From high pitched litigation to quietly settling cases, the global technology giants are tweaking their approach towards anti-trust cases in India. Instead of moving multiple courts, these technology companies are now considering settling the anti-trust allegations levelled against them.
Google has already settled one of its anti-trust cases with the Competition Commission of India (CCI) and at least two more technology companies are in process of filing for settlements, two people with direct knowledge of the matter said. The development assumes significance as companies including Google, Meta(Facebook), Apple, and Amazon along with others, including Walmart Owned Flipkart, are facing CCI probes currently.
Market participants say it’s a win-win situation both for CCI and companies. Pendency of cases has been a major concern for CCI with many cases dragging on for years in courts before a conclusion.
For instance, CCI started investigating e-commerce companies in 2022 and so far, the regulator has not been able to pass the final orders. This is on account of more than two dozen cases filed by the platforms and their sellers across the country which delayed the proceedings until the Supreme Court last year ordered them to be clubbed before the Bengaluru High Court. Also, during settlement, CCI can recommend remedial measures to be implemented by the companies to ensure such issues don’t reoccur.
The companies, on the other hand, get to avoid litigation along with lesser penalty, say competition experts. Under the rules, if the company comes forward to settle allegations before the director general of the CCI submits investigation report, it will be subject to lesser penalty. It also reduces regulatory risk for the companies, say experts.
Emails sent to Apple, Amazon, Meta, Google, and Flipkart remained unanswered.
“The incentive to settle is primarily based on the CCI’s tough stance on tech cases and its inclination to unilaterally impose behavioural remedies with far reaching consequences. A settlement route may offer opportunity to suggest more balanced remedies to defending party, besides a lower settlement amount, than the penalty that would have been imposed otherwise," said Pranjal Prateek, partner at Khaitan & Co.
The CCI has been actively pursuing several significant cases and investigations against major big tech companies, primarily focusing on abuse of dominant position, anti-competitive practices, and data sharing policies. Most of the companies are facing multiple cases. To be sure, settlement can be instituted only in those cases where CCI orders have not been challenged in NCLAT or the Supreme Court.
The companies are also factoring their victory chances if they move the courts while deciding whether to settle a case or not, say legal experts.
“A party is likely to pursue the path of settlement if it assesses that the likelihood of the CCI’s finding of any contravention is unlikely to be reversed by the Courts, based on the evidence on record as per the report of the Director General,” said Subodh Prasad Deo, Partner at KBD Partners. “The settlement mechanism also offers an avenue to limit financial exposure as a settlement applicant is eligible for a 15% reduction in the penalty amount that the CCI would have otherwise imposed had it found the applicant to be in contravention of the Competition Act.”
The settlement scheme is a novel concept in the Competition market as it was introduced in the draft Digital Competition Bill of 2024.
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