Keeping up with Competition - June 2026
A monthly newsletter by Axiom5
Welcome to the latest edition of Keeping Up with Competition, where we discuss competition law developments from May 2026.
This past month saw significant decisions from the Competition Commission of India (CCI), the National Company Law Appellate Tribunal (NCLAT), various High Courts and the Supreme Court of India (Supreme Court). The Supreme Court delivered a landmark ruling overturning the INR 202 crore penalty on Amazon, establishing clear boundaries for merger control enforcement in India and the CCI’s responsibilities as a statutory regulator. The NCLAT and various High Courts continued to enforce natural justice requirements - in particular, focusing on the requirement to give parties clear notice of allegations and a fair opportunity to defend themselves.
The CCI issued multiple orders, the most notable of which was its closure of a decade-long investigation into 12 hospitals. It also launched a public consultation into amendments to its Commitments Regulations, which came into force a little over 2 years ago.
We discuss these developments below.
1. The Supreme Court sets aside Amazon penalty and highlights the strict boundaries for merger control penalty powers (see here)
The Supreme Court delivered a landmark ruling overturning the largest ever merger control penalty and the CCI’s suspension of its approval of Amazon’s 2019 acquisition of a 49% stake in Future Coupons Private Limited. The CCI penalised Amazon under Sections 43A, 44, and 45 of the Competition Act, 2002 (Competition Act), holding that Amazon suppressed the true nature of its strategic interest in Future Retail Limited (FRL). In doing so, the Supreme Court also clarified several substantive and procedural aspects of the Indian merger control regime, demarcating the boundaries of the CCI’s powers and underscoring the importance of procedural fairness in regulatory action.
Notification vs. Characterisation: The Supreme Court noted that Amazon had disclosed the relevant transaction documents, business arrangements, and the commercial context during its review process. The CCI was not justified in using Section 43A to penalise Amazon simply because it disagreed with Amazon’s characterisation of whether certain transaction steps were inter-connected and therefore, notifiable. The Supreme Court clarified that Amazon had notified the CCI in substance, and this difference in characterisation could not amount to a failure to notify.
Limitation on Re-opening Approvals: As noted above, the CCI’s penalty order also suspended its approval of Amazon’s acquisition and directed Amazon to file a fresh notification in the longer Form II. The Supreme Court ruled that this direction violated the proviso to Section 20(1) of the Competition Act, which acts as a strict jurisdictional bar preventing the CCI from inquiring into a combination one year after it takes effect. The Supreme Court clarified that this limitation is aimed at protecting regulatory certainty - once a combination has been approved and implemented, it cannot remain indefinitely vulnerable to substantive reopening. The Supreme Court established that the CCI cannot bypass this limitation by suspending or revoking an approval already granted and demanding a fresh Form II filing. It held that the CCI had no statutory basis to suspend or revoke merger approvals under the Competition Act.
Relying on internal documents to establish liability under Section 44 and 45: The CCI relied on Amazon’s internal emails pre-dating the actual transaction documents to penalise Amazon for misrepresenting the true scope and intent of the transaction, under Sections 44 and 45 of the Competition Act. The Supreme Court ruled that the CCI could not impose penal liability based only on pre-execution deliberations. It also noted that the internal documents themselves simply provided relevant context, but did not materially differ from Amazon’s disclosures in the merger notification. The disclosure obligation under the Indian merger control regime is limited to documents or material that were relied on to come to a decision to enter into the transaction, and cannot be extended to every internal email, negotiation trail or preliminary discussions. The Supreme Court also highlighted that the CCI could use Sections 44 and 45 to penalise misstatements or omissions of material information, if the specific statutory ingredients of those provisions were met. Ultimately, on the facts, it held that the CCI had not indicated how these statutory ingredients were met with sufficient specificity, and set aside the penalty imposed under Sections 44 and 45 as well.
Procedural fairness and natural justice. The Supreme Court flagged several procedural lapses in the CCI’s penalty proceedings, that violated the principles of natural justice. While the CCI’s show cause notice (initiating the penalty proceedings) focused on the deficiencies in disclosures relating to Amazon’s arrangements with FRL, the Supreme Court noted that the final penalty order relied extensively on internal communications and proceeded on a substantially broader basis, involving suppression and misrepresentation. It noted that the CCI show cause notice had not provided any indication of consequences such as the suspension of merger approval and compelling re-notification in Form II. The Supreme Court reiterated that procedural fairness requires fair notice of the allegations, disclosure of the material relied upon, and a meaningful opportunity to answer the case ultimately advanced. It concluded that Amazon had not been afforded a meaningful opportunity to defend itself, rendering the proceedings contrary to principles of natural justice.
