[By Abeer Sharma]
The author is a student of Rajiv Gandhi National University of Law, Punjab.
Introduction
Recently, a penalty of Rs 40 Lakhs was imposed by the Competition Commission of India (CCI) on Goldman Sachs for the offence of Gun Jumping based on the acquisition of equity and information rights without informing the CCI. The offence of Gun Jumping is provided under Section 6(2A) of the Competition Act, 2002, which stipulates that no combination shall be given effect to until the expiry of 210 days from the date of notification to the CCI. Goldman Sachs, through its AIF scheme-1, acquired optionally convertible debentures (less than 10% equity) under Biocon Biologics, wherein it had access to the board and shareholder meeting minutes (information rights). Furthermore, under the ‘solely as an investment’ exemption in the Combination Regulations, 2011, acquisitions of less than 10% equity are exempt from notification to the CCI. However, CCI found these information rights not to be ‘ordinary’ for shareholders, and classified them as Commercially Sensitive Information (CSI).
This interpretation amounted to a significant shift, wherein certain acquisition or merger involving the sharing of CSI, regardless of the percentage of equity shares acquired, was required to be reported to the CCI. However, sharing of CSI, as prohibited under the new Combination Regulation of 2024, is defined through the CCI’s updated FAQs on combinations, part N of which provides a list, including information relating to prices, profit margins, sales, and terms with customers. Although this information criteria are uniformly applicable to all entities as recognised in the Beer Cartel Case, CSI differs from entity to entity depending on the functions performed by it and the industry in which it is involved.
The ignorance of this distinction by the Combination Regulations and the updated FAQs creates a grey area, wherein acquirers are faced with ambiguity concerning the classification of information as CSI or not, based on their specific industry. Furthermore, this uncertainty results in a lowering of investments, as evidenced by a study, finding that firms perceiving uncertainty in regulatory policies as a major obstacle exhibit an approximately 2.5 percentage point lower investment rate compared to those not viewing uncertainty as an impediment.
Considering the same, this article, by briefly discussing the concept of CSI, provides a sector-specific solution through changes under the Competition Act, 2002 and the Competition (Combinations) Regulations, 2024, for rectifying the uniform information criteria based on international precedent of the United Kingdom (U.K.) and European Union (EU) and further examines its application under the Indian antitrust regime.
The Concept of CSI and its Blanket Sectorial Application
CSI, as defined under Part N of CCI updated FAQs on Combinations of 2025, relates to information that is important for an undertaking to protect, maintain, or improve its competitive position in the market. Further, Part N also discusses what is excluded from CSI, which includes information that is readily ascertainable through appropriate means or information available to an ordinary shareholder of a company that is not considered by the management for commercial decision-making.
However, these criteria can be ascribed as subjective due to their enforcement variability across industries. In light of this, the section contrasts industries selected to represent different market structures, such as: (a) oligopolistic digital/ automative markets, (b) hyperlocal/price-sensitive retail, (c) large national FMCG firms, and (d) pharmaceuticals depicting pricing/regulatory sensitivity. The reason behind choosing these industries was not their superficial similarity, but to test the robustness of CSI across market concentration, public observability, and strategic value.
Building on this sectoral comparison, information concerning quality, sales, and market shares functions as CSI as per the FAQ’s and may be applicable in the automobile industry, where a company may consider its quality ratings and sales data as highly sensitive. This is due to the oligopolistic nature of the market, wherein even minor changes in sales numbers or quality indices can be used to realign pricing and financing by competitors. The same was observed in General Motors’ OnStar Smart Driver case from 2025, wherein driving behaviour and quality-related data were held to be highly sensitive competitive information.
In contrast, within the bakery industry, quality ratings and sales data are often publicly available due to the entity’s reputational dependence on them. Moreover, they do not provide competitors with a significant strategic advantage because of hyperlocal and price-sensitive demand. A similar precedent can be observed with the Sweets Treats Bakery case study in Chicago, which experienced a 20% increase in sales after implementing a bakery management software that provided detailed tracking of customer reviews, depicting product quality and sales data.
Additionally, the subjectivity of excluded information from CSI can be illustrated through the Fast-Moving Consumer Goods (FMCG) sector. For instance, Hindustan Unilever Limited (HUL) files annual reports, investor presentations and financial disclosures with the Securities and Exchange Board of India (SEBI), revealing details such as plant location and generic production capacity. However, this disclosure adds little strategic advantage because competitors focus instead on stock-keeping unit (SKU), level consumer insights (e.g., which wheat or pack size sells more), functioning as a CSI, rather than on how much wheat production is undertaken by HUL, which merely showcases its generic production capacity.
By contrast, in the pharmaceutical industry, where pricing is highly sensitive and private medications compete with generic medications, information revealing production capacity can indeed provide rivals with an edge. It can help predict a company’s future strategy of undercutting prices, enabling counteractions such as pre-emptive price slashing or blocking contracts with distributors. A similar situation arose with the U.S. Pharma Company- Mylan, which conspired with Pfizer and Teva by entering into patent litigation settlements to deliberately delay the market entry of competitors’ epinephrine autoinjectors, strategically postponing its generic production.
