The Competition Commission of India (CCI) recently rolled out draft Settlement & Commitment regulations. The aim is to expedite the resolution of anti-competitive cases, promote compliance, and contribute to a more competitive and fair business environment in India.

The move is very timely as the Indian system is clogged with delays, sometimes running into a decade in certain competition cases, frustrating the hope for faster market corrections. So when the markets are dynamic and if relief comes after say ten years, then it doesn’t help anybody’s cause.

These draft regulations—issued under the aegis of Competition (Amendment) Act 2023—therefore are looking to address the delay issue, giving corporates a window to quickly correct their market behaviour. Currently, the entire process is time-consuming, as CCI, after taking a prima facie view, will order its investigation arm to investigate the matter. 

After a lengthy investigation, the DG (investigation) will submit a report, and the report will thereafter be shared with parties inviting their suggestions and objections. Thereafter, all parties will be heard, and rulings will be issued. This ruling will invariably be challenged before the National Company Law Appellate Tribunal (NCLAT), and thereafter, further appeals will be provided before the Supreme Court of India. So if we look at the present mechanism under the Competition Act, it takes decades for a matter to attain finality. Just to give an example, the CCI’s first intervention against a big tech issued in 2018 are still stuck at the NCLAT level. 

Once the NCLAT gives a ruling, the aggrieved party will go to Supreme Court. Similarly, CCI issued two high-decibel orders against the same tech giant in October last year—still there is no market correction, there is no relief to consumers, and there is no finality to the issue. Considering these aspects, the delays caused in investigation and inquiry, and the hierarchical appellate system, the government has decided to introduce a fast-track system where parties can offer commitments or settlements in lieu of discounts on penalties levied by the regulator.

Settlement & Commitment is a mechanism whereby parties will be induced to give voluntary remedies to the regulator. Of course, the scope of the draft regulations has brought to the fore its share of controversies and uncertainties. For instance, cartels have been kept outside the scope of the Settlement & Commitment regulations. Cartel activity is considered to be a pernicious wrong. So the Settlement & Commitment regulations apply only when there is an abuse of dominance or there is an anti-competitive agreement other than cartel (horizontal agreements).

To get a better understanding of this proposed settlement and commitment mechanism, BusinessLine spoke to Samir Gandhi, a competition law expert with over two decades of experience and Co-founder Axiom5 Law Chambers, a law firm.

Listen in to the BL State of Economy Podcast with Samir Gandhi to get a deep dive on proposed Settlement and Commitment regulations.

About the State of the Economy podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups

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