CCI Issues Regulations for Filing Commitment Applications and Proceedings [Read Notification]

The Competition Commission of India ( CCI ), vide notification no. 03 of 2024 dated 6th March 2024 has issued regulations for filing commitment applications and proceedings. The regulations may be called the Competition Commission of India (Commitment) Regulations, 2024.

A “Commitment Application” refers to an application filed by a Commitment Applicant to the Commission under these regulations, presenting commitments concerning proceedings commenced for the alleged contraventions outlined in the order issued by the Commission under sub-section (1) of section 26 of the Competition Act, specifically referring to sub-section (4) of section 3 or section 4 of the Competition Act.

Application for Commitment

Submission of Application : A Commitment Applicant must submit a written application to the Commission, along with the specified fee. The application should include comprehensive details such as the Applicant’s name, legal status, registration number, contact information, and website address if applicable.

Information Requirements: The following information are required for applications:

1. Details of the authorised representative(s) of the Commitment Applicant, including their contact details.
2. Proof of payment of fees to the Commission. Prima facie opinion of the Commission regarding the Commitment Applicant’s case.
3. Full disclosure of facts regarding the alleged contraventions of the Act.
4. Details of commitments offered, addressing contraventions and competition concerns.
5. Previous history of contraventions, settlements, or commitment applications by the Applicant.

Timeline for Submission: The Commitment Application must be filed within 45 days from the receipt of the Commission’s order. An additional 30-day period may be granted by the Commission under exceptional circumstances.

Rectification of Defects: If the application is incomplete or non-compliant, the Applicant may be asked to rectify defects within ten working days.

Withdrawal of Application: The Commitment Applicant can withdraw the application at any time before the Commission passes an order.

Rejection Criteria: No Commitment Application will be considered if any amount due under the Act is recoverable from the Applicant.

Consideration of proposal for Commitment

Consideration Process: The Commission reviews the complete Commitment Application within 7 working days of receipt. If the Commission is unsatisfied with the commitments, it requests revisions within 15 working days.

The inquiry against the Commitment Applicant may be suspended until a final decision on the application is made. The objections and suggestions are invited, and comments are considered.

Decision Making: After evaluating the alleged contraventions, commitments, and received feedback, the Commission:

1. Accepts the commitments and closes proceedings.
2. Rejects the application and resumes the inquiry.
3. Requests revisions if unsatisfied, allowing the Applicant to submit within 30 days.
4. Accepts revised commitments and closes proceedings.
5. Rejects revised commitments and resumes the inquiry.

Failure to Comply: If the Commitment Applicant fails to submit revisions or provide requested information, the application may be rejected, and the inquiry resumed.

Timely Conclusion: Commitment proceedings must be completed within 130 working days of receiving a complete application, with the possibility of extensions if necessary.

Clarifications and Information: The Commission may seek additional clarification or data from the Applicant, to be provided within specified timelines.

Grounds for Rejection: Applications may be rejected if the Applicant fails to respond to communications or violates undertakings as per Schedule I.

Opportunity to be Heard: Before rejecting an application, the Commission grants the Applicant an opportunity to be heard.

Communication of Rejection: Rejection of an application is communicated to the Applicant, who remains bound by undertakings as per Schedule I.

Invitation of objections and suggestions on proposal for commitment

Invitation Process: The Commission offers an opportunity to concerned parties, the Director General, or any other relevant party to submit comments, objections, or suggestions within 21 days.

A summary, excluding confidential information, is shared, encompassing the Commission’s prima facie opinion, competition concerns, alleged contraventions, and commitments offered by the Commitment Applicant.

Public Participation: The Commission may also invite the public to submit comments, objections, and suggestions within 21 days by publishing the summary on its website.

Details Required: Comments, objections, and suggestions should include:

1. Name, contact details, and authorised representative(s) information.
2. Authenticated statement supported by relevant documents.
3. Concise summary not exceeding four pages.
4. Any additional information aiding the Commission in determining commitment terms.

Nature and effect of commitment order

The Commission’s order accepting commitments doesn’t indicate a finding of contravention against the Commitment Applicant. Filing a Commitment Application or receiving a commitment order doesn’t affect the inquiry under section 26 of the Competition Act concerning alleged contraventions involving other parties not part of the commitment proceedings.The commitment order is conclusive and obligatory for the Commitment Applicant.

