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The inclusion of the settlement and commitment regulations in the amended competition law is set to boost the credibility of India’s antitrust commission and promote fair play in the market. But stakeholders see room for improvement in the draft rules, writes Freny Patel

The implementation of settlement and commitment provisions under India’s revamped competition law will be a game-changer. The provisions will not only speed up the resolution of antitrust cases and reduce litigation, but also be a saving grace for the antitrust watchdog, which is looking at a backlog of more than 120 cases pending adjudication.

The first female chairperson of the Competition Commission of India (CCI), Ravneet Kaur, took office in May this year, seven months after the former antitrust chief, Ashok Kumar Gupta, left the position in October 2022.

As the Indian government had dilly-dallied on the appointment of a new chairperson, Kaur faces a sizeable backlog. During the seven-month wait, the antitrust watchdog lacked the requisite quorum of three commissioners to adjudicate matters and therefore was not fully functional.

On 23 August 2023, the CCI released the draft rules for settlement and commitment for public consultation under section 48A of the Competition (Amendment) Act, 2023.

If any parties are suspected of violating the competition law, they have the option to present their commitments within 45 days of receiving a prima facie order for investigation. They can also choose to settle with the commission once the investigation report has been submitted by the Office of the Director General, which is the CCI’s investigation arm.

The revamped competition law – four years in the making – with the inclusion of settlement and commitment among other provisions, is poised to enhance the credibility of the antitrust watchdog and promote fair competition in the Indian market.

Large global tech giants – the likes of Apple, Amazon and Google – stand to benefit the most from the settlement and commitment provisions, having addressed similar antitrust concerns in several jurisdictions overseas by offering commitments or settling with respective authorities.

Settlement and commitment regulations “will free up the CCI’s scarce resources, which are presently being expended on long-drawn investigations and defending appeals against its orders”, says Abir Roy, co-founder and practice head of competition law at Sarvada Legal in New Delhi. These provisions will address market concerns as parties put forward corrective measures, he adds.

Sonam Mathur, a New Delhi-based partner at TT&A, agrees that the settlement and commitment provisions “will offer procedural efficiency” and enable the CCI to intervene swiftly and effectively in certain cases where parties are willing to close investigations sooner.

“[The provisions] also allow companies to better manage their exposure to penalties if there is a risk identified,” says Mathur.

Further, the provisions will help the CCI ramp up its enforcement efforts as the odds of its decisions being upheld by the National Company Law Appellate Tribunal (NCLAT), and thereafter the Supreme Court of India, will improve, says Rahul Rai, a partner and co-founder of Axiom5 Law Chambers.

During a press briefing, Jyoti Jindgar Bhanot, the CCI’s economic adviser, stated that the commission’s experience in dealing with more than 1,000 antitrust cases has shown that behavioural cases require a significant amount of investigation time due to their complexities and procedural requirements.

Abir Roy, Sarvada Legal

As parties appeal to the NCLAT and the Supreme Court of India, the commission is faced with very low realisation in terms of penalties imposed.

Kanika Chaudhary Nayar, a New Delhi-based partner at DSK Legal, says the draft settlement and commitment rules aim to revolutionise India’s competition law regime, providing companies with a “time-efficient route out of their purported contraventions, guilt-free”.

The implementation of settlement and commitment provisions will encourage voluntary compliance by the parties involved, leading to a more harmonious business environment, the legal fraternity says.

However, there are two sides to the draft rules, and several law firms and stakeholders have written to the CCI seeking modifications to some provisions lest they discourage parties from approaching the commission altogether.

Multinational companies facing similar antitrust investigations overseas, for instance, may choose not to settle in India even though a settlement is not tantamount to an admission of guilt, unlike in other jurisdictions.

Rai says, “The implications for the industry can only be positive if the implementing regulations are balanced and allow for a consultative approach to reach a settlement or an appropriate package of commitments.” The draft settlement and commitment regulations fall short of adequately balancing the competing interests of the CCI and the parties under investigation, says Rai.

