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Modernising Competition Regulations- Competition Commission Of India’s Proposed Settlement and Commitment Frameworks

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The Competition (Amendment) Act, 2023 has introduced sections 48A and 48B to empower the Competition Commission of India (‘CCI’) in handling alleged contraventions. Section 48A grants the CCI the authority to resolve proceedings against entities accused of violations, while section 48B allows entities facing inquiries to propose commitments regarding alleged contraventions mentioned in the Commission’s order. In response to these amendments, the CCI has unveiled the draft CCI (Settlement) Regulations, 2023, and the draft CCI (Commitment) Regulations, 2023. Given the profound implications of these regulations on CCI proceedings, a comprehensive evaluation has been attempted by the authors in this article.


1. The notion of settling proceedings has emerged as an efficient avenue for regulatory bodies and entities to swiftly and harmoniously resolve issues. Settlement allows entities to move beyond regulatory disputes, focusing on core operations without admitting fault. It also enables regulators to exert control over entities’ activities, incorporating monetary or non-monetary terms without fully adjudicating alleged violations. India’s capital and commodities market regulator, the Securities and Exchange Board of India (SEBI), has successfully encouraged settlement process with the experience of a decade and a half, with gradual increase in entities settling with SEBI.

1.1 A settlement application can be filed by a party against whom the Director General (DG), the investigative wing of the CCI, has found a violation of an abuse of dominant position and/or anticompetitive vertical agreement. The proposed CCI Settlement Regulations provide a 45-day window for Settlement Applicants to seek resolution from the receipt of the Director General’s report. Unlike SEBI’s regulations, the CCI rules offer the discretion to accept applications even up to 30 days beyond this period. Notably, CCI Settlement Regulations stipulate a time-bound process, obliging the CCI to address settlement applications within seven days of receipt, promoting expeditious resolution. Moreover, the regulations require the conclusion of settlement proceedings within 120 days of application receipt, with the possibility of extensions if deemed necessary by the CCI. Additionally, the CCI can request revised settlement terms if unsatisfied with the Applicant’s proposal, promoting a cooperative approach. Furthermore, CCI Settlement Regulations involve soliciting objections and suggestions on settlement proposals, sharing non-confidential summaries containing the Commission’s opinion, investigative findings, alleged contraventions, and offered settlement terms.

1.2 While CCI’s monetary settlement terms avoid SEBI-styled rigid and opaque mathematical formulas, an upper limit is established at 10 per cent of the average turnover from the preceding three financial years, guided by penalty guidelines. It can potentially reach the maximum penalty that would have been applicable for the Act’s contravention. A settlement discount of up to 15 per cent might be offered by the CCI, influenced by mitigating aspects such as the level of cooperation exhibited and the nature of voluntary disclosures made by the applicant. It’s important to note that commitments do not entail any payment. Application fees for settlement, however, are notably higher than SEBI’s, ranging from Rs. 5 lakh to Rs. 50 lakh based on applicant financials.

1.3 Several settlement terms mirror SEBI’s provisions, including the understanding that settlement doesn’t imply a contravention finding by the CCI and that proceedings remain suspended during settlement discussions. Enterprises found to be indulging in anti-competitive practices, abuse of dominant position, and other violations can opt for settlement or commitment. Settlement orders are to be binding, and the information submitted can be used by CCI against an applicant or third parties. The draft regulations do not provide a right of hearing to the parties before the CCI makes a decision regarding the settlement or commitment proposal.


2. The CCI’s Commitment Regulations introduce non-monetary terms for applicants to offer without admitting contraventions when facing a report from the Director General. Similar to the Settlement Regulations, the Commitment Regulations adhere to the same timeline for application submission, albeit requiring proceedings to conclude within 90 days of application receipt, with the potential for extensions. CCI Commitment Regulations parallel the Settlement Regulations, involving seeking objections, suggestions, and revised commitment terms from applicants. These regulations prioritize a swift and amicable dispute resolution process. While SEBI combines monetary and non-monetary settlement terms, CCI differentiates between two regulations due to the broader market impact of violations in the competition realm, necessitating separate evaluation.


