StartupTalky

Tag: Competition Commission of India (CCI)

  • Swiggy is Prohibited by a B’luru Court from Alienating a Terminated Executive’s ESOP

    Until the next hearing, the court barred Swiggy from alienating 24 of a former executive’s exercised stock options and 185.454 vested and unexercised stock options. Arun Cyril, Swiggy’s former assistant vice president, contested his “illegal” dismissal from the foodtech firm and the ESOPs that followed. Swiggy’s initial public offering (IPO) ended on 8 November 2024, with the public offering being oversubscribed 3.59 times on the last day.

    For the time being, until the next hearing, a Bengaluru civil court has barred foodtech giant Swiggy from alienating or “creating any charge” on more than 200 stock options owned by a former executive who was fired by the business earlier this year. According to the court’s order dated November 7, defendant No. 1 company (Swiggy) and its directors are prohibited from establishing any charges, interests, or alienating 185.454 vested and unexercised stock options and 24 exercised stock options of the plaintiff until the next hearing date. The next hearing in the case is scheduled for November 23 by the court.

    What Lead to Court’s Intervention?

    Arun Cyril, the former assistant vice president of Swiggy’s contact centre operations, petitioned for the directives earlier this year. 

    Cyril, who spent over ten years working at the foodtech major from 2015 to 2024, contested his “illegal” layoff and the company’s subsequent cancellation of his employee stock option plans (ESOPs) in the plea. Swiggy and its rival Zomato were found guilty of violating antitrust regulations and giving preference to specific restaurant chains listed on their platforms, according to a report by a media house earlier today.

    In addition, on November 6, the Delhi High Court sent notice to Swiggy and the Competition Commission of India (CCI) regarding a plea submitted by the National Restaurant Association of India (NRAI), contesting the exclusion of the trade association from a confidentiality ring established by the watchdog to investigate purportedly anti-competitive actions by Zomato and Swiggy.

    Swiggy’s IPO

    Among all of these, Swiggy’s initial public offering (IPO) closed recently, with the deal oversubscribed by 3.59X on the last day. In contrast to the 16.01 Cr shares available, the IPO got bids for 57.53 Cr shares, with qualified institutional investors (QIBs) accounting for the majority of these bids.  The IPO consists of an offer for sale (OFS) of 17.5 crore shares and a new issue of shares valued at INR 4,499 crore. For the public offering, Swiggy has specified a price range of INR 371 to INR 390 per share. On November 5, before the issue was made available for public subscription, Swiggy obtained INR 5,085 Cr from anchor investors. On November 13, its shares are now scheduled to go public.

    Swiggy’s first quarter (Q1) of the fiscal year 2024–25 (FY25) saw a combined net loss of INR 611 Cr, up more than 8% year over year (YoY). During the reviewed quarter, operating revenue increased 35% year over year to INR 3,222.2 Cr. 

    Swiggy Raises INR 5,085 Crore from Anchor Investors Ahead of IPO
    Swiggy secures INR 5,085 crore from anchor investors, boosting its capital and setting a strong foundation ahead of its upcoming IPO.
    StartupTalkyNitin Konde

  • In an Antitrust Investigation, Former Amazon Merchant Appario Retail Has Sued CCI

    According to court documents, Appario Retail, the former biggest seller on Amazon India, in which the e-tailer had a shareholding, has filed a lawsuit in the Karnataka High Court against the Competition Commission of India (CCI).

    Based on an antitrust regulator’s findings, the Bengaluru-based company has petitioned the court to suppress a probe into Amazon and its vendors. Amazon India sold the seller firm to Clicktech in April. As a result, the seller firm has petitioned the court to have the report that identified it overturned. The court’s hearing date on the subject is still unknown.

    CCI’s Findings Against Amazon and Flipkart

    This event coincides with rumors that the Competition Commission of India (CCI) has found that Amazon and Flipkart are giving preference to some merchants in India, and that the watchdog may fine these two online retailers.

    Delhi Vyapar Mahasangh, a traders organization and an affiliate of the Confederation of All India Traders (CAIT), initiated the CCI investigation in October 2019. The organization alleged that Amazon and Flipkart favored certain sellers over others.

