Structural and Behavioural Remedies Compared

A remedy in competition law does one of two things. A structural remedy changes what the enterprise is, by requiring it to divest a business, an asset or a brand. A behavioural remedy changes what the enterprise does, by requiring it to supply, to license, to grant access or to refrain from a practice. The choice between them arises in merger cases under Section 31, in enforcement cases under Sections 27 and 28, and in settlement and commitment proceedings under Sections 48A and 48B. Structural remedies are preferred where they are proportionate, and behavioural remedies are what practice mostly produces.

1. The Comparison

Basis	Structural	Behavioural
What it changes	The composition of the enterprise or of the market	The conduct of the enterprise
Examples	Divestiture of a business, plant, brand or set of contracts; division of an enterprise under Section 28	Supply on non-discriminatory terms, licensing, access to a facility or platform, cessation of exclusivity or tying, firewalls between businesses
Duration	One-time	Continuing, for a stated period
Monitoring	Minimal once implemented	Continuous, and the reason monitoring agencies were provided for in the General Regulations, 2024
Certainty	High: the structure either changes or it does not	Lower: compliance is a matter of degree and of interpretation
Cost to the enterprise	High, and often irreversible	Lower, and the business survives intact
Where mostly used	Merger cases under Section 31	Enforcement under Section 27, and settlement and commitment proceedings

2. Why Structural Remedies Are Preferred in Merger Cases

A merger changes structure, so a remedy that restores structure addresses the problem directly. A divestiture is self-executing once complete, requires no supervision, does not leave the Commission regulating a market it does not understand as well as the participants do, and does not depend on the good faith of the party over years. Four conditions make such a remedy workable: the divested business must be viable on its own, it must include everything needed to compete, including people, contracts and intellectual property, the purchaser must be independent and capable, and the sale must happen within a definite period, often with a trustee empowered to sell if the party does not.

3. Why Behavioural Remedies Dominate in Enforcement

In an abuse or vertical restraint case there is usually nothing to divest: the harm comes from how the enterprise uses a position lawfully held, so the remedy must address the conduct. Section 27 accordingly permits directions to discontinue, to modify agreements and to pass such other orders as the Commission deems fit, which is the basis of behavioural relief. Section 28 does permit division of a dominant enterprise, but the power has never been exercised, and for good reason: it destroys value, affects shareholders and employees who have done nothing, and requires the Commission to design and supervise a corporate reorganisation.

⚠ The weakness of behavioural remedies, and the answer to it

A behavioural remedy is only as good as its enforcement, and enforcement requires someone to know whether the enterprise is complying. That is difficult where the obligation is to supply on fair terms, to rank without preference or to license on reasonable royalties, since each requires a judgment about what is fair, neutral or reasonable. The answer adopted in India is the provision in the General Regulations, 2024 empowering the Commission to appoint an independent agency, an accounting firm, a management consultancy or a firm of professionals, to monitor implementation, report on it and inform the Commission of non-compliance. Without such a mechanism the settlement and commitment routes would not be credible, since both produce behavioural relief almost exclusively.

4. Designing a Remedy

Identify the theory of harm precisely. A remedy that does not correspond to the harm will either do nothing or do too much.
Prefer the structural solution where one exists and is proportionate, particularly in merger cases.
Make the obligation measurable. Supply at a stated price formula is enforceable; supply on fair terms invites dispute.
Fix the duration, and provide for review where the market may change.
Provide the monitoring mechanism and the reporting obligations in the order itself.
Provide for the consequence of breach, which in a settlement or commitment is revocation under Section 48C and the revival of the inquiry, and in an ordinary order is penalty under Section 42.

5. Related Topics and Provisions

Topic or provision	Connection
Orders and Remedies: Sections 27, 28 and 48	The powers exercised in enforcement cases
Regulation of Combinations: Sections 5 and 6	Modifications under Section 31
Settlement and Commitment	Where behavioural remedies are now mostly obtained
The CCI (General) Regulations, 2024	Appointment of monitoring agencies
Sections 27, 28, 31, 42 and 48C, Competition Act, 2002	Orders, modification, non-compliance and revocation