A key impediment many lawyers have pointed out is the complete discretion granted to the CCI to use any information submitted by an applicant against it or any other party to the proceedings should they fail to reach an agreement on the settlement terms. And that is without necessarily allowing the applicants to be heard, says Nayar.

“The opportunity to be heard ought to be made a mandatory requirement as per the settled principles of natural justice,” she says.

Ultimately, self-incrimination will deter even the most well-meaning companies from exploring the settlement and commitment mechanism, say both Nayar and Rai.

Lack of interim relief

It is unclear whether third parties can seek interim relief once the settlement proceedings have commenced, due to a loophole in the draft regulations. The reason behind this confusion is that section 33 of the Competition Act 2002 permits temporary relief during an inquiry, but the draft settlement and commitment regulations suggest that the inquiry against an applicant will be put on hold until a final decision is reached on the settlement or commitment application.

Roy, of Sarvada Legal, suggests that the draft settlement and commitment regulations should include a clause that clarifies the power of the CCI to issue interim orders to protect the interests of the market, even if a settlement and commitment application has been filed. This is especially important for the digital market, which has a tendency to tip. Tipping is when a product gains enough users to create a monopoly for the supplier.

Settlement talks tend to differ from commitment proceedings in that market stakeholders are not involved, Roy laments. The participation of these stakeholders, through objections or comments, would offer greater insight into the adequacy of the proposed remedies, and whether they would effectively address the anticompetitive concerns raised, as well as the actual impact on the market.

Rahul Rai, Axiom5 Law Chambers

Mathur agrees that while the availability of interim relief under the commitment and settlement mechanisms is not explicitly ruled out, it would be helpful if market participants are kept in the discussion on the remedies being negotiated between the parties and the CCI.

“It would be beneficial to mandatorily have market testing or consultation on all remedies, without exception,” says Mathur. In the event of an unsatisfactory resolution, affected market participants should be able to appeal commitment and settlement decisions instead of having to approach the CCI afresh, she adds. Rai, however, feels that the concern over interim relief is misplaced. “Interim relief is usually granted in the early stage of an inquiry, and usually contemporaneous with, or in quick succession of, the CCI’s decision initiating an investigation,” he points out, adding there is little indication then on whether a party would opt to settle.

Nayar says that the time-bound processes of commitment and settlement – which must be completed within maximum periods of 90 days and 120 days, respectively – will not be effectively achieved if the discussions between the parties and the CCI go on indefinitely in a loop.

“The requirement of an appeal against the final order ought to have been considered and proposed by the commission … The only plausible reason for circumventing the same could be to cater to the fundamental issue of reducing the number of litigations and targeting speedy justice,” explains Nayar.

Tackling cartels – a missed opportunity?

The exclusion of cartels under the settlement and commitment regulations appears to be a missed opportunity, Avaantika Kakkar, a partner and head of the competition practice at the Mumbai office of Cyril Amarchand Mangaldas, tells India Business Law Journal. Including cartels would have been a pragmatic move towards the closure of proceedings for companies preferring to settle instead of litigating, she says.

“The argument that cartels benefit from leniency ignores the foundational difference between the method of initiating investigations,” says Kakkar. She goes on to differentiate leniency from settlement, with the latter being an efficient mechanism for the closure of litigation.

Rai agrees that the settlement and leniency mechanisms serve different purposes, and that the rules should apply to cartels. While settlement allows for early closure of an inquiry and pre-empts appellate litigation, leniency rules seek to bust cartels but do not necessarily lead to reduced litigation.

Cartels are the most pernicious type of anticompetitive conduct and comprise a large percentage of the CCI’s caseload. Cartels are almost always bad for consumers, who do not benefit if the CCI’s decisions are stayed by appellate courts – a situation that Rai says is often the case.

