Behavioural Remedies in Oligopolistic Markets under the Indian Merger Control Regime

Competition authorities primarily make use of two types of remedies, namely, “structural” and “behavioural,” or a combination of the two1, before clearing mergers that are likely to cause substantial harm to competition. Of these, structural remedies have been the predominant choice. However, of late, in the wake of the digital revolution and greater emphasis on designing remedies on a case-by-case basis, behavioural remedies have witnessed increased use. To this end, this paper seeks to address the role of behavioural solutions in the oligopolistic market structure under Indian competition law, with a focus on the merger control regime. It also intends to understand and critically analyse the literature on the problem of oligopolistic markets and the approach adopted with respect to remedies employed by the competition authorities of various jurisdictions (including the European Union (EU), the United States of America (USA), Canada, South Korea, Brazil, and India) to address the problem. Furthermore, the paper aims to examine the scope and limitations of behavioural remedies and their potential role in the conditional clearance of mergers. We use the number and nature of merger control investigations in the aforementioned jurisdictions in which behavioural remedies were adopted during 2015–19 to examine the conditions under which these remedies were used. The findings indicate that there is no straitjacket rule in the design and implementation of remedies employed while assessing the potential competition harm of mergers. The incidence of the implementation of behavioural remedies varies according to, inter alia, the nature of the concerned industry, the nature of competition harm (unilateral/coordinated, vertical/horizontal concerns), and the specific facts of the case.