The latest amendments to the Competition Act have reduced the scope for anti-trust litigation and paved the way for quicker market corrections, but some loopholes still remain, experts feel. Even in cases where a case is settled by the regulator, the affected party could approach the appellate forums for damages from the market distortion caused by the errant firm or firms, they point out.
For instance, tech giant Google got settlement of its Android smart TV case with Competition Commission of India (CCI) for over Rs 20 crore. This was first-ever antitrust case which was “settled” under the newly-amended Act.
Even though the CCI order in this case signaled a regime of quicker decision-making, such cases might still be open to litigation. “This is a tricky area because even though the case is settled, the parties affected by market distortion can approach the National Company Law Appellate Tribunal and ask for damages,” said a senior competition lawyer.
In the normal course, after a CCI order is passed, it can be challenged in NCLAT followed by the Supreme Court. Once the case goes to the apex court, it could take years before the violation under the competition act can be proved. So it would take a long time before the parties affected by the market distortion by the erring company could get damages.
However, in the case of settlements, the affected parties can directly go to NCLAT (post settlement) and claim compensation, and the tribunal order is not appealable to the apex court. Though this would therefore be relatively easier and faster closure of the case, litigation delays are still possible.
Another concern with settlement procedure is the lack of clarity on how the disclosures made during the settlement will be used for other concurrent cases. For instance, in the Google’s Android smart TV case, the complaints were also filed against Xiaomi Technology India and TCL India Holdings for anti-competitive conduct.
“It would be interesting to see the impact of this settlement order over the remaining parties who were involved in the initial complaint,” said Modhulika Bose, partner (competition law), Chandhiok and Mahajan Advocates and Solicitors.
Experts said that the settlement orders can have domino effect in other jurisdictions. “For instance, the regulators in other countries/regions can ask companies to propose similar remedies in their respective areas,” said the senior lawyer quoted above.
Bose said that the Google order sets an encouraging precedent by building a consensus within a challenging timeline, but there’s a need to have a continued emphasis on building stronger procedural protections so that more companies can come forward.