What is Gun Jumping?

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About Gun Jumping:

It essentially means acting before the appropriate time and refers to situations where a party or parties to a combination (M&A deal) consummate a transaction before CCI approves the transaction, thereby, violating standstill obligations.
It is all about competition and merger control.
Gun Jumping in competition jurisprudence occurs when parties to Mergers and acquisitions deal consummate the transaction without keeping the competition authorities informed.
Most competition regimes, including India, requires pre-merger notification (in India it is the CCI)
The concept of gun-jumping has not been expressly defined in the Competition Act, 2002.
The law requires parties to a deal satisfying certain monetary thresholds, to first notify the CCI about the impending transaction.
Parties are then obligated to conform to the standstill provisions — wait for 210 days from the date of notifying or till CCI approval happens, whichever is earlier.
During the standstill period, the parties are required to continue to operate their businesses as independent entities.
If the parties fail to notify CCI before the consummation of the deal or violate standstill obligations, this is typically referred to as gun jumping.
Penalties:
- The Competition Commission of India (CCI) has the power to penalise parties for Gun Jumping under Section 43A of the Competition Act 2002.
- The penalty can be as high as 1 per cent of the total turnover or 1 per cent of the assets, whichever is higher, of the combination.

Q1) What is the Competition Commission of India?

The Competition Commission of India is a regulatory body in India responsible for enforcing competition laws to promote and sustain competition in various sectors of the economy. Its aim is to prevent anti-competitive practices, promote fair competition, and protect consumer interests.

Source: BL Explainer. Is India emerging as a hub for Gun Jumping?