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The Competition Commission of India (CCI) is set to keep the amount to be paid by businesses for settling anti-trust cases under a proposed scheme at a much lower level than the actual penalty that they will have to pay otherwise.

The idea is to incentivise businesses to settle cases of anti-competitive behaviour and correct them without delay rather than letting cases languish in courts while market distortion continues.

The settlement amounts are likely to be much lower than the penalty levied currently, which is at 10% of the average turnover of a business for three preceding financial years.

A person familiar with discussions in the government said that if the settlement amount is at 9-10% of revenue, then businesses may prefer to move court and fight the case. “The settlement amount has to be substantially lower. We have to sufficiently incentivize parties to opt for settlements so that market correction is achieved as early as possible," said the person.

The urgency for the government to offer a framework for quick resolution of cases comes in the backdrop of several past cases ending up in legal battles leading to non-recovery of penalties and delays in changing corporate conduct. A smaller settlement amount subject to conditions to be specified by the CCI is the solution, said the person on condition of anonymity.

CCI has in the last five years imposed penalty of over 4,300 crore on 24 companies for various violations of the competition law. Of these, only 198 crore has been paid by the companies with tribunals or courts applying stay on recovery or setting aside the orders.

Emails sent to the corporate affairs ministry and to CCI on Thursday remained unanswered till press time.

The scheme of ‘settlements and commitments’ meant for quick resolution of cases will be implemented after the Competition (Amendment) Bill tabled in Parliament earlier this month becomes law. The Bill is currently under review by the parliamentary standing committee on finance and is expected to be taken up for passage in the upcoming winter session.

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