A Procedural Leap, A Substantive Stumble: Interrogating India’s First Competition Settlement

Introduction

On 21 April 2025, the Indian competition law landscape witnessed a watershed moment. The Competition Commission of India (CCI) accepted Google’s settlement proposal in the Kshitiz Arya and Another v. Google LLC and Others (Case No. 19 of 2020) (the order),[1] marking the country’s first-ever settlement order under the newly minted Section 48(A)(3) of the Competition Act, 2002 (the Act).[2] This Section specifically empowers the CCI to accept settlement proposals at any stage of the inquiry, subject to certain conditions.

The order arose from allegations that Google’s licensing terms for smart TVs limited competition in the Android ecosystem, making it an apt candidate to test the practical contours of this new provision. It is more than a resolution to a dispute with a Big Tech firm; it is the first test of India’s ability to balance prompt enforcement with substantive justice and negotiated compliance with real market correction.

The order closes a file but opens a critical debate: is this a pragmatic victory for an efficient competition regime, or a soft compromise that allows a dominant player to retain its market power? This blog evaluates the order, situates it within global and domestic contexts, and interrogates its profound implications for India’s competition jurisprudence.

Why Settlements Exist in Competition Law

The need for settlement mechanisms exists due to institutional problems plaguing the CCI. Despite relying on a conciliatory and voluntary enforcement structure, settlement mechanisms are not a regulatory weakness.[3] Since Antitrust investigations are protracted, resource-intensive, and uncertain, settlements offer a method to resolve disputes efficiently and promote compliance without incurring the costs of litigation. These mechanisms aim to secure commitments that remedy anti-competitive behaviour through feasible and structured solutions.

This philosophy is also well-established globally:

• The United States (US) has used ‘consent decrees’ under the Sherman Antitrust Act for over a century to curb monopolistic practices.[4] The landmark case of United States v. Microsoft Corporation,[5] for instance, used a consent decree to reshape the browser market, demonstrating that a well-crafted settlement can effectively dismantle anti-competitive structures. The US’s settlement mechanism oversees cartels, which requires the offender to admit guilt of the offence.[6]

• The European Union (EU) has long used settlements to discipline cartels and, more recently, to recalibrate Big Tech conduct. The EU model includes offering a settlement mechanism to cartels and abuse of dominance.[7] Under the forward-looking Digital Markets Act,[8] the EU imposes ex-ante obligations on designated ‘gatekeepers’, using settlement-like negotiations to promote fair competition in digital markets before market harm becomes irreversible.[9] However, the EU’s experience also offers a cautionary tale. In Google v. Commission (Google Shopping),[10] for instance, behavioural remedies were widely criticised as ‘remedy-lite’ — failing to restore competition effectively.

In comparison, India’s newly introduced settlement and commitment framework represents a significant structural evolution. Unlike the mature regimes of the US and EU, India’s model emerges within a rapidly expanding digital economy where regulatory capacity and market power asymmetries are still evolving. Drawing such parallels is crucial to evaluating whether India’s system can strike a balance between deterrence and innovation in its early stages.

India Joins the Club: A New Settlement Regime

The issue of whether existing competition law frameworks are adequate to handle and govern the challenges and complexities introduced by the rapidly changing economic landscape is being increasingly discussed. The preceding regulatory framework relied on penalisation using monetary and preventive penalties, under Section 27 of the Act,[11] as the primary mode of enforcement of competitive practices. However, this led to a trend of low penalisation rates, revealing a glaring gap in the collection of monetary penalties by the CCI.[12]

India entered this global conversation with the Competition (Amendment) Act, 2023,[13] which introduced Sections 48A (settlement) and 48B (commitment),[14] empowering parties to propose remedies to resolve investigations. The framework, detailed in the CCI (Settlement) Regulations, 2024,[15] is designed with modern safeguards, including public consultations and market testing of proposals.

This new regime promised to transform enforcement efficiency. However, until this year, it had been an untested legal theory. The order, therefore, becomes the real-world test of whether India’s nascent settlement framework could deliver a credible and effective outcome. It sets the stage for potentially dictating the future of the settlement mechanism, both as a viable conciliatory option and, conversely, as a structurally inept solution.