3. Non-monetary terms, such as voluntary restrictions or undertakings, have been a challenging aspect for any financial regulator. In the draft regulations, for certain cases, the CCI may designate independent entities like accounting or law firms to oversee the implementation of settlement or commitment orders. Although this additional oversight ensures that the agreed-upon terms are effectively put into practice, CCI will have to be mindful of the fact that certain enterprises have often used restructuring, such as mergers and amalgamations or changes in legal structures, as a way to avoid subsequent compliance.


4. During the determination of outcomes, the CCI takes into account specific factors for both confirming or rejecting settlement and commitment applications. These factors include assessing whether the proposal effectively addresses the alleged contraventions, its feasibility and prompt implementation, the ease of monitoring its execution, its potential to enhance market competition, and whether the applicant has already taken steps to modify their conduct or policies that were prima facie in violation of the Act.


5. Following are key omissions in the draft Regulations that CCI needs to address:

  • Selective settlement and confidentiality – One critical aspect that remains ambiguous in the proposed regulations is whether an applicant has the flexibility to opt for settlement or provide commitments selectively, focusing on charges that are stronger in their favor while choosing to litigate the remaining allegations. This issue raises questions about the extent of discretion afforded to the applicant in navigating the settlement process. Additionally, a notable absence in the regulations is a provision that safeguards the confidentiality of the applicant’s identity for a specified duration. This omission could have repercussions on the willingness of entities to engage in settlement or commitment discussions, particularly in cases where privacy is a concern.
  • Timing of commitments and settlements – Another noteworthy absence in the regulations is clarity on whether commitments or settlements can be initiated and negotiated during proceedings that are pending before the Tribunal or any court. This omission is significant because it leaves uncertainty regarding the stage at which these alternative dispute resolution mechanisms can be employed, potentially affecting the efficiency of the process.
  • Protection of third-party rights – A crucial dimension that requires attention in the draft regulations pertains to the rights of third parties who may be affected by the alleged default. These third parties could include complainants, shareholders, stakeholders, or other relevant authorities. Since the orders of the Competition Commission of India (CCI) are ‘in-rem,’ impacting the broader market or industry, it is imperative that the regulations incorporate provisions to address the interests and rights of these stakeholders in a comprehensive and equitable manner.


6. As we delve into the forthcoming era of competition law in India, it’s evident that the proposed regulations, while currently in the draft stage and open to public input, hold the promise of transforming the landscape of competition regulation. This transformation revolves around enhancing efficiency and ensuring the expeditious resolution of disputes, ultimately benefitting all stakeholders.

6.1 One noteworthy outcome of these regulatory amendments will be the empowerment of Big-Tech companies operating in India. These companies, often the subject of complex competition law concerns, have been capable of offering commitments in other jurisdictions to address regulatory issues regarding their business practices. However, the absence of a structured mechanism in India has constrained their ability to resolve disputes efficiently and effectively within the country’s regulatory framework. The proposed regulations offer them a pathway to navigate the Indian competition landscape with greater ease and agility.

6.2 While efficiency and agility are essential components of these regulatory changes, it is equally crucial to maintain a balanced and equitable ecosystem. The goal is to establish a settlement and commitment regime that offers a win-win situation for both the Competition Commission of India (CCI) and businesses. This balance is crucial to foster an environment where businesses can address regulatory concerns without the protracted and resource-intensive nature of prolonged inquiries and litigation that can extend over years.

6.3 The draft Regulations signify a shift toward a more harmonious resolution paradigm, where disputes are not merely prolonged battles but opportunities for swift and amicable conclusions. The ability to settle or provide commitments without admitting fault offers a pragmatic approach to dispute resolution, aligning with global best practices and providing businesses with a structured framework for compliance and engagement with the regulatory authorities. It’s important to note that these regulations are not set in stone but subject to evolution based on public input. This participatory approach ensures that the final regulations will reflect the collective wisdom of stakeholders and the regulatory authorities. As these regulations take shape, they have the potential to become a model for competition law frameworks in other jurisdictions, showcasing India’s commitment to fostering a fair, efficient, and dynamic business environment.


7. The journey toward efficient competition law in India is marked by these significant regulatory developments. By empowering businesses, encouraging swift resolutions, and maintaining a balanced ecosystem, these regulations represent a step forward in the evolution of competition law. As the regulatory landscape continues to evolve, it is imperative to strike the right balance between regulatory oversight and business interests, ensuring that the competition law regime remains an effective and adaptable tool for fostering fair competition in the Indian market.