CCI releases draft settlement and commitment regulations for public consultation

Competition Commission of India (CCI), on Wednesday, issued draft regulations on settlement and commitment pursuant to the recent amendments in the Competition Act, 2002. 

Two separate draft regulations for Settlement and Commitment have been issued for public and stakeholder comments. The fair trade regulator has given a 21-day window (August 24 to September 13) for stakeholders to submit their written comments.

In competition law jurisprudence, commitment refers to a process, where a company under investigation, offers to change its business practices to address the concerns raised by the competition authority. This can lead to the closure of the investigation without a formal finding of infringement. 

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On the other hand, settlement typically involves a negotiated agreement between the competition authority and the company, often resulting in the company admitting to the alleged infringement in exchange for reduced fines or penalties. 

Both commitment and settlement aim to resolve competition law concerns efficiently and without the need for a lengthy legal process.

The Competition (Amendment) Act, 2023, had introduced Section 48A of the Act to create a settlement mechanism, which enables an enterprise against whom an inquiry is initiated for an alleged contravention of provisions of the Competition Act which proscribe vertical anti-competitive agreements and abuse of dominant position, to apply for settlement before the CCI. 

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The intent of creating a procedure for commitment is driven by the need to ensure quicker market correction, according to a background note issued along with the draft regulations. 

The Commitment Regulations provide the procedure to be followed during commitment proceedings including the following: 

(a)Form and contents of the application for commitment along with fee payable

(b)Procedure of commitment proceedings;

(c) Period during which commitments may be offered;

(d) Manner in which the CCI will invite objections and suggestions to the commitment terms;

(e) Nature and effect of the commitment order;

(f) Factors to be considered by the CCI in assessing the commitment terms;

(g) Implementation and monitoring of the terms of the commitment order;

(h) Revocation of the commitment order.