insurance market, which has several major competitors. As a result, there could be no abuse of dominance.