The Competition Commission of India (CCI) has initiated a process of seeking public comments on two new schemes that offer businesses the option of settlement and commitments to avoid investigations into anti-competitive practices. These schemes have been enabled by recent amendments to the Competition Act. The goal is to reduce litigation and promote prompt behavioral change by offending companies.
Under these schemes, businesses can choose to settle cases or commit to changing their behavior as a way to preempt investigations by the CCI. The regulatory body is now inviting public opinions on various aspects of the implementation of these schemes. The feedback period is open until September 13.
The key areas for which suggestions are being sought include the procedure and criteria for settlements, the manner in which settlements can be proposed, the process of seeking objections to settlements, factors to be considered while evaluating settlement terms, methods of determining the settlement amount, the nature and implications of the settlement order, and the monitoring and enforcement of settlement terms.
According to the draft settlement scheme, the settlement amount determined by the CCI will be final, and requests for revision will not be entertained. Parties will have 15 days to accept the settlement offer and an additional 30 days to make the payment. Failure to comply within this timeframe will result in the rejection of the settlement application.
This move towards settlement and commitment schemes is part of a broader effort by the CCI to encourage companies to voluntarily address anti-competitive behavior and effect positive market corrections. The amendments to the Competition Act, introduced earlier this year, allow CCI to consider negotiated settlements based on the severity and impact of the contraventions. The amendments also require the CCI to provide an opportunity for the concerned parties to be heard during the consideration of settlement proposals.
These new schemes align with the government’s push to reduce litigation and enhance the efficacy of market correction mechanisms. They also come alongside higher penalties for cartels and enhanced leniency provisions, forming a comprehensive approach to tackling anti-competitive practices and fostering a fair business environment. The amended competition law enables penalties of up to 10% of the global turnover of a company engaged in anti-competitive behavior. It also introduces the “leniency plus” scheme, encouraging entities facing cartel investigations to disclose the existence of other cartels.