The Competition Commission of India's Competition Commission of India (Settlement) Regulations 2024 and Competition Commission of India (Commitment) Regulations 2024 came into force in March 2024, implementing the settlement and commitment framework introduced by the Competition (Amendment) Act 2023. One year of practice under these regulations offers important guidance for companies that are currently under CCI investigation or that anticipate scrutiny of their commercial arrangements. The early precedents demonstrate both the potential efficiency gains and the strategic risks of engaging the settlement and commitment process.
The Settlement Mechanism: How It Works
The settlement mechanism is available to enterprises under investigation for contravention of Section 3 (anti-competitive agreements) or Section 4 (abuse of dominant position) of the Competition Act 2002. A settlement application may be filed after the Director General has submitted its investigation report to the CCI and before the CCI issues its final order. The applicant proposes a settlement amount — equivalent to a reduction on the anticipated penalty — and agrees to stop the impugned conduct. The CCI may accept, reject, or modify the proposal. Importantly, settlement under the 2024 Regulations does not require the applicant to admit the contravention.
The key attraction is finality. A settlement order closes the investigation and prevents re-investigation of the same facts. The settlement amount is typically lower than the penalty the CCI would impose after full proceedings, and the absence of an adverse finding on the merits reduces reputational exposure and third-party damages litigation risk. The trade-off is that settlement applications are not available to cartel participants — the leniency regime under Section 46 and the Leniency Regulations remains the exclusive route for cartel disclosures.
The Commitment Mechanism: Pre-Order Resolution
Commitments are available at an earlier stage — after the CCI has issued a notice of investigation but before the Director General's report is submitted. An enterprise under investigation may offer structural or behavioural commitments: changing its business practices, amending contracts, divesting assets, or granting access on revised terms. If the CCI accepts the commitments, it closes the investigation without any monetary penalty. Commitments are particularly suited for investigations arising from vertical restraints, exclusive dealing arrangements, or refusal-to-deal conduct where the remedy is commercial reform rather than punishment.
The early precedents indicate that the CCI has accepted commitments in approximately four of the ten commitment applications filed in the first year. Commitments were accepted where the enterprise made concrete, time-bound, verifiable proposals. Vague commitments to "review internal policies" or "consider market feedback" were uniformly rejected. Companies engaging the commitment process must treat it as a serious regulatory negotiation, not an administrative procedure.
Settlement Quantum: Early Guidance
The first year's settled cases provide indicative guidance on settlement quantum, though the CCI has resisted establishing a formal discount table. Settlement amounts in the resolved cases have ranged from 15% to 40% below the estimated penalty that would have applied under the penalty methodology set out in the CCI's penalty order precedents and Section 27 of the Act. The discount appears to be higher when: the contravention was of limited duration, the enterprise has implemented remedial measures before settlement application, the enterprise's cooperation with the Director General investigation was substantive, and the anti-competitive effects were localised rather than economy-wide.
Strategic Considerations for Companies Under Investigation
The decision to pursue settlement, commitment, or contested proceedings is a complex strategic calculation. Settlement is most appropriate where the evidence accumulated by the Director General is strong, the potential penalty is material, the contested proceedings would take multiple years, and the company wishes to avoid adverse findings that could be used in third-party damages litigation before civil courts or consumer commissions. Contested proceedings remain appropriate where the investigation rests on contestable market definition assumptions, where the evidence is incomplete, or where precedent-setting on the legal point in question is strategically important to the industry.
Companies should be aware that a failed settlement application — where the CCI rejects the proposed settlement amount — does not preclude the CCI from using information disclosed in the settlement application in subsequent contested proceedings. This information risk means that settlement applications should not be filed opportunistically without careful preparation.
Action Items for Companies in Delhi NCR
- If your company has received a CCI notice of investigation, assess immediately whether the commitment mechanism — available pre-DG report — is the most efficient resolution path.
- Review commercial contracts for exclusive dealing, resale price maintenance, and territorial restriction clauses in light of CCI's current enforcement priorities.
- If a DG investigation report has been received, model the settlement discount against the anticipated contested penalty and litigation timeline before deciding on approach.
- Ensure that any commitments offered are specific, measurable, time-bound, and independently verifiable — generic policy commitments are rejected.
- Cartel participants must use the leniency route rather than settlement; mixing leniency and settlement strategies without legal advice creates procedural risks.