Author name: CBCL

[By Ayushman Rai] The author is a student of National Law University, Jodhpur.   Background Until the 2023 amendment, the Indian law didn’t explicitly take a stand between the global and relevant turnover, and hence the pendulum kept on swinging between the two. This article is written with the twin motives of examining the backdrop and implications of the changes in the basis for penalisation under Indian law; and assessing the extent to which this alteration conforms with the aims and objectives of competition policy, through a juxtaposition with other (European and British) jurisdictions.  Pre-Amendment Developments: Buildup to Excel Corp Case Initial inclination towards “global approach”  The notion of penalising the entity distorting competition based on its turnover has been universally accepted. However, there is a split of opinions on the appropriate basis for the calculation. Should it be calculated based on the firm’s turnover in the specific market where it has (or attempted to) distort competition, i.e., the “relevant turnover”; or should it be based on the “global turnover” of the firm regardless of the size/type of market distorted?  The initial years post-enactment saw the Competition Commission of India (CCI) attempting to take the widest import in fining, and went for the global turnover approach. Applied in a plethora of cases,1 the approach was justifiable to a certain extent, based on the aim of imposing penalties—“deterrence”.  The Excel Corp Rift   In order to prevent arbitrariness, Section 27 of the competition act provided that the onus was on the court to elucidate appropriate reasons before imposing punishment. However, the penalties imposed still seemed unjustifiably excessive and disproportionate in many cases.  This culminated in the Excel Corp Case, which was an appeal against a case where the penalties imposed were enormously disproportionate, despite being culpable for the same offence.  Proportionality, enshrined under Article 14, meant that the fine should be imposed proportionate to the gravity of the offence. Taking cue from South Africa, the court acknowledged the aim of deterrence (purposive interpretation), but conceded that it cannot go to the extent of imposing penalties that eradicates the existence of a firm. It was held that the aim of deterrence can be sufficiently served with “relevant turnover”, by reading the purpose with proportionality.  The 2023 Amendment: Inferences and Implications Debunking the Excel Corp  The 2023 amendment act addresses the issue of  the Excel Corp by explicitly adding an Explanation to Section 27, to clear the ambiguity. The purpose of deterrence is also served effectively  by the ‘global turnover’ approach. Moreover, the concern for disproportionality lies in the percentage of the turnover (on the scale of zero to 10 %) taken for the penalty, and not the nature of turnover- i.e., global or relevant. Section 45 of the amendment takes care of the same, by provisioning for guidelines to CCI for ensuring proportionality in imposing penalties.  The Positives  The amendment enforcing a reversion to the global approach is commendable for plenty of reasons, as it plugs several loopholes, which were not addressable by the relevant approach.  The digital (muti-market) conundrum— a major ambiguity revolved around penalising the “digital market platforms”. The non-feasibility of relevant turnover for digital enterprises was emphasized in Matrimony.com vs. Google. As Google could contend herein that it is bereft of any liability, since the search is free, there is no revenue from this stream of (relevant) market, hence no penalty. Such an inference would straightaway defeat the purpose of the act, and is impermissible. This stance found the latest reiteration in 2022, when the court in MMT-GO, interpreted the aggregate turnover under the titular of relevant turnover only, to preserve the aim of deterrence.  Dominant in one market, abusive in another (Tying cases)— the delineation of market is easier when the abuse is through anti-competitive agreement, but in the cases of abuse through dominant position (by conduct) it turns complex. More so, in cases where the firm in dominant in one market and is abusing it in the other (related) market. For instance, in a case of tying, where the firm makes the supply of the product (where it has dominant market) contingent on the purchase of another product (not dominant). Since, the relevant market is not determinate, the approach will fall flat here. Even if we take the market where abuse happens to be the relevant one, the fine imposed will be inept, unfair and insignificant to deter.   Cover bidding loophole—  the firms, not involved in the business of the product, were bid-rigging and getting away without being punished. This was being done through complementary bidding agreements (page 6). The CCI took no time to distinguish the case, reflected as a glaring drawback of relevant approach, from the Excel Corp. With the new amendment, this loophole is done away with.  The Negatives  While the amendment meets several of its targets, there are some aspects that reflect badly on it too.   Procedural accountability/scrutiny compromised— a major criticism of the amendment comes against the procedural irregularity in the pursuit of passing the bill. Specifically, the provision of the amendment (Explanation II of S. 20) doing away with the Excel Corp, was not included in the original amendment bill tabled before the Indian parliament. The provision, subsequently, was not scrutinised even by the Parliamentary Standing Committee on Finance, to which the bill was referred by the Lok Sabha on Aug, 17th, 2022. It was passed without debate once it was reverted by the Standing Committee. Moreover, it was not included even when the draft bill was published to invite public comments, hence it also escaped the direct public scrutiny. Thus, a major question arises as to accountability of this provision, which nullifies a landmark judgement in the arena of Indian competition law. It was not a recommendation of any committee report, not even the most recent CLRC report, nor was it debated by parliament, standing committee or even public, hence it has a shaky foundation.  Furthering the protectionist agenda— arguably an unintended repercussion of the amendment is the bias against the

