‘Commitment and Settlement’ Clause to be introduced in the Competition Act, 2002

The Government’s move to introduce a ‘commitment and settlement’ clause in the Competition Act, 2002, shows its intent to provide the companies, found on the wrong side of the competition law, an opportunity to resolve the dispute without getting involved in a legal battle. The companies will also stand a chance to opt for settlement in cases where the investigation is over, evidence has been obtained, and the adjudication process started. Such companies will have to pay a fine and ensuring that the anti-competitive practices will be corrected. This proposed clause will give much relief to the companies.

However, the companies will not simply be absolved of their defaults by giving a mere ‘commitment’. The Government is said to be working on a mechanism for deterrence alongside the enabling provision. The Government seeks to create a provision that enables deferred prosecution arrangement or compromise settlements, in cases where the public interests are not harmed. Cartelisation will be strictly kept out of the purview of this provision. The Competition Commission of India (CCI) claims that such a provision will bring ease of doing business in the country.

The other amendments that are proposed to be include regulating acquisitions by digital companies, such as facebook, that don’t have large assets in India and thus escape scrutiny of CCI. Presently, the CCI scrutinizes a deal when the acquired company has a turnover of at least Rs. 1000 Crore and assets worth Rs. 350 Crore or more. The CCI also aims to expand its presence by setting up regional offices in key metro cities to assist in investigations and for advocacy of best practices in this sector.

For more information on the discussion with the CCI chairperson Mr. Ashok Kumar Gupta and Business Standard, please visit the given link: https://www.business-standard.com/article/economy-policy/competition-act-govt-to-introduce-a-commitment-and-settlement-clause-119102100014_1.html

The discussed amendments were recommended by a 10-member panel led by corporate affairs secretary Injeti Srinivas that submitted its report of the competition law review committee which can be found hereunder: http://www.mca.gov.in/Ministry/pdf/ReportCLRC_14082019.pdf