The Competition Amendment Act, 2023 amended the Competition Act, 2002 ('Act'), Section 48A, allows an enterprise to settle a case after the Director General ('DG') submits an investigation report. The enterprises can now pay a settlement amount and offer remedies, after which the Competition Commission of India ('CCI/Commission') closes the case.

The Settlement Regulations, 2024 make this process clear. Regulation 7(1) says two things at once. First, the settlement order “shall not be construed as a finding of contravention.” Second, this rule applies “without prejudice to section 53N.”

This creates a significant interpretative difficulty. Section 53N of the Act lets people claim compensation for losses caused by a contravention of the Act. The same section now includes settlement orders under Section 48A as a possible basis for such claims. Yet the settlement order itself refuses to call the conduct a contravention. The statutory framework preserves the possibility of compensation claims while dispensing with a formal finding of contravention in the settlement order.

How the Two Provisions Work

A case before the CCI begins after a complaint is filed by any claimant or when the CCI acts Suo motu. It is followed by forming a prima facie opinion by the Commission as to the alleged contravention of the Act by the enterprise. Once the prima facie opinion is formed, the DG is directed to carry out an investigation into the matter. The report by the DG regarding the alleged contravention is prepared and submitted to the Commission. After which the parties can file objections or replies against the DG's report. Then comes the final stage where the CCI, after hearing the parties, passes the final order, which can be appealed before the National Company Law Appellate Tribunal ('NCLAT').

Section 48A lets an enterprise apply for settlement only after the DG's report and before the Commission's final order. The Commission may accept the proposal. It looks at the nature, gravity and impact of the alleged conduct. Once accepted, the order is final. No appeal lies to the NCLAT under Section 53B.

Section 53N allows the government, an enterprise or any claimant to claim compensation. The claim can arise from the Commission's findings or from a settlement order under Section 48A. The Tribunal can order payment for loss or damage caused by a contravention of Chapter II of the Act, or as a result of a settlement order. The CCI does not entertain the compensation application, and it needs to be filed before the NCLAT.

Taken together, the two provisions make the issue clear. A claim under Section 53N requires a contravention. However, the settlement order specifically states that no findings of contravention have been made. Although the phrase "without prejudice to Section 53N" appears to preserve the option of obtaining compensation, it does not make clear how such a remedy might be effectively pursued. In specific terms, the provision is silent on the aspect of ascertaining the claimant's liability to prove the essential link concerning the loss incurred and the alleged violation when the Commission's final order makes no finding of contravention.

The Regulatory Language Creates Confusion

There is a purpose behind Regulation 7(1). It does not make the enterprise formally accountable for the alleged contravention; it makes the settlement process more agreeable to all the parties involved. As there is no formal admission of contravention in the order of the Commission, the enterprises are more inclined to settle the case. This regulation allows private parties to pursue compensation claims even in the absence of a formal order of contravention.

Despite allowing an application for compensation against the settlement order, the regulation is not clear in practical terms as to how such claims can be pursued. The DG's report is not the Commission's final finding, though it is a part of the record. There is no formal acceptance or incorporation of the DG's finding in the settlement order, and the settlement proceedings come to an end without such a formal finding. In Section 53N proceedings, the claimant relies upon the Commission's final finding of contravention as the basis for seeking compensation. Where there is no formal finding of the contravention, the claimant may be required to establish the case of contravention independently. Section 53N explicitly puts a bar on NCLAT to carry out a fresh examination of the Commission's finding whether any violation has taken place or not. There comes a procedural difficulty as the Explanation (a) & (b) to Section 53N states that NCLAT cannot undertake a fresh and comprehensive investigation into the alleged conduct and the enquiry can only be conducted for determining the eligibility and quantum of compensation Its function under Section 53N is primarily concerned with determining compensation where liability has already been established.