2. NCLAT and High Courts flag investigative boundaries and natural justice requirements in CCI inquiries
Appellate courts laid down important due process requirements, identifying lapses in multiple inquiries before the CCI.
Grasim Industries (NCLAT): The NCLAT set aside a ₹301.61 crore penalty against Grasim Industries Ltd. (Grasim) for alleged abuse of dominance in the Viscose Staple Fibre (VSF) market. It remanded the matter back to the CCI, to address the due process lapses at the final hearing stage.
The DG’s investigation established two contraventions - that Grasim had abused its dominance by imposing unfair and discriminatory prices and unrelated supplementary obligations on its customers (spinners). The DG specifically exonerated Grasim on two other counts that concerned the non-disclosure of its pricing and discount policy, and the restrictions on selling VSF to traders or intermediaries.
In its final order, the CCI’s conclusions aligned with the DG’s contravention findings, and imposed a penalty on Grasim. However, the CCI also imposed remedies directing Grasim to enforce a transparent and easily accessible discount policy, and prohibited it from imposing any end-use restrictions on buyers of VSF.
The NCLAT held that procedural fairness requires that the CCI must explicitly provide investigated parties an opportunity to defend themselves if it deviates from the DG’s recommendations on the contraventions. In this case, Grasim had not been given sufficient notice of the CCI’s disagreement with the DG on the publication of the discount policy or the imposition of end-use restrictions. The NCLAT also referred to the recently introduced Section 26(9) of the Competition Act, which requires the CCI to issue a show cause notice indicating the contraventions alleged to have been committed, before imposing penalties and / or remedial directions under Section 27 of the Competition Act.
As noted earlier, the NCLAT remanded the matter to the CCI, directing that the CCI specifically hear Grasim on the two issues where it differed from the DG’s conclusions.
Rungta Mines (Orissa High Court): The Orissa High Court (Orissa HC) quashed a CCI inquiry involving Rungta Mines Ltd. (Rungta Mines) regarding an alleged steel cartel in Tamil Nadu.
Requirements of a valid Section 26(1) order - Section 26(1) requires the CCI to express its satisfaction as to the existence of a prima facie case, with some reasoning. In this case, the CCI had merely taken on record a complaint filed by the informant-association with the Central Bureau of Investigation (CBI) and a direction by the Madras High Court (Madras HC), registered a suo motu inquiry and directed the DG to proceed “in accordance with law”. The Madras HC’s direction could not supplant the statutory requirement of the CCI’s own satisfaction that a prima facie case existed, based on the material on record. The Orissa HC noted that the original complaint did not refer to Rungta Mines, nor did Rungta Mines have any business activities in Tamil Nadu, where the alleged cartelisation took place. On this basis, the Orissa HC held that the CCI’s initiation of the inquiry was not valid, which nullified the DG’s subsequent investigation.
Party’s involvement in the investigation - Extending the logic of MRF v. CCI (2024), the Orissa HC held that parties must be given notice of their inclusion as an opposite party in an investigation and the opportunity to challenge such inclusion. The DG commenced its investigation in 2021, conducted dawn raids at Rungta Mines’ premises in 2022 and summoned 2 officers for depositions in 2023. Rungta Mines engaged with the DG under the assumption that it was a “third party”, and only determined that it was an “opposite party”, i.e. directly under investigation for alleged cartelisation, only on inspecting case records in August 2025. The Orissa HC held that natural justice requirements extend to all stages of an inquiry where the rights or interests of a party are affected. It rejected the CCI’s contention that conducting the dawn raids and issuing summons itself was sufficient notice. It held that the complete absence of any indication of its status as an opposite party was not justified.
Ultimately, the Orissa HC quashed the CCI’s inquiry and DG’s investigation in this case, but only with respect to Rungta Mines.
These decisions reflect the continuing trend of appellate review enforcing due process in CCI inquiries by reading these procedural requirements directly into the Competition Act’s statutory framework.
3. Threshold inquiries and the CCI’s discretion to close cases
Two recent decisions emphasise the CCI’s substantial discretion at the Section 26 screening stage - the boundaries of the right to a hearing, and the evidentiary standards required to trigger a CCI inquiry.
KSD Zonne Energie LLP v. CCI: The Delhi High Court (Delhi HC) dismissed a writ petition challenging a CCI closure order under Section 26(2), reinforcing the procedural roadmap for informants.