    Since then, online markets and small merchants have been debating this issue frequently. Amazon and Flipkart both insist that they have complied with Indian laws. For a limited number of consumers who are paid subscribers, Amazon and Flipkart launched their main holiday sale on 26 September 2024 in order to provide speedier delivery and other services.

    In order to comply to regional e-commerce regulations, Amazon had to sell its ownership in Appario Retail, the second selling business. Amazon delisted and closed down Cloudtail, the largest seller at the time, in 2022. Catamaran Ventures, the founder of Infosys, and Amazon both had stakes in the business.

    The Significance of the Appario Retail Litigation

    Amazon has continuously refuted any misconduct, asserting that it abides by Indian law and handles all of its merchants equally. The company’s operations in India are seriously challenged by the CCI’s conclusions and the ensuing legal action.

    The action could have larger ramifications for India’s e-commerce sector and represents the first legal challenge to the CCI’s inquiry. Should Appario succeed, it might create a precedent that would encourage other businesses to question the CCI’s jurisdiction.

    Ecommerce Companies in India Are Under Strict Scanner

     Increased surveillance has been directed towards the Amazon in India. A question that was posed by the Minister of Commerce, Piyush Goyal, in August was whether or not the exponential expansion of eCommerce companies in the country was a “matter of concern” or something that should be celebrated.

    The government is also keeping a close eye on businesses that engage in quick trade. On 20th September a media report stated that the trade promotion organization DPIIT forwarded a complaint against rapid commerce companies that it had received from a retail sector body to the CCI. The report also stated that the commission had the option of taking suo motu notice of the matter.

    Flipkart and Amazon Violated Antitrust Regulations in India
    An Indian antitrust investigation has determined that U.S. eCommerce giant Amazon and Walmart’s Flipkart violated local competition laws by providing preferential treatment to specific sellers on their shopping websites, according to reports published by a reputable media outlet.
    StartupTalkyNitin Konde

  • To Calculate Fines in an Antitrust Lawsuit, CCI Wants Amazon and Flipkart’s Transaction Data

    According to a report published by a renowned media house, the Competition Commission of India has entered the final stage of its anti-trust lawsuit against Amazon and Flipkart. The regulator is seeking financial documents from the two e-commerce giants to determine the penalty.

    The specifics of the annual revenue will be used to assist in determining the penalties in the case that has been going on for four years after the defense of the two companies has been heard.

    Fine up to 10% on Global Turnover

    An update to the competition legislation was made in 2023 that allows the regulator to fine companies up to 10% of their global revenue or income from the last three fiscal years for anti-competitive actions. According to various media reports that were published earlier, the anti-trust regulator is poised to impose penalties on Amazon for alleged anti-competitive behavior. A notice was going to be published very soon, and the investigation arm of the CCI confirmed the accusations that were brought against Amazon Seller Services Pvt Ltd.

    Ecommerce Companies in India Are Under Strict Scanner

    Increased surveillance has been directed towards the Amazon in India. A question that was posed by the Minister of Commerce, Piyush Goyal, in August was whether or not the exponential expansion of e-commerce companies in the country was a “matter of concern” or something that should be celebrated.

    The government is also keeping a close eye on businesses that engage in quick trade. On 20th September a media report stated that the trade promotion organization DPIIT forwarded a complaint against rapid commerce companies that it had received from a retail sector body to the CCI. The report also stated that the commission had the option of taking suo motu notice of the matter.

    What Exactly Are Investigation’s Findings?

    An investigation into Amazon and Flipkart was ordered by the Competition Commission of India (CCI) in the year 2020. The CCI was concerned that the two companies were reportedly giving preference to certain listings and were encouraging particular merchants with whom they had business connections.

    Investigators from the Competition Commission of India (CCI) concluded that Amazon and Flipkart had developed an environment in which preferred merchants appeared higher in search results, thereby displacing other vendors. The CCI investigators made this discovery in two distinct reports, each of which was around 1,696 pages long and submitted on 9 August.

    According to both findings, which are not available to the public and are being published by a renowned media house for the very first time, each of the anti-competitive practices that were said to have occurred was investigated and confirmed to be genuine.