The Only Real Example So Far

The first and only settlement order in the Google Android TV case was issued on April 21, 2025. The DG determined that Google had misused its dominating position. Google then recommended certain remedial steps and agreed to pay a settlement amount. The proposal was accepted by the Commission by a majority vote, and the proceedings were closed. The order was passed under Regulation 7(1), however, it made no findings that Google had violated the rules.

One member of the Commission disagreed with the remedies offered. However, the majority order did not consider the consequences of the phrase "no finding of contravention" in future compensation cases. As of now, no application for compensation has been filed in connection with this settlement. The legal position therefore remains unresolved.

Consider a purchaser of an Android TV device who claims to have paid a greater price or had fewer options as a result of Google's actions. If the purchaser seeks compensation under Section 53N, Google may argue that the Commission did not record any findings of non-compliance.

The claimant may contend that the statutory scheme permits compensation claims arising out of settlement orders, with Regulation 7(1) supporting the continuation of such a remedy. The issue, therefore, is whether this interpretation can be reconciled with the contrary view that a settlement order does not establish a contravention. The NCLAT will have to resolve this question when it arises for consideration. Currently, the statute does not provide a clear answer.

Why This Ambiguity Matters

This uncertainty gives benefits to the enterprises that settle. Since there is no formal finding of liability, there is reduced reputational harm and a meagre possibility of such an admission being used in subsequent litigation. A new challenge arises for claimants when they must establish the full contravention themselves. Such private enforcement would be counterproductive, as the claimant would take more time to establish the case and would also be more difficult and expensive. This will in turn dissuade the potential claimants from filing compensation claims. This weakens the protection that Section 53N intends to provide to the private claims, even though the settlement process enhances the efficiency and finality in the public enforcement system.

The settlement application is not devoid of any further challenges. Section 48C of the Act empowers the Commission to withdraw a settlement if the enterprise fails to comply with the agreed terms, circumstances change significantly, or private enforcement becomes more difficult. When the Commission revokes the settlement for such non-compliance, it would restart the proceedings, which may result in a finding of a contravention. However, this is not a dependable remedy for private parties who have already suffered loss, as this mechanism depends upon the events occurring in the future.

Further, there is no statutory framework governing the evaluation of the settlement order in appeal since the settlement orders are not appealable to the NCLAT. The claimant can still take recourse to constitutional remedies that may be available; however, they may not provide a practical method for resolving ordinary questions concerning the interpretation and execution of these clauses.

Possible Ways Forward

Possibly, there can be two readings of the statute. First, Section 53N claims can be initiated against the settlement claim. The claimant would then only have to establish the loss suffered and demonstrate its connection with the conduct covered by the settlement. If this is the situation, the Commission's acceptance of the settlement claim could be viewed as an official acknowledgement of the alleged contravention. Second, the claimant has to show the contravention independently by relying on the DG's report and other supporting evidence. In such a situation, the unambiguous language “no finding of contravention” would still be applicable.

The first reading makes the settlement similar to an admission which the law intended to prevent through clear wording. The second reading reduces the express reference to settlement orders in Section 53N to nearly nothing. Both the readings are imperfect. Therefore, certain clarifications are still required. The Commission can clarify by publishing instructions clarifying the validity of a settlement order and the DG's report in subsequent compensation actions. Likewise, the legislature can also amend the existing provision to specify whether the settlement orders could be treated as substantive evidence, conclusive evidence, prima facie evidence, or mere background material.

Without these clarifications, the underlying ambiguity would hinder the settlement process and possible compensation claims. The claimant, on the one hand, seeking compensation, may find it difficult to ascertain the evidentiary value of their claims. The company, on the other hand, may find difficulties in assessing its exposure to subsequent private claims. As of now, no compensation application has been filed against the settlement order; therefore, it becomes prudent on the part of NCLAT to resolve the issue that has yet to be clearly addressed by the Regulation or the Act. A clear relationship between the settlement claim and settlement order must be established; otherwise, the practical value of settlement will remain constrained.

Author Dimpy Das is an Advocate based in Assam & Ashutosh Rajput is a Ph.D. Scholar at National Law University Odisha (NLUO). Views are personal.