The Concerns around the New Settlement and Commitment Provisions under the Competition (Amendment) Act, 2003

[By Akul Mishra]

The author is a student of Jindal Global Law School.


The Competition (Amendment) Act, of 2023 introduced several amendments to its parent statute which was in force since 2002. However, the amendments ignore a specific red flag when it comes to ensuring accountability in the remedial actions taken by companies who may have violated Chapter II of the Act after being served a notice or brought to the Appellate Tribunal.  However, the new amendments have followed the EU model, which now allows enterprises called into question over violations, to have a remedial commitment to violations stated by the Competition Commission of India. However, there are several issues regarding this newly introduced provision under Section 48(1). Although following the EU model, which has now developed as a rather strict competition regulator worldwide is not a liability for the CCI, there must be further considerations under the new provisions for the CCI to ensure that its jurisdiction and adjudicating ability are not withheld, and competition regulations are not downgraded to a checklist.

Tracing the New Process:

The new amendments have introduced Section 48A, which introduces the term ‘settlement’. Simply put, settlement allows for the enterprise under 48A(1) for settlement of proceedings initiated under Section 26(1). The onus on applying for settlement is on the enterpriseIt must follow the strict timeline and only apply between the date of the receipt of the report and the date  of any order has been passed by the CCI. Settlement is placed on the fact that the enterprise indirectly admits (without any liability, per se) the violation and offers to pay a fee or even introduce means to invalidate any violative process. Thus, it flows from a different tangent of a general ex-post proceeding Further, the CCI has the discretion to assess the violation on its gravity, timeline, nature etc., and assess whether the settlement is adequate for the violation or requires greater action. Otherwise, under 48A(5)  the CCI can pass an order to reject the settlement offer, and continue with the investigation, the order being non-appealable. Further, Section 48B also provides a distinct yet similar concept, by enabling the enterprise to offer commitments, to address all the violations assessed in receipt of the investigation report. The CCI is similarly enabled under 48B to have a discretionary power to assess whether the commitments are enough, and whether to accept or reject the application from the enterprise. Further, 48C gives a safeguard to the CCI if the enterprise applies for settlement or commitment but defers the improvements or contravenes a supportive order under Sections 48A and 48B.

The Issues arising out of the Statutory Gap:

A bare reading of 48A(3) and 48B(3) simply infers that the CCI needs to, after discretion over the submissions of settlements/ commitments simply has to accept them through an order. Further, there is no mention of whether the CCI has to record the infringement in question, and the sole discretion remains with the CCI if it wants to revoke the order which ascertains a settlement/commitment. The reason behind Competition law is to regulate markets, with a wide array of stakeholders in these transactions, including the enterprise, customers, sellers etc. Thus, there are ample provisions for addressing the concerns of a layman who may indirectly or directly suffer due to the violation of Competition Regulations/ the act itself and must get enough redressal at the appellate tribunal for the same. Thus, Section 53N provides redressal opportunities for the layman under the new amendments. Any person under Article 53(N) can now approach the Appellate Tribunal for damages amounting out to several instances including because of an order of settlement passed by the Commission. This amended provision provides a redressal forthe new provisions under Section 48A only. However, it is extremely hard to prove that there is damage arising out of a settlement order unless an infringement is mentioned in that order, which is not mandated by any provision under the new amendments.