The Order: Anatomy of a Dispute

The complaint, initiated in 2020, alleged that Google abused its dominance in the smart TV ecosystem through restrictive agreements with Original Equipment Manufacturers (OEMs) like Xiaomi Technology India Private Limited (Xiaomi) and TCL India Holdings Private Limited. These included the Television App Distribution Agreement (TADA), which governed access to the Google Play Store, and the Android Compatibility Commitments (ACC), which effectively barred OEMs from developing or selling devices running on ‘forked’ versions of Android.

The Director General’s (DG) investigation confirmed that Google unfairly tied the ACC with the TADA, mandated the pre-installation of its apps, restricted access to vital apps, and limited technical development by preventing OEMs from innovating with ‘forked’ Android versions, thereby stifling innovation and foreclosing consumer choice.

The Settlement: A Pragmatic Resolution or a Missed Opportunity?

Facing the DG’s report, Google opted for a settlement. Its proposal, filed in May 2024, contained several key commitments:

• A ‘New India Agreement’ would offer a standalone, paid license for the Google Play Store, decoupled from mandatory app pre-installation.

• The ACC requirement would be waived, allowing OEMs to sell devices without Google apps and develop devices running on competing or ‘forked’ operating systems.

• The proposal would be valid for five years, with Google agreeing to pay a settlement amount of INR 20.24 crores and submit annual compliance reports.

The CCI’s majority accepted this proposal, reasoning that it injected flexibility into the market. However, this optimism was powerfully challenged by a dissent from Member Anil Agrawal, who argued that the settlement was fundamentally flawed. His critique highlighted several points:[16]

• The anti-competitive TADA is not being eliminated. Instead, it co-exists as a free option alongside the new, paid license. This creates a powerful incentive for OEMs, especially smaller ones, to stick with the restrictive status quo rather than pay for freedom.

• Merely reminding OEMs of their ability to use the open-source Android system is not a meaningful remedy. Given the strength of network effects and consumer demand for the Play Store, such assurances have little impact on altering competitive dynamics.

• The settlement failed to address the DG’s findings on the mandatory placement of Google-affiliated buttons on TV remotes, a key lever of dominance.

• By making the pro-competitive option a paid one, the settlement risks creating a two-tiered system where only larger, well-funded OEMs can afford to innovate, while smaller players remain shackled to the TADA.

The dissent, thus, argues that a settlement that preserves the architecture of dominance, while offering a costly escape hatch, does not truly cure the harm.

Critical Appraisal

The order represents a procedural leap forward, but it may also be a potentially substantive stumble.

The order is undeniably historic — India’s first operational settlement under the new regime. The process itself marked progress, with market testing and transparency built into the procedure. Theoretically, the settlement could increase OEM flexibility and even facilitate innovation in ‘forked’ Android systems, potentially leading to greater consumer choice.

However, its weaknesses loom large. The settlement lasts only five years, which is modest compared to the decade-long entrenchment of Android’s dominance. It also leaves unresolved key tying issues, such as the uninstallability of Google apps. Furthermore, the CCI disclaimed any role in supervising license fees, thereby exposing OEMs to pricing risks that may result in predatory pricing. The gravest weakness is the dual-contract structure. OEMs are faced with a Hobson’s Choice: either accept the free but anti-competitive TADA, or pay an unregulated fee under the pro-competitive New India Agreement — a choice between subjugation and imposing a cost on pro-competitive conduct.

Finally, the gaps are striking. There is no roadmap to help OEMs transition away from TADA, nor are there any structural remedies, such as the unbundling of Google’s core services. The settlement amount of INR 20.24 crores is a minor discrepancy for Google’s operations in India. Taken together, these omissions risk undermining the credibility of India’s settlement regime at its very first test. The very practice that is declared anti-competitive was allowed to continue in exchange for an offer of an alternate remedy.

Broader Implications: Market Impact and Regulatory Legacy

The settlement’s real-world impact remains uncertain. In a best-case scenario, with its significant market share and resources, a large OEM like Xiaomi might absorb the license fee to launch a device with a differentiated user experience. However, smaller domestic players may find the cost prohibitive, effectively locking them into the restrictive TADA and perpetuating the status quo. This could mean that the promise of more diverse and affordable smart TVs remains unfulfilled for consumers.