Recently, in October, the NCLAT rapped the Indian antitrust watchdog in the case of an Indian sugar cartel for failing to comply with the principle of natural justice. This was because the CCI members who heard the final arguments failed to pass the order within a reasonable time frame. Similarly, in February 2023, the Supreme Court of India granted Heineken a stay from the recovery of a beer cartel fine until the case was fully heard.

In a cartel decision based on one leniency application or more, there could be parties contesting the evidence provided by the leniency applicants and they could pursue their appellate remedies up to the Supreme Court of India, says Rai. “If reducing litigation is the aim, then the two mechanisms may very well work in parallel,” he adds.

Nayar disagrees, and says that cartels already have the benefit of the leniency regime, and now the leniency plus regime, and opines that it is best to keep them separate from the ecosystem of commitments and settlements. “Cartels are relatively more grave offences and are shrouded with the slab of irrebuttable presumption of market distortion, which is not the case for vertical restraints or abuse of dominance,” she explains.

Departures from international best practice

The draft regulations are almost completely in line with the laws of more developed jurisdictions, including those of the US and Europe.

Certain tweaks are mandatory to suit the Indian market, and these have been strikingly addressed by the CCI in the draft regulations, says Nayar.

Considering that the CCI will not presume a finding of contravention against the applicant, Nayar says that India’s draft commitment and settlement regulations are on a higher footing than those of the European Commission.

“This surely is encouraging and would provide the companies with a sense of reassurance from the commission’s end,” she adds.

However, there are a couple of aspects of the draft rules that depart from international best practices. India’s regulations propose a formalistic, almost rigid mechanism, apparently with no room to engage in a discussion with the CCI.

Unlike the sufficient flexibility granted to regulators and parties in the US and the EU to engage in discussions and consultations to reach the terms of settlement and commitment, the same does not go for India, says Rai.

Kanika Chaudhary Nayar, DSK Legal

Further, he says some leading antitrust jurisdictions do not allow the use of material provided by parties seeking to settle or offer commitments against them, should the two not reach an agreement.

Empowering the CCI to use material shared by parties against them, as mentioned above, is a clear departure from international best practice.

The draft regulations stipulate that parties can offer to settle after receiving the investigation report and choose to offer commitments before receipt of the report. Mathur says: “There are no strict cut-off events in most jurisdictions where these tools are deployed.” Neither the European Commission nor the UK’s Competition and Markets Authority (CMA), nor Germany’s Bundeskartellamt impose a bar on when a party can enter settlement discussions or offer commitments, says Mathur.

“A flexible approach offers some value,” she says. The CMA explicitly incentivises parties to enter into settlements before issuing its statement of objections by offering a reduction of up to 20% on penalties, as opposed to a reduction of up to 10% should parties opt to settle after the statement of objections is issued.


While the settlement and commitment provisions will help litigation in the long term, these cases may not carry much precedential value because there will be no final contravention orders of the CCI, says Mathur. Companies may nonetheless rely on such orders for guidance and risk management, she adds.

Mathur surmises that commitments may be accepted in cases involving established jurisprudence. “The CCI might decide to adjudicate on practices or conduct with little jurisprudence to set precedents,” she says.

The effectiveness of the settlement and commitment provisions in reducing litigation and improving jurisprudence will depend on whether parties will bite the bullet and explore the new mechanism.

Litigation will be reduced only if the CCI can build a strong case and then coax the parties to use the settlement and commitment mechanism, says Rai. “Parties will use the settlement/commitment process if there’s greater transparency in the implementation of these regulations, the CCI devises a consultative mechanism to reach an agreement with the parties’ settlement/commitment terms, and there’s no arbitrariness in decision-making,” he says.

Nayar is more positive, and believes that the processes of commitment and settlement having been made time-bound, with caps of 90 days and 120 days, respectively, could prove to be highly advantageous in reducing litigation. Considering that the regime is already in place in jurisdictions overseas, its emergence in India “would lead the way in revamping the country’s competition law and make it more stringent and enterprise-friendly”, she says.

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