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October 2, 2025

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Unpacking Commitment & Settlement in Competition Law

Commitment & Settlement Under the Competition Act

Over a span of three years, the CCI imposed penalties worth thousands of crores. But less than 2.5% of it was ever recovered. Why? Endless appeals, procedural slowdowns, and an enforcement system too bulky for its own good.

That’s exactly what the commitment and settlement mechanisms aim to fix: faster resolutions, fewer appeals, and more market correction with less courtroom drama. This article unpacks how they work, who can apply, what Sections 48A and 48B really mean, how India’s model compares globally, and where the cracks still show. If you’re unsure whether these tools are worth the risk, you’re in the right place.

Why were these tools introduced?

The Competition Commission of India has the authority to investigate, penalize, and issue orders. But when appeals stretch for years and less than 2.5% of penalties are actually recovered, it begs the question: what’s the point? That’s exactly what the 2019 CLRC report tried to solve. It advocated for non-adjudicatory tools, such as commitments and settlements, to help expedite case closures and alleviate the burden on regulators, courts, and companies. It wasn’t a new idea. The European Commission, the UK’s CMA, and Germany’s Bundeskartellamt had been using similar frameworks for years. The intent? Simple:

Intervene early
Correct the market
Skip the courtroom
Free up enforcement resources for bigger problems

Section 48A & 48B - How they work

There’s a fork in the road. One path is commitment, the other is settlement. Both help close a case faster, but the timing, terms, and risks look very different.

Section 48B: Commitment

Use this before the Director General (DG) submits their report.

You don’t admit guilt. You just offer a fix, behavioral or structural, that addresses the CCI's concerns.

If the CCI accepts it, the case ends. If not, it resumes where it left off.

Simple enough. But there’s no template, no feedback loop, and no appeal if your offer gets rejected.

Section 48A: Settlement

This comes after the DG’s report, but the final order.

Here, the stakes are higher. You might end up paying a reduced fine. And even though the law doesn’t spell it out, your willingness to settle could expose you to compensation claims.

Both routes are one-time offers. The CCI decides if they’re good enough. If not, you’re back to square one. No second chances.

Commitment vs Settlement vs Leniency

Same goal. Different paths. Here’s how these three tools stack up:

Feature	Commitment	Settlement	Leniency
Timing	Pre-DG report	Post-DG, pre-order	Any Stage (preferably early)
Admission of Guilt	Not required	Not formal, but implied	Mandatory
Fines	No	Yes (reduced)	Yes (reduced or waived)
Appeal Rights	None	None	None on leniency decision
Third-Party Rights	Limited discretion	Compensation risk	Rarely involved

Quick takeaway:

Use commitments if you want an early, quiet exit.
Choose a settlement if you’re willing to pay and close the case.
Opt for leniency if you’re the first in a cartel and want to walk away clean.

Who can Apply (And who can’t)

You can apply for a commitment or settlement if the case involves:

Abuse of dominance (Section 4)
Vertical restraints (Section 3(4))

You can apply if you’re being investigated for a cartel (Section 3(3)).

That’s despite global regulators, including the European Commission and UK CMA, accepting cartel settlements alongside leniency.

The Standing Committee backed cartel inclusion. But the Ministry of Corporate Affairs said no, arguing that leniency already covers it.

Another limitation? The regime isn’t retroactive. If your case was already underway before the regulations were notified, you’re locked out.

That’s a lost chance to close older,low-impact cases and make this mechanism actually ease the CCI’s backlog.

Gaps and Grey areas in the regime

The framework’s new. The questions aren’t.

Still on the hook after the settlement?

Under Section 53N, third parties can file for compensation even if there’s no official finding of guilt. Settling doesn’t mean you’re safe; it just closes the CCI’s case.

Disclosure was risky, now fixed

Earlier drafts let the CCI reuse your commitment or settlement statements if things fell through. The final regulations now protect disclosures made “without prejudice” but only after pushback.

No room for partial settlements

Got five charges and only agree with two? Too bad. You can’t settle part of the case and fight the rest. It’s all or nothing unless you’re offering a commitment, which still allows partial scope.

Waiving rights upfront

Applicants must waive their right to appeal, file writs, or challenge the outcome before knowing how the CCI will rule. That’s a big legal risk few are eager to sign off on.

Bottom line?

The tools are helpful, but they don’t come risk-free. And they definitely don’t come cheap.

India vs Global Practice

Global regulators run on flexibility.

In the EU and UK, there’s room to negotiate timing, involve market players, and adjust based on facts. Commitments can be tested with third-party input before being accepted.

India?

Still locked into rigid phases, commitments before the DG report, settlements after.

Third-party views? Optional. Not a requirement.

There’s no clarity on how fines are reduced, how “cooperation” is weighed, or what qualifies a proposal as acceptable. That lack of transparency can scare off applicants more than the process itself.

The one shift in India’s favor? CCI’s restored power to fine based on global turnover. That adds pressure and bargaining power.

But adoption won’t depend on the law alone. It’ll depend on whether the process actually feels fair, fast, and predictable in practice. Right now, that’s still a question mark.

Conclusion

You’ve now got a clear picture of how commitment and settlement tools work and where they still leave businesses guessing. Here’s what to keep in mind moving forward:

Use commitments early to avoid drawn-out investigations, but prep your proposal carefully. You don’t get a second chance.
Settlement may close the case, but it could open the door to compensation claims. Read the fine print before you sign.
Cartels are still excluded, even though global regulators let them settle. For now, leniency is your only route.
Disclosure risks are lower, thanks to the “without prejudice” fix, but the appeal waivers are still a legal gamble.

If you’re looking to automate compliance checks and vendor workflows before the CCI ever knocks, Swipe helps you stay ahead without drowning in red tape.

FAQs

1. What is Section 48A of the Competition Act?

Section 48A allows enterprises under investigation to offer a settlement proposal after the DG report is submitted but before the CCI passes its final order. The CCI can accept it with or without a fine, but there’s no appeal.

2. What is Section 48B of the Competition Act?

Section 48B enables parties to offer commitments before the DG report stage. It focuses on market correction, no admission of guilt, no fine. If accepted, the investigation is closed.

3. Can a company apply for both commitment and settlement?

Not in the same phase. Commitments are pre-DG report; settlements are post. But if a commitment is rejected, there’s no bar on submitting a settlement later if you’re still within the timeline.

4. Are cartels eligible for settlement or commitment?

No. As of now, cartel cases are excluded from both mechanisms. Only vertical restraints and abuse of dominance cases qualify.

5. Can third parties seek compensation after a settlement?

Yes, under Section 53N, the third party may file for compensation even without a formal finding of guilt. This creates legal uncertainty for companies that choose to settle.

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