Settlement and Commitment: Sections 48A to 48C

The amendment of 2023 gave the Commission two ways of ending a proceeding without a contested final order. A commitment under Section 48B is offered early, before the Director General reports, and closes the matter on the party's promise to modify its conduct, with no finding and no payment. A settlement under Section 48A comes later, after the report, and closes the matter on payment of a settlement amount together with whatever terms the Commission requires. Neither is available for cartels. The regimes came into force on 6 March 2024 with the Settlement Regulations and the Commitment Regulations, and the first settlement order was passed in April 2025.

1. Why They Were Introduced

Contested proceedings under Sections 3(4) and 4 were taking years, and at the end of them the market had usually moved on. The Competition Law Review Committee recommended a mechanism by which conduct could be corrected quickly where the party was willing to change it, on the model of the commitment and settlement procedures used in the European Union. The object is market correction rather than punishment, and that is why both routes are confined to unilateral conduct and vertical agreements, where the harm can be removed by changing the conduct, and are closed to cartels, where the object of enforcement is deterrence.

2. Commitment: Section 48B

1. Who may apply. An enterprise against which an inquiry has been initiated under Section 26(1) for contravention of Section 3(4) or Section 4.
2. When. After the direction to investigate and within the period prescribed by the Commitment Regulations, which requires the application to be made before the Director General's report is received. Commitment is therefore the early route.
3. What is offered. A proposal to modify the conduct under inquiry, the remedies being behavioural in character: to change contractual terms, to cease a practice, to grant access, to alter a pricing or ranking practice, and to report compliance.
4. Procedure. The Commission examines the proposal, may invite objections and suggestions from stakeholders, and may require modification of the proposal; the applicant may amend it within the period allowed.
5. Outcome. If accepted, the Commission passes an order recording the commitments and closing the proceeding. There is no finding of contravention and no penalty. The order is not appealable.

3. Settlement: Section 48A

1. Who may apply. An enterprise against which an inquiry has been initiated under Section 26(1) for contravention of Section 3(4) or Section 4.
2. When. At any time after receipt of the Director General's report and before the passing of a final order under Section 27 or Section 28. Settlement is therefore the later route, available once the party knows what the investigation has found.
3. What is offered. A settlement proposal setting out the terms on which the party is willing to settle, together with the settlement amount.
4. The settlement amount. Determined in the manner the Settlement Regulations prescribe, taking account of the nature, gravity and impact of the contraventions, with a discount reflecting the fact of settlement.
5. Procedure. The Commission may invite objections and suggestions from stakeholders, may require the proposal to be modified, and then decides whether to accept it.
6. Outcome. An order under Section 48A(3) recording the settlement, the amount and the terms, including the manner of implementation and monitoring. The order is not appealable.

4. Revocation: Section 48C

Section 48C permits the Commission to revoke an order of settlement or commitment. The grounds are that the applicant has not complied with the settlement or the commitment, that it has made a disclosure which is not true in a material particular, or that there has been a material change in the facts on which the order was based. On revocation the Commission may restore the inquiry and proceed as if no application had been made, and in a settlement case the settlement amount already paid is dealt with as the regulations provide. The possibility of revocation is what makes the monitoring and reporting obligations in these orders effective, since the alternative to compliance is the revival of the proceeding.

5. The Three Mechanisms Distinguished

6. The Regulations

The Competition Commission of India (Settlement) Regulations, 2024 and the Competition Commission of India (Commitment) Regulations, 2024 came into force on 6 March 2024 and supply the procedure: the form and contents of the application, the fee, the time within which it must be made, the manner in which stakeholders are consulted, the method of determining the settlement amount and the discount, the terms of implementation and monitoring, and the consequences of non-compliance. Both sets of regulations have been amended since their notification, and because the procedural detail lies in the regulations rather than in the Act, the current text should be checked before advising on timing or on the computation of the settlement amount.

7. Assessment

The case for these mechanisms is speed and market correction: the Android television matter produced a change in licensing terms within a year of the report, where a contested proceeding would have produced a penalty years later and an appeal after that. The case against them has three limbs. A settlement order is not a finding, so it creates no precedent and leaves the law undeveloped in exactly the areas, digital markets above all, where guidance is most needed. The orders are not appealable, so a third party affected by the terms has no route of challenge. And the effectiveness of the remedy depends on monitoring, which is resource intensive and which the Commission must sustain for the life of the commitment; in the Android television matter the practical question is whether manufacturers take up the new terms at all, since the older agreements were not cancelled.

8. Related Topics and Provisions