Therefore, the foregoing sectoral contrasts demonstrate that CSI is not a fixed or universal category, but one that turns on market concentration, the observability of information, and its strategic value within a particular industry. Information that is treated as competitively critical in an oligopolistic market may function as a routine in a fragmented and publicly transparent market, and vice versa. Accordingly, CSI should be assessed contextually rather than through blanket assumptions, because identical data points can shift from being competitively sensitive to commercially ordinary based on the operating industry.
The Remedial Measures Concerning the Sector-Specific CSI Classification
CSI, as already discussed, cannot be based on generic criteria formulated for all sectors; instead, it needs to be applied in a sector-specific way. However, in its sector-specific application, it can face limitations, such as the need to identify separate CSI criteria for each industry, which requires extensive research and policy formulation, as well as the creation of uncertainty in identifying information criteria in intersectoral investments.
Nevertheless, these limitations cannot override the benefits arising from the sector-specific CSI because a uniform framework will continue to generate regulatory ambiguity, deter investment decisions and impede competitive neutrality, whereas a sector-tailored model, though deemed complex and expensive in the short run, can ensure accurate assessment of competitive harm and reduction in compliance uncertainty for acquirers in the long run. Accordingly, the relevance of an effective CSI regime lies not only in recognising these challenges but also in examining workable responses that have succeeded in other jurisdictions.
Considering the same, and in light of the identified loopholes and operational challenges with India’s existing approach, this section further analyses the remedial measures adopted by the U.K. and the EU, functioning as jurisdictions with advanced competition laws and adequate frameworks to deal with CSI.
The United Kingdom and its Tier 2 Framework
The U.K. dealt with a problem of CSI similar to that of India, and addressed it through its Market Investigations Guideline of 2013, which employed a three-tier confidentiality assessment system for CSI classification. Tier 1 described presumptively confidential information, including financial data less than two years old and information that would adversely affect the competitive process. Tier 3, on the other hand, described presumptively non-confidential information, such as information already available in the public domain or readily deducible from public sources.
However, the grey area concerning the information that is difficult to categorise as CSI was addressed through Tier 2, which involved a case-by-case assessment based on specific sector criteria. The criteria focused on multiple factors. First, market structure: if a specific sector is highly concentrated, with oligopolistic tendencies, then even information considered normal in other industries (such as sales and product quality) may hold highly sensitive value. Second, industry standard practices: if in an industry the general practice or norm treats certain information as normal, it may be exempted from CSI, for instance, in pharma, trial results may be published, but pricing negotiations remain secret. Third, readily ascertainability of information through appropriate means within a specific industry: if particular information is readily available to a reasonable, prudent person, such as passenger numbers and flight frequencies of airlines published by the European Civil Aviation Authorities, then it will not be categorised as CSI.
A successful application of this Tier 2 structure was observed in the CMA Retail Banking Market Investigation (2014-2017). In that case, the Competition and Markets Authority (CMA) was investigating the banks’ procedures in setting prices for the Personal Current Accounts (PCAs) and required access to bank-sensitive data. To determine confidentiality, the CMA applied a sector-specific Tier 2 approach. Since retail banking was dominated by a few older and larger banks, applying the first-Tier 2 criterion concerning market structure, one bank’s pricing information was deemed to have the potential to distort competition.
Furthermore, the CMA, by applying second-Tier 2 criterion concerning industry standard practise and considering banking sector-specific confidentiality norms, observed that banks were already subject to extensive disclosure obligations under financial services regulations; yet, pricing methodology information carries different competitive sensitivity in banking compared to other sectors. Hence, through the use of these sector-specific norms as confidentiality indicators, the CMA was able to clearly identify what constituted competitively sensitive information within retail banking and avoid the application of generalised disclosure criteria.
The European Union and its Horizontal Guidelines
The EU, although not following a strict sector-specific CSI classification, applied harmonised principles that are applied to each sector on a case-by-case basis, depending on market characteristics. These principles were later formalised and codified through the European Commission’s Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements, 2023 (Guidelines). Paragraph 264 of the guidelines emphasises the individual assessment of CSI depending on the facts of each case, with one significant factor being the characteristics and structure of the relevant market.
The characteristics are assessed on multiple bases: First, market share and product percentage: if a party holds a majority share, then it’s all internal business information is more likely to be categorised as a CSI compared to a minority shareholder. Second, the number of parties outside the agreement and the pressure they exert: if many competitors exist outside the agreement, market pressure is stronger, and each company’s strategic data becomes more sensitive. Conversely, if only a small number of parties are outside the agreement, the market is less competitive, and the relative sensitivity of CSI decreases.
Regarding the application of the 2023 guidelines, due to their novelty, they have not yet been applied in specific investigations. However, a parallel application was seen in the European Commission Energy Sector Enquiry case 2007. In the above case, sector-specific requirements, such as the hourly electricity data rate, showing each party’s share held by each party, and trading strategy, were identified as CSI. Additionally, the commission noted that large firms controlled upstream gas imports, while only a fraction was provided to retailers (Hubs). Consequently, import contracts by firms with outsiders were classified as CSI.
