The Antitrust ‘Kill Switch’: Encouraging Strategic Litigation?

Taken at face value, it sounds like a welcome dose of pragmatism. In a country infamous for its interminable legal battles, the recent decision of the Supreme Court in the Ericsson matter suggests a move towards greater efficiency in antitrust law. Effectively, the Supreme Court decided that if a company files a complaint with the Competition Commission of India (CCI) and later decides to settle privately with the accused firm, that settlement can be grounds to terminate the CCI’s formal inquiry.

This appears to be a win for efficiency, allowing parties to resolve disputes and saving the CCI precious time and resources. But this seemingly sensible procedural tweak hides a perverse incentive. Far from reducing litigation, this new approach risks turning the CCI into a tactical tool for commercial negotiation, potentially leading to a flood of strategic complaints.

For years, the doctrine in Indian competition law was clear. Once an informant presented its case and the CCI launched a formal inquiry, the matter was no longer a private squabble. It became a proceeding in rem, i.e. a matter of public interest concerning the entire market. The CCI took over the dual role of investigator and adjudicator, with the original informant no longer a key player. Whether the informant reconciled with the defendant was irrelevant; the inquiry into potential market-wide harm would continue.

This made approaching the CCI a serious, almost irreversible step. An informant’s leverage was front-loaded: “Settle with us now, or we go to the CCI and the outcome will be out of both our hands.” The recent judicial shift fundamentally rewires this dynamic. It hands the informant a powerful “kill switch” to the entire inquiry.

The strategic advantage this creates is enormous. A formal CCI inquiry is a daunting prospect - it is expensive, time-consuming, and carries significant reputational risk for the company under investigation. Previously, an “opposite party”, once under investigation, had no choice but to see the process through. Now, at any stage of the lengthy and arduous inquiry, the informant can offer the company under investigation an exit ramp: agree to our terms, and we can make this all go away.

This transforms the very nature of an antitrust complaint. It is now a powerful tool to gain leverage in a commercial dispute. The incentive is no longer merely to win a case, but to initiate one to force a settlement. This could result in an increase in filings, with some firms launching complaints not with the primary goal of seeing a final CCI verdict, but of putting a rival under the pressure of an inquiry to extract better contractual terms, lower prices, or other commercial concessions.

The danger is twofold. First, it risks clogging the CCI’s dockets with cases that are essentially private commercial disputes masquerading as public competition issues. This diverts the CCI’s finite resources from tackling systemic, anti-competitive behaviour that truly harms the market and consumers. Second, it privatizes public justice. A genuine case of market abuse that harms numerous players could be settled and withdrawn for the benefit of the original informant alone, leaving the underlying anti-competitive conduct unchecked, to potentially harm others.

While promoting settlements is a laudable goal, it must not come at the cost of undermining the CCI’s public mandate. It also undercuts the newly introduced settlements and commitments mechanism, where the CCI stays in charge throughout, ensuring the public interest remains paramount. Now, companies under investigation have a strong incentive to sidestep the CCI altogether and move directly to bilaterally settle with informants.

The CCI can still use its own powers tactically, by taking up the matter suo motu, to dull the impact of this jurisdictional blow. However, the Supreme Court may not take a charitable view of such tactical behaviour by a regulator. So for now, this new path in India, born from a desire for efficiency, may lead to a far more congested and tactical litigation landscape. A procedural shortcut could risk leading us down a long and winding road, potentially weakening the very institution designed to keep our markets fair and competitive.