Theme: Law | CCI's Bold Move: Draft Settlement & Commitment Regulations May Prove a Game Changer

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 National Company Law Appellate Tribunal (NCLAT) and thereafter also further appeal is provided before the Supreme Court of India.  So if we have look at 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 NCLAT level.  Once the NCLAT gives a ruling, the aggrieved party will go to Supreme Court. Similarly CCI issued two high decibels 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 and the delays caused in investigation and inquiry and the hierarchical appellate system, the government has decided to bring fast track system where parties can offer commitments or settlements in lieu of discounts of penalties levied by the regulator. So Settlement & Commitment is a mechanism whereby parties will be induced for 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 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.