    Flipkart and Amazon violated antitrust regulations in India
    An Indian antitrust investigation has determined that U.S. eCommerce giant Amazon and Walmart’s Flipkart violated local competition laws by providing preferential treatment to specific sellers on their shopping websites, according to reports published by a reputable media outlet.
    StartupTalkyNitin Konde

  • For CCI Approval, Reliance, Disney May Freeze Ad Rates for Two Years

    In their most recent attempt to secure the approval of the competition watchdog for the merger of Star India and Viacom18, Reliance Industries Ltd (RIL) and Walt Disney are reportedly considering proposing a two-year freeze on advertising rate cards to the Competition Commission of India (CCI).

    With an eye towards closing by October, RIL and Disney have been looking for methods to allay the regulator’s fears regarding the merger’s possible effects on India’s media and entertainment (M&E) sector.

    The Step Will Bring Marginal Loss to the Merger

    Ad revenue loss from the ad rate freeze is unlikely to be significant, and media agency officials find RIL and Disney’s plan intriguing because it could aid the Star-Viacom18 merger in obtaining CCI clearance.

    The Indian Premier League (IPL) and other properties have taken a major hit from the recent advertising slump, but some executives are arguing that the combined business will suffer little harm from the planned rate freeze.

    Due to the departure of modern sponsors and reluctance among established brands to make costly bets on cricket, Star Sports and JioCinema have scarcely filled their ad inventory, so they would be content to maintain the current ad pricing.

    Given that the merged entity’s market share would easily surpass the 40% mark in several markets, RIL and Disney are proposing a number of measures, including a tariff freeze and the closure of certain weaker channels in Hindi and regional markets.

    CCI Keeping a Close Eye on the Developments

    In its investigation into the proposed INR 70,000 crore merger between Viacom18 and Star India, the CCI is raising concerns about possible antitrust violations and challenging the companies’ monopolies in the television and online video markets.

    It is looking into whether the planned merger will give Star-Viacom18 an unbeatable competitive advantage by consolidating important cricket rights.

    In India, cricket crosses demographics like age, income, and language to become the most watched show overall. Its premium ad prices are unmatched by any other genre.

    According to an expert in the field, the merging company’s negotiating power with advertising would be its greatest strength because of its market domination.

    Claiming that the Star-Viacom18 merger would not substantially affect competition in the M&E market, RIL and Disney applied for clearance from the CCI in May.

    The Merger’s Deal

    To establish a media conglomerate with more than one hundred television channels and two streaming platforms, Disney+ Hotstar and JioCinema, RIL and Disney signed arrangements in February to merge Star and Viacom18. This will result in the creation of a media superpower. JioCinema seems to be the only streaming platform that the merged firm is likely to keep.

    At the end of the joint venture, Bodhi Tree Systems, an organisation that is sponsored by Uday Shankar and James Murdoch, will keep the remaining interest. RIL will manage the joint venture with a 56% stake, followed by Disney with a 37% stake. On an annual basis, the combined entity would generate approximately INR 25,000 crore in revenue.

    Shankar will have the position of vice chairperson, while Nita Ambani would serve as chairman of the combined firm.

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  • NCLT Gives Clearance to Merger Between Slice and North East Small Finance Bank

    Slice, a unicorn in the financial technology industry, has been granted permission by the National Company Law Tribunal (NCLT) to merge with North East Small Finance Bank (NESFB).

    Both businesses made the announcement that they would be merging in October of 2023. In March of the previous year, Slice paid around $3.42 million to purchase a five percent ownership in a bank with its headquarters in Guwahati.

    How Merger Will Help Both the Entities?

    In a news release, Slice noted that the merger will make it possible for the merged business to make use of cutting-edge technology and profound community awareness, which will ultimately lead to increased financial inclusion across the country.

    Customers may anticipate an increased selection of products, improved omnichannel offers, and a banking experience that is more streamlined.

    The scheme of arrangement and amalgamation that involves Garagepreneurs Internet Private Limited, Quadrillion Finance Private Limited, Intergalactory Foundry Private Limited, RGVN (North East) Microfinance Limited, and North East Small Finance Bank Limited has been approved by the National Company Law Tribunal (NCLT).