Pre-closure v post-decisional hearing: The Delhi HC reiterated the principle in CCI v. SAIL (2010) that at the prima facie screening stage, the CCI acts administratively. It is not legally obligated to grant informants a hearing before closing proceedings. The CCI fully discharges its natural justice obligations by issuing a reasoned order. The informant’s right to be heard is safeguarded through a statutory appeal before the NCLAT (acting as a post-decisional hearing).1
Writ petitions v. statutory appeal: The Delhi HC also confirmed that informants have clear legal standing to appeal CCI closure decisions to the NCLAT. It cautioned that parties opting for writ petitions over NCLAT appeals risk losing their right to appeal — time spent in writ proceedings may cause the appeal to fall outside the limitation period.
Confederation of Indian Alcoholic Beverages Companies (NCLAT): The NCLAT upheld the CCI’s decision to drop an abuse of dominance case against the Kerala State Beverages Corporation (KSBC) due to a lack of substantiating evidence.
The Informant’s Burden: While the CCI has the duty to “effectively and efficiently” deal with allegations of anti-competitive conduct, informants have a ”corresponding duty to conduct reasonable due diligence”. Filing incomplete or speculative information is not unjustified.
Threshold for initiating inquiries: The NCLAT reiterated a vital guardrail from Manoj K Sheth v. CCI (NCLAT, 2026), noting that the CCI cannot trigger resource-intensive investigations based on “mere complaint or gossip or belief the complainant or informant may have.” The NCLAT noted that the CCI had granted the informant multiple opportunities to present evidence to substantiate its allegations, but that the informant had not done so.
These cases demonstrate judicial deference to the regulator’s gatekeeping choices, perhaps reflecting the resource-intensive nature of CCI inquiries. However, this deference is contingent on one strict condition: the CCI must demonstrate a clear application of mind through reasoned orders.
4. CCI analyses aftermarket abuse of dominance in healthcare - Vivek Sharma v. Max Super Specialty Hospital
The CCI closed a long-running probe against 12 super-specialty hospitals in Delhi-NCR regarding the alleged overcharging of medicines, consumables, room rents, and medical tests for in-patients. The CCI’s inquiry originally stemmed from an information filing against Max Super Specialty Hospital, Patparganj, and was expanded into separate sub-cases against 12 hospitals.
The CCI’s conclusion turned on its delineation of the relevant market for hospital services. It analysed the 3 conditions to determine whether a secondary market is a genuine aftermarket. Since patients were provided detailed cost estimates of the treatment, medical consumables and other components such as room rent before admission, patients could undertake a whole life costing analysis and compare between different hospitals. As such, the CCI held that there was a unified systems market for “the provision of healthcare services by super speciality hospitals in Delhi NCR”. In this unified systems market, the CCI determined that none of the hospitals held a dominant position and thus, there was no abuse of a dominant position by any of the hospitals.
We trace the evolution of the aftermarkets theory in Indian competition law in our blog post here.
5. CCI invites comments on its Commitments Framework
The CCI published draft amendments to the CCI (Commitment) Regulations, 2024 (Commitment Regulations) on 29 May 2026, for public consultation. The consultation period ends on 29 June 2026.
The amendments reflect two key changes:
Expanded timeframes: The CCI proposes to extend the time period within which a commitment application may be submitted, from 45 days to 60 days from the receipt of the CCI’s 26(1) order initiating an inquiry. The CCI also proposes to extend the overall timeframe for commitment proceedings from 130 days to 180 days. The proposed amendments also introduce the “clock stop” mechanism, which excludes time taken by parties (including the commitment applicant) to respond to information requests from the overall 180 timeframe. This is likely to allow the CCI greater flexibility to evaluate the merits of commitment applications in cases involving complex industries, issues and / or multiple parties.
Clarified procedure for defective commitment applications: The proposed amendments clarify that if a commitment application has “defects” or “deficiencies,” these must be communicated to the commitment applicant. The applicant then has 10 working days to address these defects and re-file its application.
Parties’ incentives to opt for commitments turn on the predictability of outcomes and the relative cost of litigation, among other factors. While the CCI’s proposal certainly allows parties and the regulator itself more time to weigh their options, whether it moves the needle in favour of greater adoption remains to be seen. (See our recent blog post on this issue.)
The Delhi HC relied on Swadeshi Cotton Mills, where the Supreme Court held that if a statute contemplates a comprehensive post-decisional review, it excludes the necessity of the audi alteram partem rule (i.e. the opportunity to be heard) at the pre-decisional stage.