The order also has implications for the CCI’s institutional credibility. As India’s first settlement, it will shape perceptions of whether the Commission is a rigorous regulator or one inclined towards negotiated compromises. If settlements consistently produce cosmetic remedies, confidence in CCI’s ability to discipline Big Tech may erode. Conversely, if CCI uses this precedent to demand progressively stronger commitments, it can position itself as an innovative yet credible regulator in the digital economy.

Symbolically, this order marks the inauguration of India’s settlement regime and will serve as a precedent. It signals a regulatory preference for cooperation over confrontation with Big Tech. The critical question is whether this approach fosters genuine compliance or emboldens dominant firms to propose minimalist remedies for the most severe harms.

Conclusion and Way forward

Ultimately, this order inaugurates India’s settlement regime and will serve as a precedent. It signals the regulatory preference for cooperation over protracted confrontation. However, the settlement itself will be judged by its impact on the market in the years to come, not by the text itself. If it fails to stimulate real competition, it risks being remembered as a weak precedent, a ‘remedy-lite’ outcome. To prevent this, the CCI must adopt a more rigorous approach for future settlements:

• It must demand solutions that dismantle the very structure of a company’s dominance, rather than accepting simple behavioural promises that are difficult to monitor and easy to evade.

• Settlements requiring competitors to pay a fee for the freedom to compete fairly should be rejected, as they serve no distinct purpose.

• Settlement amounts must be substantial enough to serve as a real punishment, reflecting the violation’s severity and the infringing company’s financial might.

If guided by these principles, settlements can mature into a credible tool of market correction and innovation. If not, they risk devolving into procedural shortcuts that validate incumbency. India’s first settlement should be the beginning of a regime that builds confidence in enforcement, not the template for its dilution.

[1] Kshitiz Arya and Another v. Google LLC and Others, Case No. 19/2020, Competition Commission of India.

[2] The Competition Act, 2002, §48(A)(3).

[3] Vidushi Sinha & Ujjwal Kumar, Evolution of Commitment and Settlement Framework in India and the Way Forward, 8 (4 CUTS International, Policy Paper No. 2405, 2024) available at https://cuts-ccier.org/pdf/policy-paper-evolution-of-commitment-and-settlement-framework-in-india-and-the-way-forward.pdf (Last visited on November 05, 2025).

[4] The Sherman Antitrust Act, 1890 (U.S.A.).

[5] United States of America v. Microsoft Corporation, [2001] 253 F.3d 34 (The US Court of Appeals for the District of Columbia Circuit).

[6] Anchal Kanthed & Ishita Nayak, Reduced Litigations or Increased Ambiguity: In Light of the Settlement and Commitment Mechanism Under the Competition (Amendment) Act, 2023, Manupatra (2024), available at https://articles.manupatra.com/article-details/REDUCED-LITIGATIONS-OR-INCREASED-AMBIGUITY-IN-LIGHT-OF-THE-SETTLEMENT-AND-COMMITMENT-MECHANISM-UNDER-THE-COMPETITION-AMENDMENT-ACT-2023 (Last visited on November 05, 2025).

[7] Id.

[8] The Digital Markets Act, 2022 (EU).

[9] Pallavi Arora and Jyotsna Manohar, Ex-ante Competition Regulation of Digital Markets: Rethinking Regulatory Autonomy under the Gats Non-discrimination Obligation, Vol. 4(1), J. Law Mark. Innov., 90 (2025).

[10] Google v. Commission (Google Shopping), [2017] Case AT.39740 (The European Commission).

[11] The Competition Act, 2002, §27.

[12] Competition Commission of India, Annual Report 2021-22, 20.

[13] The Competition (Amendment) Act, 2023.

[14] The Competition (Amendment) Act, 2023, §§ 48A-48B.

[15] The Competition Commission of India (Settlement) Regulations, 2024.

[16] Kshitiz Arya and Another v. Google LLC and Others, Case No. 19/2020, Competition Commission of India, Dissent Note of Member Anil Agrawal.