[By Sidhanth M K Majoo] The author is a student of National Law University, Odisha.   Introduction Competition Commission of India recently passed an order requiring Swiggy to share confidential business information. Swiggy filled a petition in the Karnataka High Court challenging this order on the ground that is it arbitrary and could detrimentally impact its business operations.  The dispute originates from a 2021 complaint by the NRAI, in which it accuses Swiggy and Zomato of engaging in anti-competitive practices. In response to that complaint, the CCI initiated an investigation in 2022, which led to the current contention over the confidentiality of the information disclosed during the probe​​​​.  While this particular complaint is Sub Judice, this situation does shine light on the confidentiality practices that the CCI has adopted, or lack thereof.    This article evaluates the effectiveness of confidentiality measures in India’s competition law. It explores the evolution of confidentiality regulations, assesses their current effectiveness, and compares them with international standards from the ICN. The piece also highlights the impact of inadequate safeguards on the fairness and integrity of competition law enforcement in India.  Assessing the Sufficiency of CCI’s Confidentiality Measures  Currently in India, confidentiality in proceedings conducted by the CCI is governed by specific provisions in the Competition Act, 2002, along with supplementary regulations. Section 57 of the Act mandates that the CCI shall keep information relating to any enterprise, being confidential, as confidential unless the disclosure of such information is required under the provisions of the Act or for compliance with any other law.   Regulation 35, of the Competition Commission (General) Regulations, 2009, currently provides a framework for treating of sensitive information, and prevents disclosure of it to protect business interests.  In May 2024, CCI introduced the CCI (General) Amendment Regulations, 2024, aiming to enhance its confidentiality regime in legal proceedings. This was preceded by a Public Consultation initiated by the CCI in February of 2024. This is not the first time CCI has made major changes to the regulations, as a matter of fact in 2022, CCI introduced the concept of a confidentiality ring which allows limited access to sensitive information during investigations.  The  Competition Commission of India (General) Amendment Regulations, 2024 mainly formalize the process for establishing a confidentiality ring upon request, designating specific time rings for the same. They have also adjusted the protocol for document inspection and the associated fees, aiming to streamline procedures and ensure more effective case handling while providing parties more robust means to protect and manage confidential information.  However, one must wonder if these enhanced measures are sufficient to ensure the integrity and fairness of the proceedings, or is it too little too late. As we consider the domestic efforts to bolster confidentiality within the competition framework, it is insightful to look towards international collaborations that influence these practices globally.  Breaking Borders: How ICN Shapes Global Competition Policies  The International Competition Network (“ICN”) is a global partnership which was formed in 2001 with the purpose of enhancing the efficacy of competition law enforcement worldwide. It unites competition authorities from diverse jurisdictions, fostering a collaborative space where ideas and best practices in competition policy and enforcement are exchanged. Periodically, the ICN releases documents and guidelines. It is prudent to note at this point that India recently became a member of the steering group of ICN in 2023.  The ICN Recommended Practices for Investigative Process states that transparency regarding the legal standards and agency policies is crucial for accountability and predictability in enforcement. It is advised that agencies should communicate clearly about their procedures and investigative tools, and provide reasons for their decisions to foster understanding and compliance. While these practices advocate for a balanced approach that considers the commercial interests, procedural rights, and enforcement transparency, the situation in India appears to diverge from these ideals.  Transparency protocols in India do not live up to the same standards that has been recommended by the ICN.  The Protocol recommends that competition agencies should possess internal safeguards, in case the CCI has any they have not been communicated to the public.  Section 57 of the Indian Competition Act primarily outlines a general obligation for the CCI to maintain confidentiality without providing specific guidelines on what should be classified as confidential. ICN recommends the contrary in the form of detailed conditions for handlining sensitive personal data and trade secrets. India not living up to this recommendation could be a bane for it in the long term for its competition regime. This gap not only limits the effectiveness of confidentiality protections but also impacts the overall trust in the enforcement process managed by the CCI.  ICN also in the Recommended Practices for Merger Notification and Review Procedures suggests that competition agencies should defer contacting third parties about a merger until it becomes public knowledge, unless early contact is essential for the review. The regime in India again fails to clearly release guidelines which fulfil this role.  Global Trends in Confidentiality: Lessons for India  A survey conducted of 39 ICN members (Not including India) regarding confidentiality practices in their countries shines a dark light on the current situation in India. It was observed that confidential documents are generally destroyed once a case has been resolved – a practice not explicitly defined in India’s competition law regime. The survey’s findings emphasize the need for India to consider incorporating these practices to enhance the robustness and reliability of its competition law procedures.   The survey indicated that 92% of the agencies around the world have established statutory provisions to protect confidential information obtained during investigations. 70% of these agencies publish the criteria governing their handling and treatment of confidential information. India has till date not notified any such procedures to the general public.  The ICC’s Blueprint for Competition Law  Even the International Chamber of Commerce has released a document titled “Recommended Framework for Best Practices in International Competition Law Enforcement Proceedings” which underscores the importance of procedural safeguards such as transparency, due process, and non-discrimination to ensure fairness in

