17 questions that will help you understand the Commitment and Settlement mechanism under the Indian Competition Act

On 05 March 2024, the Government of India, notified and brought into force Sections 48A and 48B of the Competition Act.

Section 48A provides for settlement mechanism and Section 48B provides for commitment mechanism.

These updates are expected to reduce investigation timelines, provide faster adjudication and timely correction in market distortions.

Here are 17 questions that will tell you everything that you need to know about the new settlement and commitment mechanisms under the Indian Competition Act.

The key statute governing competition law in India is Competition Act, 2002, which was amended in April 2023 vide Competition (Amendment) Act, 2023 (“Competition Act”).

The Competition Act provides for penalties with respect to anti-competitive agreements, abuse of dominance and also regulates combinations and mergers having appreciable adverse effect on competition in India.

In terms of the Competition Act, Competition Commission of India (“CCI”) is the regulator and the investigation is conducted by Director General’s (“DG”) office.

In other words, DG is the investigative wing of the CCI.

DG commences investigation upon receipt of (prima facie) order under section 26(1) of the Competition Act.

DG has not been vested with powers to undertake investigations on a suo-moto basis.

Upon completion of the investigation, DG submits its investigation report to the CCI along with all the material, evidence and documents as may be collected during the investigation process.

The commitment and settlement provisions have been introduced for parties to voluntarily comply with the provisions of the Competition Act – without requiring to face the DG investigation and subsequent imposition of penalties.

The same allows reduction in investigation timelines, faster adjudication and timely correction in market distortions.

CCI vide notification dated 06 March, 2024, notified the Competition Commission of India (Settlement) Regulations, 2024 (“Settlement Regulations”) and Competition Commission of India (Commitment) Regulations, 2024 (“Commitment Regulations”).