Furthermore, there is no provision for redressal for a layman who may suffer from damages out of a commitment order. The logic here could be, that a commitment order means improvement, where the enterprise has taken steps from the violations that made part of the investigation report. However, there is no guarantee that one investigation report encompasses all the violations, which may be encompassed by one guaranteed commitment, but never rectified by the commitment, so quoted by the enterprise. Although the CCI has the discretionary power under 48C to check on all the commitments/ settlements promised by the company, the procedure will not be completed within a small timeline. During the timeline that ranges from an order of commitment to a revocation under 48C, which would then reinitiate the investigation under Section 26, stretching the wait for further redressal. Thus, there is a clear gap because there is no feature under the newly amended 53N for redressal/damages during an investigation. Further, there is no obligation to list the infringement that occurred under orders passed in the positive, under 48A. Thus, if the settlement order does not include the right so infringed, it would be nearly impossible to bring in the provisions of 53N, as damages must amount out of an infringed statutory provision. Further, the draft Settlement Regulations, particularly reg 7 clearly demarcates that the settlement order will not amount finding of contravention by the Commission against the Settlement Applicant. This would then amount to having absolutely no mention of the right so infringed, which was settled through an applicable payment. Thus, it is not clear how a layman may appeal to the tribunal for damages out of a settlement order. Further, the only recourse may be reg 5 of the draft regulations, which may allow a layman to submit objections to the settlement order. However, it is not clear if the term any party under 5(1) would amount to any party in public, or any concerned party regarding the complaint under Section 26. Thus, this gap is urgently required to be addressed by the Settlement Regulations, to ensure proper grievance redressal for the public.

Lessons to be Learned from the EU Competition Regulatory Model:

The Current regulations and provisions are similar to the EU model(the EU settlement Procedure), which follows its own system of settlements. There are some inspirations that the CCI could incorporate into its model under the new settlement initiatives. The EU model has a distinct yet wavering distinction between leniency and settlement. Leniency is used when there is a strong admittance that a violation has occurred, and the enterprise has through a threshold admitted to its liability. Leniency is rather investigative and has a parallel to the Indian provision of settlements. The settlement provision under the EU has common features in practice with the commitment provision introduced by the new amendments. However, the law in EU model disallows applications for leniency and settlements by the enterprise. Thus, an European enterprise cannot apply for leniency (alongside its numerous benefits) if a settlement procedure is in progress against it. The CCI can further build upon these models in the draft rules, especially in the case where companies may try to escape liability by applying for a settlement and not for a commitment. Although relevant discretionary power remains with the CCI in determining whether such orders will be in favour or not, it may push for further discretionary power in rejecting a settlement for a commitment, in the public interest or in cases where the offence can lead to greater damage for all stakeholders.

Further, emphasis on procedural efficacy would require a strict follow-up on the implementation of both orders under 48A and 48B. It would be more effective if the CCI decides that there is a preference for an enterprise to follow one route under 48A or 48B, with the onus being on the CCI to reject an application for 48A in favour of recommending a company to file an application under 48B. The EU model sticks to cartel cases in settlement initiatives, which may not match the CCI’s wide discretionary powers, but, on account of the consideration of all stakeholders, accountability of the company must be first. As a settlement order may be tough for the public to build a case upon, the regulations should further build upon the nature of offences that could come under the ambit of a settlement order, if the gap has not yet been addressed. Further, the CCI must ensure that the liability of the company in a settlement order is directly admitted by the enterprise itself, which must be a common practice. If such is not followed, such violations addressed by settlement orders will continue to damage the public(who have no grievance redressal against this very order), as the only checklist the company has to meet is a fee payment ex-post. Further, similar violations in the future may not be effectively prevented ex-ante. However, Reg 3 does provide strong considerations for a settlement application but the infringed right is missing from the order thus passed. The long process for revocation will hurt the public, as the recourse is hard to establish out of a settlement order and the company has indirectly escaped liability. All these are considerations that the CCI must incur in the regulations, to ensure that quick efficacy in investigations meets accountability of violations.


The CCI has prompted strong regulations for the admittance of contravention in both settlement and commitment applications. However, the gap in grievance redressal is elusive to public redressal, especially with regards to damages that a layman might face due to competition violations, which in a very basic case, can lead to an uncontrolled price range for certain sectoral products, for example.  This gap must be addressed, and the regulations must ensure that the leniency so given does not give companies leeway to ensure no liability is ever attached to its name. The draft rules for settlement and commitment are stringent in admittance of liability and contravention but, the CCI must along with the procedural gap, ensure that if there is no recording of the contravention in an order, it ensures that the enterprise does not use 48A and 48B to escape liability from the Commission or the appellate tribunal or even, from public perception considering its unfair practices.


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