Competition is one of the major factors for merging of business besides to sustain and excel, though such merger is not free from its own negatives with reference to competition. Highlight the factors to be considered wh

CS Professional · Secretarial Audit, Compliance Management and Due Diligence · PYQS · June 2018
Competition is one of the major factors for merging of business besides to sustain and excel, though such merger is not free from its own negatives with reference to competition. Highlight the factors to be considered while evaluating the appreciable adverse effect on competition of Combination of Business.

Answer & Explanation:

The following factors are considered by the Commission while evaluating appreciable adverse effect of Combinations on competition in the relevant market: actual and potential level of competition through imports in the market; extent of barriers to entry into the market; level of concentration in the market; degree of countervailing power in the market; likelihood that the combination would result in the parties to the combination being able to significantly and sustainably increase prices or profit margins; extent of effective competition likely to sustain in a market; extent to which substitutes are available or are likely to be available in the market; market share, in the relevant market, of the persons or enterprise in a combination, individually and as a combination; likelihood that the combination would result in the removal of a vigorous and effective competitor or competitors in the market; nature and extent of vertical integration in the market; possibility of a failing business; nature and extent of innovation; relative advantage, by way of the contribution to the economic development, by any combination having or likely to have appreciable adverse effect on competition; whether the benefits of the combination outweigh the adverse impact of the combination, if any.

Topics: Competition Law

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