A writ petition filed before the Delhi High Court has challenged the constitutional validity of the settlement framework under the Competition Act, suggesting that it prevents consumers, informants and other affected parties from questioning settlement orders passed by the Competition Commission of India (CCI).
The writ petition, filed by an advocate, raises issues concerning the Settlement Regulations on the grounds that they do not provide a mechanism to invite comments or objections from consumers, informants, competitors or other stakeholders directly affected by the anti-competitive conduct in question.
The Competition (Amendment) Act, 2023, introduced Sections 48A and 48B of the Act to create a settlement and commitment mechanism. The mechanism allows companies facing antitrust investigations by the Competition Commission of India to voluntarily offer corrective measures or agree to certain terms to resolve cases without prolonged litigation.
The settlement may involve payment of an amount, behavioural remedies and monitoring conditions.
Under the framework, commitments are typically offered at an early stage of an inquiry, while settlements can be proposed after the investigation report, helping reduce regulatory delays and litigation costs.
The Rajya Sabha Committee on Subordinate Legislation is examining both regulations, along with the monetary penalty guidelines under the amended Competition Act.
According to the Competition Commission of India, the intent behind creating these procedures is to reduce litigation and ensure quicker market correction.
Under the Settlement Regulations, the CCI accepted Google’s proposal in connection with the Android TV case for an amount of Rs 20.24 crore after applying a settlement discount of 15 per cent in accordance with the legal provisions.
The petitioner alleged that, in the Google Android Smart TV matter, objections were invited only from selected parties and entities that had participated in the investigation, without issuing a general public notice.
The petition against the Union government and the CCI has sought a declaration that Section 48A(7) of the Competition Act, 2002, and the CCI (Settlement) Regulations, 2024, are unconstitutional, void and inoperative. It alleged that the provision violates Articles 14 and 21 of the Constitution, covering equality before the law and the right to a fair and reasonable procedure.
The petition has argued that competition proceedings are in rem and have consequences extending beyond the enterprise under investigation. A settlement, it stressed, may affect market conditions, consumer interests and the rights of persons harmed by the alleged anti-competitive conduct.
Drawing an international comparison, the petition cited that the European Union, the United Kingdom and Singapore do not exclude judicial oversight of settlement orders. “The Settlement Regulations framed under Section 48A also fail to provide sufficient transparency, public participation, or enforceable mechanisms for objections by affected parties,” the petition stated.
