The draft regulations stipulate that a company will have the option to file a commitment application with the regulator within 45 days of its receipt of a prima facie inquiry order by the CCI.
This mechanism requires the applicant to propose commitments to address the anti-competitive concerns of the regulator. No fine has to be paid by the applicant in such cases, barring the application fee.
Similarly, a settlement application has to be filed by a company within 45 days of its receipt of the probe report of the CCI director general. However, in certain cases, another 30 days can be granted by the regulator. The settlement amount can be raised up to the maximum penalty stipulated under the competition law, depending on the nature of wrongdoing. However, the regulator can grant up to a 15% discount on this amount after considering the level of co-operation and nature of disclosures made by the applicant.
The inquiry against the relevant companies in both the commitment and settlement cases will be kept in abeyance until the regulator takes a final decision on their applications, subject to a time frame.
However, CCI will have the right to reject applications and proceed with its inquiry. The draft regulations come at a time when some of the large technology players, including Google, Apple and Facebook, face probes by the competition regulator for possible abuse of fair trade rules. The CCI had slapped a fine of ₹1,337 crore on Google in October last year for allegedly misusing its dominant position in the Android ecosystem, which has now been challenged in the Supreme Court. However, this case may not be eligible for settlement now, said an expert. The intent of commitment and settlement mechanisms is “driven by the need to ensure quicker market correction”, the regulator said. The settlement procedure is also aimed at reducing litigation.
“Settlement and commitment provisions will allow CCI to expeditiously bring market correction, preserve its scarce resources… and give parties an avenue for correction without being entangled in long-drawn litigation,” said Neelambera Sandeepan, partner at Lakshmikumaran & Sridharan Attorneys.
