A Discount Too Small: Why Corporate India is Passing on the CCI’s Olive Branch

The 2023 overhaul of the Competition Act, 2002 (Competition Act) was celebrated as a watershed moment, promising to offer a credible alternative to long enforcement timelines with a nimble Settlements and Commitments (S&C) framework. The value proposition was compelling: resolve disputes early through commitments or blunt the sting of heavy penalties through settlements. However, as of early 2026, corporate uptake has been negligible. Aside from the lone Google Android TV settlement in April 2025, the mechanism has failed to gain traction and the industry remains in a state of cynical paralysis.

S&C mechanism at a glance: Two paths to finality

The Competition Commission of India’s (CCI) olive branch is bifurcated into two distinct routes, depending on when a company chooses to come to the table:

• Commitments (Pre-Investigation): This early-exit option allows companies to address concerns before the Director General (DG) launches a full-scale, resource-heavy investigation. By offering voluntary modifications to their business conduct, firms can resolve the matter without a formal finding of guilt or any financial penalty.

• Settlements (Post-Investigation): This path opens only after the DG’s report is submitted but before the CCI issues a final verdict. While it avoids a formal admission of liability, it carries a financial cost, albeit with a 15% discount on the potential penalty. Critically, unlike commitments, a settlement order can act as a trigger for subsequent private compensation claims, a risk that may often outweigh the modest discount.

Incentive gap: Why the CCI’s olive branch is being left on the table

For corporate boards, shifting from a litigation-first strategy to the S&C regime is driven not by conscience but by evidence, clear, empirical proof that the risk of penalty outweighs the regime’s benefits. At this early stage, Indian boardrooms appear reluctant to act, given the absence of precedent on how the CCI will handle S&C applications, interpret “full disclosure,” or how the NCLAT will assess follow-on damages.

For now, the “incentives” fail the balance-sheet test for four key reasons:

• Timelines that discourage resolution: Under the S&C regime, companies have just 45 days to file a settlement application after receiving the DG report, with scope for discretionary time-extensions. Commitments fare no better: the window remains fixed at 45 days from the CCI’s initiation order directing investigation. For large enterprises, this timeframe is barely sufficient to assess evidence, quantify exposure, test remedies internally, secure board approvals, and evaluate litigation risk. The result is predictable, either no application at all, or hasty, defensive submissions that serve neither regulator nor regulated.

• The litigation dividend: In the Indian context, the appellate process often operates as a deliberate financial strategy. By appealing a CCI order, companies can defer massive penalty payments for several years, thereby preserving cash flow and balance-sheet flexibility during the pendency of litigation. To its credit, the legislature has sought to curb this behaviour by introducing a mandatory pre-deposit of 25% of the penalty amount as a condition for appeal, with the aim of discouraging frivolous challenges and ensuring that only serious appeals proceed. Yet, in practical terms, this reform blunts but does not eliminate the litigation dividend. The modest 15% discount, even when combined with savings in litigation costs, represents a weak trade-off for the total forfeiture of judicial review.

• Shadow of global turnover: The stakes were raised exponentially when the CCI shifted toward computing penalties based on global turnover. While Penalty Guidelines exist, the “worst-case scenario” remains a terrifying prospect (and is currently being challenged in the Delhi High Court). When boards crunch the numbers, they aren’t looking at the 15% they might save; they are looking at the 85% they may potentially be required to pay upfront after arriving at a settlement.

• Trojan horse of private claims: The board of directors must also account for hidden costs. Choosing a settlement may inadvertently trigger a wave of private claims. Even without a formal “finding of guilt,” a settlement order can supply a factual foundation that claimants may use to sidestep the burden of proving a contravention from scratch, leaving the door wide open to substantial civil damages.

Learnings globally and the case for a sweeter deal

The sluggish start to India’s S&C regime stands in stark contrast to jurisdictions elsewhere, where negotiated outcomes have graduated from an alternative to the default norm. In the United States, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) resolve approximately 70% to 90% of civil antitrust cases via consent decrees. For companies, the certainty of a negotiated settlement is a vital defensive manoeuvre against the devastating threat of treble damages that often follow a courtroom defeat. The European experience tells a similar story of pragmatism. The European Commission successfully utilises its commitment decisions to resolve nearly half of its abuse of dominance probes, without imposing any financial penalty at all.

Way ahead: a calibrated path

To improve the commercial viability of the S&C framework, two calibrated reforms merit consideration:

First, institutionalise structured pre-filing engagement: a formal consultation window, modelled on the pre-filing interactions already undertaken by the CCI in the combination review process, and anchored in defined timelines and procedural safeguards, would enable parties to test potential commitments or settlement terms before submitting a formal application. This approach would align India’s framework with established international practice, where early dialogue is integral to negotiated outcomes. For instance, the UK Competition and Markets Authority allows parties to engage with the case team during investigations to explore settlement possibilities without adverse inference; in the United States, the DOJ and the FTC conduct substantive settlement negotiations with parties during investigations; and within the European Union, parties may engage early with case officers of the European Commission to explore commitment decisions through structured dialogue.

Second, recalibrate the economic incentive: increasing the settlement discount, for instance, toward a 25% ceiling, could more proportionately reflect the strategic trade-offs involved, including the waiver of appeal rights and potential exposure to follow-on claims. A stronger economic incentive may help position negotiated resolution as a more commercially viable alternative to prolonged litigation.