MSME Takeovers: Parl Panel Urges CCI Scrutiny

New Delhi, Aug 11 (PTI) A parliamentary panel on Monday suggested that the government and the Competition Commission should reassess the deal value threshold of Rs 2,000 crore for mergers to ensure that the threshold does not inadvertently facilitate acquisition of MSMEs by larger corporations without regulatory scrutiny.

Emphasising that the CCI should transition from a reactive "post-mortem" approach to a proactive strategy to effectively regulate the rapidly evolving digital economy, the committee said the watchdog can look at expanding its sector-specific market studies into emerging areas where new business models are disrupting traditional competition dynamics. "The findings from these studies should directly inform policy interventions".

The Standing Committee on Finance made the suggestions in its report on the 'Evolving role of Competition Commission of India in the economy, particularly the digital landscape' tabled in Parliament on Monday.

Currently, the Deal Value Threshold (DVT) is Rs 2,000 crore which means that transactions beyond that value need to be cleared by the Competition Commission of India (CCI).

In the report, the panel said the DVT should be reviewed by the Ministry of Corporate Affairs (MCA) and CCI.

"This reassessment is crucial to ensure the threshold does not inadvertently facilitate the acquisition of MSMEs by larger corporations without regulatory scrutiny, thereby preventing the creation of monopolies or duopolies that harm fair competition. A lower threshold for acquisitions involving MSMEs could be considered if market studies indicate so," it noted.


Further, the committee said the watchdog should continue its proactive investigations into predatory pricing and deep discounting by dominant online platforms to prevent such practices from harming small retailers.

"Specific guidelines could be developed to clarify when such practices become anti-competitive. Finally, mechanisms should be put in place to ensure data access for smaller businesses, enabling them to compete effectively against large digital enterprises that control vast amounts of data," the report said.

Among others, the panel said that as of April 30, 2025, out of a total imposed penalty of Rs 20,350.46 crore, a massive amount of Rs 18,512.28 crore has been either stayed or dismissed by appellate courts.

"This makes the remaining amount of Rs 1,838.19 crore 'realisable', of which the CCI has realized Rs 1,823.57 crore, a high realization rate of 99.20 per cent. This data indicates that while the CCI is effective at collecting penalties that are not under litigation, its overall enforcement is significantly undermined by legal challenges," it added.

Against this backdrop, the committee has recommended that the CCI in coordination with the MCA should explore measures to reduce litigation delays and ensure the effective enforcement of its orders, particularly in complex digital market cases.

While the inclusion of new provisions in the Digital Competition Bill (DCB) is vital for fostering fair competition and aligning with global standards, the panel said its implementation must be carefully managed.

"The approach should be nuanced, phased, and evidence-based, taking into account the CCI's current capacity constraints. It is also crucial to address concerns from stakeholders regarding the potential impact on innovation and the compliance burden for emerging Indian tech companies and MSMEs," it added.