Hence, both the U.K. and the EU recognise the impracticability of a generic CSI classification, which must instead be adopted to sector-specific characteristics. The U.K.’s structured tier 2 framework and the EU’s adoption of harmonised principles tailored to market needs illustrate a pragmatic approach to a sector-specific CSI classification. Further, the Energy Sector Inquiry illustrates how sectoral realities, such as electricity trading data and gas import contracts, shape what qualifies as CSI.
The CSI Sector-Specific Application in the Indian Antitrust Regime
CSI, as previously discussed, is applied in India based on criteria that are uniformly applicable across all sectors and industries. However, this approach, as observed in the Goldman Sachs case, creates confusion among acquirers because of the relation and isolation of CSI criteria at the same time, amongst heterogeneous sectors. This necessitates the CSI criteria to be revised by adopting a sector-specific framework, as already implemented in the U.K. and the EU. In light of this, this section proposes Indian context-based remedial measures.
Formation of a Legal and Regulatory Basis for Sector-Specific CSI
Under India’s current Competition (Combinations) Regulations, 2024, CSI is recognised through blanket criteria. This can be amended by inserting a new Regulation 4A, in continuance of Regulation 4(2) of the 2024 Regulations. Regulation 4(2) discusses Substantial Business Operations (SBO) in the digital services sector, wherein SBO functions like a sector-specific CSI test in digital services, based on its identification of when a digital company has significant market control and influence in India. A similar approach can be extended through Regulation 4(A), introducing a sector-specific CSI assessment framework by prescribing CSI criteria in critical sectors such as the pharmaceuticals, automobiles, and the FMCG.
In line with this shift away from blanket thresholds, a parallel precedent can be observed in SEBI’s Fifth Amendment in 2025 to the Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015. Under the earlier Regulation 23(1) of LODR, all listed entities were required to follow a uniform rule for recognising a Related Party Transaction as “material” if it exceeded Rs. 1,000 crore or 10 % turnover, resulting in an unfair blanket criterion for entities operating at different scales of turnover. This was rectified through the Fifth Amendment by introducing Schedule XII, which provided specific turnover-linked and scale-based thresholds.
Furthermore, under Section 64 of the Competition Act, 2002, the CCI is empowered and delegated to make regulations that are consistent with the Act. In consideration of the same, comprehensive ‘CCI guidelines on the Sector-Specific CSI Classification, 2025’ can be developed, providing specific CSI criteria based on the U.K. Tier 2 framework. Moreover, there will be no adverse substantive effect of these regulations upon the Competition Act, 2002, because of their entirely novel procedural and substantive framework, and a precedent supporting the same can be observed under the Competition Commission of India (Lesser Penalty) Regulations, 2009, which were formulated through Section 64 and were specifically based on the inspirations from the United States and European Union.
Building further on this regulatory scope, in the exercise of its powers under Section 49(3) of the Competition Act, 2002, which empowers the CCI to promote competition awareness, Part N of CCI’s updated FAQ’s (2025) can be restructured into sector-specific sub-parts by devising criteria such as the percentage share held by the parties in the industry and the agreements or relationships existing among them. This would mirror the EU Horizontal Guidelines criteria.
Institutional Mechanisms for Sector-Specific Implementation
To enforce the changes as introduced in the previous head, practical institutional mechanisms need to be developed. First, the CCI, by exercising its powers under Section 19(1)(k) of the Competition Act, 2002, can conduct empirical market studies, specifically focusing on different industries and providing exclusive CSI thresholds and disclosure sensitivities for each industry.
Secondly, these studies, based on Section 18 of the Competition Act, 2002, which empowers the CCI to enter into memoranda of arrangement with other statutory authorities, such as SEBI, the Reserve Bank of India (RBI), and the Telecom Regulatory Authority of India (TRAI), can be shared with these authorities. Based on the same, a sector-specific CSI framework involving the expertise of both the CCI and SEBI, RBI can be made for the financial markets, including the private equity and venture Capital.
Similarly, the expertise of both the CCI and TRAI can be combined for entities relating to telecom and other communication industries. This mutual expertise-based framework can then be extended to other sectors as well. Further, to enforce these frameworks, a subsidiary division can be established under the CCI to exclusively deal with CSI-related issues, coordinate with other statutory authorities, and regulate sector-specific criteria for CSI.
Conclusion
The present blanket classification of CSI under India’s Competition Rules results in regulatory ambiguity, as equivalent criteria are applied across diverse industries. Comparative experience from the U.K.’s tier 2 framework and the E.U.’s Horizontal Guidelines demonstrates the necessity of sector-specific assessment grounded in market structure, industry practices, and information accessibility. India can lawfully operationalise such a model by adding Regulation 4A to the Combination Regulations, issuing CCI Guidelines on Sector-Specific CSI under Sections 64 and 49, and creating a specialised CSI division with Section 18 authority to work with SEBI, RBI, and TRAI.