[By Anmol Aggarwal] The author is a student of Rajiv Gandhi National University of Law, Patiala.   Introduction  The Ministry of Corporate Affairs (“MCA”) on 12 March 2024 released the draft report of the Committee on Digital Competition Law (“CDCL”) and a Draft Digital Competition Bill (“the draft bill”). The CDCL report seeks to lower the threshold of proof required to determine anti-competitive practices by certain large undertakings to the lowest threshold of “ex-ante measure” or determining the abusive practices on a “by object” basis. This essentially means that the anti-competitive practices by such undertakings would be determined without examining any effects or potential effects of the conduct. The report proposed several quantitative and qualitative benchmarks to determine the entities that would fall under the ambit of the new bill, designating these entities as Systematically Significant Digital Enterprises (“SSDE”). In this piece, the author analyses how this shift from ex-post to ex-ante framework for SSDEs is harmful. It poses a huge risk of false convictions and will disincentivize such enterprises to indulge in innovations. The report mentions that the current move is in line with the Digital Markets Act, 2022 (“DMA”) enacted in the European Union (“EU”). Although not viable, under the EU Competition Law, the low threshold of the ex-ante framework can still work as it imposes only monetary fines for infringements. However, such a low threshold is dangerous in the Indian Competition regime as it consists of monetary fines and imprisonment of a term extending up to 3 years in case of an infringement. The author argues that such a low threshold is not viable in a framework in which the punishment consists of imprisonment in addition to monetary fines.  Risk of false convictions  The new ex-ante framework or “by object” approach in identifying abuse of dominance by SSDEs poses a huge risk of false convictions, which goes against the principle of presumption of innocence. This principle is an undebated principle that works to favour the undertaking alleged of the abusive conduct. The determination of the abuse by object, i.e. before even looking at the facts, will result in innocent actions of the firms to come under the ambit of anti-competitive conduct.   For instance, let us assume a dominant software company provides an office suite with several tools like Word processing software, presentation software and spreadsheets, among others. This company has introduced a new email management system integrated into the suite. Now, the company has done the same with an intent to improve the consumer experience and provide seamless productivity and streamlined workflows to the consumers. The dominant firm, while not intending to foreclose competition, would face liability for tying under the ex-ante framework, leading to the imposition of a huge fine.  Under the EU jurisprudence, the antitrust fines qualify as “criminal sanctions” as they meet the “Engel criteria” developed by the European Court of Human Rights (“ECHR”). This criterion considers several factors, such as the nature of the penalty and domestic context, among others. Given that the Indian Competition regime has largely evolved by examining the EU Competition regime, one can infer that antitrust fines in India also qualify as “criminal sanctions”. Looking at the severity of punishments for finding abusive conduct, avoiding false convictions at any cost is imperative. As stated by a famous English Jurist that “It is better that ten guilty persons escape than that one innocent suffer”. The new bill seeks to prevent anti-competitive conduct before it even materialises, which, looking at the high risk of false convictions, will prove to be a blunder in the Indian Competition regime.  To avoid such risks, the EU Competition regime has consistently shifted towards an effects-based approach or ex-post framework when analysing anti-competitive conduct.  As can be observed in the recent competition policy brief (“policy brief”) regarding 2023 amendment to the 2008 Guidance on the Commission’s Enforcement Priorities in Applying Article 82 (“Guidelines”), wherein the policy brief departs from the object-based approach of the 2008 Guidelines, stating that “the Commission is committed to an effects based enforcement of Article 102 TFEU, which fully takes into account the dynamic nature of competition and constitutes a workable basis for vigorous enforcement”. As the EU competition regime progressively adopts an effect-based approach, it is incongruous for the Indian Competition regime to regress towards an object-based approach in assessing anti-competitive conduct.  The Justification Of It Being In Line With EU’s DMA Is Erroneous  One line of reasoning we can observe while looking at the report is that the proposed bill is in line with the EU’s DMA, 2022. This reasoning is highly erroneous, as discrepancies exist in the punishments prescribed in the proposed bill and DMA. The punishment under the DMA is a monetary penalty of up to 10% of the undertaking’s worldwide annual turnover, which extends to a maximum of 20% considering the repetitive infringements. Contrary to this, the punishment for repetitive infringements and not following the orders of the Competition Commission of India (“CCI”) embarks an imprisonment of up to 3 years in addition to huge monetary fines. Thus, the threshold of determining anti-competitive conduct cannot be compared to the DMA, as the punishments under the proposed Bill and DMA are inconsistent.  Further, the criteria to determine the firms that would fall under the ambit of SSDE is highly arbitrary as it vests a disproportionately large discretion with the CCI. This arbitrariness exists because the report gives discretionary power to CCI to designate an undertaking as SSDE, even if it does not meet the quantitative and qualitative criteria laid down in the report. An ex-ante approach coupled with such arbitrariness and punishments, including imprisonment in addition to the monetary fines, will be a disastrous measure for the Indian Competition Regime.  The Proposed Rules will Disincentivise Firms To Indulge in Innovatation  The proposed bill puts the SSDEs under large scrutiny and restrictions, which will, in turn, lead to a strike at the innovation. The dominant firms are the largest contributors to present-day innovations around the globe, consider the