The Supreme Court of India, in a judgment delivered on 4 October 2025, reaffirmed the Competition Commission of India's authority to impose both behavioral and structural remedies under Section 27 of the Competition Act, 2002. A Bench comprising Justice Manoj Misra and Justice K.V. Viswanathan upheld the CCI's remedial powers in a dispute involving the Kerala Film Exhibitors Federation.
Background
The case arose from proceedings initiated by the CCI against the Kerala Film Exhibitors Federation for alleged anti-competitive practices. The Federation challenged the scope of the CCI's remedial jurisdiction, contending that Section 27 of the Competition Act, 2002 did not extend to structural remedies — measures that require an entity to alter its organizational structure, divest assets, or modify its corporate configuration.
Section 27 empowers the CCI to pass orders after finding a contravention of Sections 3 or 4 of the Act, which deal with anti-competitive agreements and abuse of dominant position respectively. While behavioral remedies — directing parties to cease certain conduct — have been routinely imposed, the availability of structural remedies under the same provision had been subject to debate. The Federation argued that structural remedies, being more intrusive, required explicit legislative authorization beyond what Section 27 provided.
Key Holdings
The Supreme Court ruled as follows:
Dual remedial authority confirmed: The Court held that Section 27 of the Competition Act empowers the CCI to impose both behavioral and structural remedies. The provision's language is broad enough to encompass the full range of corrective measures necessary to address anti-competitive conduct.
Legislative intent supports wide powers: The Bench observed that Parliament intended the CCI to function as an effective regulator with sufficient remedial tools. Restricting the Commission to behavioral remedies alone would undermine the statutory scheme of the Act.
Proportionality principle applies: While affirming the CCI's structural remedy powers, the Court noted that such remedies must be proportionate to the contravention found. Structural remedies should ordinarily be reserved for cases where behavioral remedies alone would be insufficient to restore competitive conditions.
Implications for Practitioners
This decision strengthens the CCI's enforcement arsenal significantly. Entities under investigation for anti-competitive conduct must now account for the possibility that the Commission may direct structural changes — including divestiture, separation of business units, or modification of ownership arrangements — and not merely behavioral cease-and-desist orders.
For competition law practitioners representing respondents before the CCI, this ruling elevates the stakes in enforcement proceedings. Defence strategies should address proportionality arguments early, demonstrating that behavioral remedies would suffice to address any established contravention.
From a transactional perspective, companies involved in merger reviews should note that this ruling implicitly reinforces the CCI's authority to impose structural conditions on merger approvals under Section 31 as well. Advisors structuring transactions should factor in the enhanced likelihood of structural conditions being imposed where competition concerns are identified, and build appropriate conditionality into deal documentation.