Assessment of the terms of the commitment

The Commission considers various factors while evaluating the commitment terms:

1. Nature, duration, and extent of alleged contraventions.
2. Effectiveness of commitment terms in addressing competition concerns and alleged contraventions, ease of implementation, and monitoring.
3. Promotion of market contestability by commitment terms.
4. Procedural efficiencies, self-executing terms, and timely correction of market distortions.
5. Past compliance history of the Commitment Applicant, including any prior violations or pending investigations.
6. Measures taken by the Commitment Applicant to rectify past violations or prevent future ones.
7. Any other relevant factors deemed appropriate by the Commission based on the case’s specifics.

Fee under sub-section (1) of section 48B of the Act

Each application received by the Commission under sub-section (1) of section 48B of the Act must be accompanied by proof of payment of non-refundable fees as follows:

Fee Structure: The fee structure for applications under sub-section (1) of section 48B of the Act varies based on the Commitment Applicant’s turnover:

1. Rs. 2,50,000 for turnover up to Rs. 50,00,00,000.
2. Rs. 10,00,000 for turnover exceeding Rs. 50,00,00,000 and up to Rs. 500,00,00,000.
3. Rs. 50,00,000 for turnover exceeding Rs. 500,00,00,000.

Payment Methods: Payment can be made via demand draft, pay order, or banker’s cheque payable to “Competition Commission of India ( Competition Fund ), New Delhi,” or through Electronic Clearance Service ( ECS ) by direct remittance to the specified bank account.

Implementation and Monitoring of Commitment Order

If the Commission deems it necessary to monitor the implementation of the commitments, it has the authority to appoint agencies for oversight. These appointments are made in accordance with the Competition Commission of India (General) Regulations, 2009, and are subject to specific terms and conditions set by the Commission.

Revocation of the Commitment Order

If a Commitment Applicant fails to adhere to the order issued by the Commission under section 48B of the Competition Act, or if the Commission discovers that the Applicant has not provided complete and accurate information during the commitment proceedings, or if there has been a significant change in the circumstances, the order issued under section 48B of the Act will be revoked.

However, before forming an opinion on this matter, the Commission will provide the Commitment Applicant with an opportunity to explain within 15 working days from the date of receiving the notice, why the Commission should not conclude that the Applicant has failed to comply with the order, failed to provide complete and accurate information, or if there has been a significant change in circumstances.

In case of revocation as per the above regulation, the Commitment Applicant will be liable to cover the legal costs incurred by the Commission, as determined by the Commission, up to a maximum of one crore rupees, payable as per regulation 8(2).

The legal costs imposed on a Commitment Applicant are recoverable through the procedures outlined in section 39 of the Act, in conjunction with the Competition Commission of India ( Manner of Recovery of Monetary Penalty ) Regulations, 2011, similar to the recovery process for penalties imposed under the Act.

Additionally, if the commitment order is revoked as per the mentioned regulation, the Commission may reinstate or initiate an inquiry or investigation against the Commitment Applicant concerning the subject matter for which the order under section 48B was issued.

Power to Use Information

If the Commission revokes a commitment order under section 48C of the Act, it can use information provided by the Commitment Applicant. If a Commitment Application is rejected or withdrawn, the Commission can use information from other sources.

The Commission can also use information provided by the Commitment Applicant against other parties involved in the inquiry. Facts established in ongoing or concluded proceedings will be deemed admitted by the Commitment Applicant for the proceedings under these regulations.

Partial commitments offered not to affect inquiry in respect of other alleged contraventions

If a Commitment Application addresses only certain contraventions identified by the Commission in its order under section 26(1) of the Competition Act, the inquiry regarding the remaining contraventions will proceed unaffected.

Request for Confidentiality

During commitment proceedings, any request for confidentiality regarding information or documents should follow the procedure outlined in the Competition Commission of India (General) Regulations, 2009, subject to amendments. The Commission will duly consider such requests in accordance with the provisions of the said regulations and section 57 of the Competition Act.

During commitment proceedings, only the Informant and the Commitment Applicant are eligible for inspection and certified copies of submitted documents, with provisions for confidentiality as per regulation 35 of the Competition Commission of India (General) Regulations, 2009.

Inspection and certified copies of comments received under regulation 5 are allowed after the specified 21-day period. In situations not addressed by these regulations, the Commission can determine the procedure and resolve any implementation doubts or difficulties through circulars or guidelines, with its decisions being binding.

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