    The Competition Commission of India (CCI) and the Registrar of Companies (RoC) have both given their thumbs up to Slice and NESFB respective applications.

    In addition, the Reserve Bank of India (RBI) and the Income Tax Department also issued certificates stating that they did not have any objections to the transaction.

    Slice’s Financial Report Card

    Shortly after the conclusion of Slice’s debt round of thirty million dollars, this new development has taken place. The most recent valuation of Slice was above $1.5 billion, which occurred at the Series C round in November 2021. To date, Slice has raised a total of $340 million.

    According to the data intelligence platform TheKredible, Rajan Bajaj, who held the position of CEO and co-founder of the company, owned 8.21% of the ownership.

    While Slice’s losses increased by 59.8% to a total of INR 406 crore, the company’s revenue increased by a factor of three, reaching INR 843 crore in the fiscal year 2023.

    The Bengaluru-based company was able to scale during the fiscal year 23, despite the disruption it experienced as a result of the Reserve Bank of India’s change in rules for card issuers. It has not yet submitted its annual financial reports for the fiscal year 2024.

    About Slice Card

    Slice is a digital lending platform that, in partnership with non-bank financial companies (NBFCs), provides a credit card. The Slice card is intended for individuals who are new to the concept of credit, as well as students and young professionals who have their finances limited.

    There is no requirement for a credit score, and the eligibility requirements are more lenient. There is also no annual charge or membership cost associated with the card.

    Fintech Takeaways from Slice-North East Small Finance Bank Merger
    In this article, we explore how fintech companies can lay the foundation and prepare for a probable merger-like scenario with a bank in the future.
    StartupTalkyPrithvi Durai

  • Reliance and Walt Disney Crafted a New Strategy to Win Faster Antitrust Approval

    In order to expedite the antitrust clearance process for their $8.5 billion merger of Indian media holdings, Reliance and Walt Disney have reportedly offered to sell some channels. However, they are reportedly fighting any adjustments made to the cricket broadcast rights that they own.

    With a combined 120 TV channels and two streaming services, the Reliance-Disney merger, which was announced in February, is sure to be closely watched by antitrust experts. This is because it will result in creating India’s largest entertainment platform, locking horns directly with Sony, Netflix, Amazon, and Zee Entertainment.

    The Merger Will Have an Upper Hand

    Many are worried about the combined business’s pricing power and its influence on advertisers, especially since Reliance, owned by Asia’s wealthiest man Mukesh Ambani, will own a majority stake in the combined entity. The combined company will also own valuable cricket broadcasting rights worth billions of dollars.

    Reliance and Disney have informed the Competition Commission of India (CCI) that they are prepared to sell a small number of television channels (less than ten) in order to allay fears of market dominance and secure early clearance, after the watchdog’s secret requests for approximately one hundred questions pertaining to the merger. There are other stipulations that pertain to regional Indian language channels that the two firms might control.

    This Is Not the First Time Such a Merger Is Happening

    During the year 2022, Zee and Sony made an offer to sell three television stations in order to create a television behemoth in India that would be worth ten billion dollars. However, despite the fact that this helped them get clearance from the CCI, the merger ultimately failed.

    The notification that was issued by the Competition Commission of India (CCI) to approve that merger included information about the competitive landscape. The notification revealed that in the local language of Marathi, Disney and Reliance channels had a combined market share of between 65 and 75 per cent at that time. A market share of up to 50 per cent was held by the two with regard to Bengali language entertainment channels.

    Cricketing Rights Play a Vital Role

    Cricket is an additional area of disagreement in the merger procedure. In India, the sport has a devoted fan base, making the matches highly desirable for sponsors.

    The Indian Premier League (IPL), the most prestigious cricket event in the world, and other major leagues’ digital and television cricket rights would be owned by Reliance-Disney.

    So far, the CCI has not voiced any worries about the firms’ market strength in cricket rights, but the corporations have argued with the CCI that the rights cannot be sold at the moment because they expire in 2027 and 2028.

    According to a report, the corporations are also worried that the approval process could be prolonged because the Indian cricket body would have to approve any sub-licencing of cricket rights.

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    StartupTalkyDevashish Shrivastava