Competition Law

[By Sunidhi Kashyap] The author is a student of Rajiv Gandhi National University of Law, Punjab.   Introduction   A failed attempt at acquiring a healthcare company involved in developing early cancer detection tests, led to an interesting take on the European Union Merger Regulation (“EUMR”). Illumina, an American biotechnology company manufacturing and selling next generation sequencing (“NGS”) systems, used in developing blood-based tests to detect cancer, wanted to acquire GRAIL, an American healthcare company engaged in developing an early multi-cancer detection test in asymptomatic patients.   Illumina had publicly announced its intention to acquire GRAIL for $8 billion in 2020. However, this acquisition embroiled Illumina in a legal battle with both, the EU and the US regulators on account of the anti-competitive nature of this deal. While the unsuccessful deal of Illumina and GRAIL is known for the unique interpretation of Article 22 of EUMR given by the General Court (“GC”), it has also paved a path for regulating combinations. The interpretation given by the GC shows that though the deal was within the threshold limit of notifying the relevant authorities, it still had the potential of stifling innovation in a constantly evolving and emerging market like healthcare.   In this context, this post will firstly shed light on the role of Article 22 of EUMR in this deal; secondly, it will discuss the importance of regulating combinations in markets of innovation and lastly, it will identify the lacunae in the Indian competition regime and would suggest a way forward.   Article 22 of EUMR and the Illumina-GRAIL deal   Illumina is the top supplier of NGS systems and GRAIL was a customer of Illumina, using its NGS systems to develop cancer detection tests. According to the investigation of the European Commission (“EC”), a vertical merger between the two could destroy competition in the market of early cancer detection tests as Illumina would be incentivized to not share its technology with GRAIL’s rivals and consequently, without the essential input from Illumina, GRAIL’s competitors would be put in a disadvantaged place. The market players were apprehensive that post the acquisition, Illumina would monopolize the emerging market of early cancer detection tests by limiting access to its NGS systems.   While both the American healthcare companies did not exceed the relevant thresholds and did not have any European dimension it was still subject to scrutiny by the EC. This was possible only because Article 22 of EUMR permits Member States to request the EC to investigate the concentration if it affects competition within the territory of the Member State. When looked closely, Article 22 plays a crucial role by regulating those combinations which fall within the turnover threshold but still carry an adverse effect on competition in a market. Especially, in cases of killer acquisitions, where the nascent firms are bought by the incumbents to prevent any future competition, provisions like Article 22 are important to maintain healthy competition in the market.   In India, however, combinations under the Competition Act, 2002 (“The Act”), are looked from an antitrust lens only when it exceeds the turnover or asset thresholds. This “safety net” or the de minimis exemption excludes many combination deals in emerging markets, especially where a tangible product may not be developed yet but its merger with an incumbent firm still poses antitrust concerns. In this context, this article will argue for treating combinations in emerging markets or markets of innovation differently, by accounting for their peculiarities.   Markets of Innovation and Antitrust Concerns  Emerging or markets of innovation refer to those markets where there is constant scientific development, inventions, technological advancements, improvements or modifications. They largely refer to the research and development (“R&D”) intensive sectors. A unique characteristic of such markets is that it may not necessarily possess a tangible good which is ready to be sold. For instance, in the case of the Illumina and GRAIL deal, the early cancer detection test being developed by GRAIL was not a ready product yet. Despite that, the merger would have stifled innovation and competition in an emerging market which could potentially lead to a reduced consumer choice.   In innovation markets, the R&D development is much more fast-paced, making it more volatile than a traditional market. For instance, the infamous IBM “debacle” presents the perfect example of how innovation markets are difficult to predict. In 1969, IBM was a major player with the highest market share in the computer manufacturer sector and was being sued under Section 1 of the Sherman Act for restraint of trade. The case went on till 10 years and towards the end, it was simply dismissed in 1982 because IBM was no longer a monopolist and had lost its dominance in the market. This case shows that R&D firms are always vulnerable to radical changes and their dominance is only temporary. However, this does not mean that antitrust analysis would be completely absent in these ever-evolving markets. Being dominant in such markets for 10-20 years takes substantial resources from the economy and stifles innovation and competition both.   Lacunae in the Indian Competition Regime  While dealing with combinations in innovation markets, the biggest roadblock is posed by the “safety net” or the thresholds specified under the Act. The thresholds prescribed under the Act are of two types- turnover and asset. Only if a combination surpasses these thresholds would the Competition Commission of India (“CCI”) undertake an investigation for ruling out any appreciable adverse effect on competition in the market. Moreover, given the recent enhancements of these limits and the de minimis exemption, a lot of combination deals fall outside the scope of the Act. Additionally, it seems that the Act has a brick-and-mortar enterprise centric approach which assumes that a firm would traditionally make large investments in assets and aim to obtain a higher turnover. However, in the current technologically advanced times where the internet is progressively reducing the requirement to acquire assets, and firms are becoming dominant without heavy investments, such an approach seems outmoded.   Another hindrance with respect to innovation markets is

[By Anubhav Patidar] The author is a student at Narsee Monjee Institute of Management Studies.   Introduction In an era of increasingly sophisticated financial crimes, regulatory bodies worldwide are intensifying their efforts to combat money laundering and terrorist financing. On 06 June 2024, the Securities and Exchange Board of India (SEBI), proposed a comprehensive Master Circular (Circular) on Anti-Money Laundering (AML) Standards and Combating the Financing of Terrorism (CFT). This circular, aimed at securities market intermediaries, seeks to consolidate and update existing guidelines under the Prevention of Money Laundering Act, 2002 (PMLA) and its associated rules.   The proposed Master Circular comes at a crucial time when India is strengthening its financial regulatory framework to align with global best practices. According to a 2022 report, India’s Financial Intelligence Unit (FIU-IND) processed over 1.42 Lakh Suspicious Transaction Reports (STRs) in the fiscal year 2021-22, highlighting the increasing vigilance in the financial sector. This blog post aims to unravel the key elements of SEBI’s proposed Master Circular, examine its implications for various stakeholders, and understand how it fits into the broader landscape of India’s fight against financial crimes.    Decoding AML/CFT and SEBI’s Circular Anti-Money Laundering encompasses the legal and regulatory framework aimed at preventing the transformation of illicitly gained funds into legitimate assets. Closely related, Combating the Financing of Terrorism focuses on preventing the funding of terrorist activities. In India, these efforts are primarily governed by the PMLA and its associated rules. Section 4 of the PMLA criminalizes money laundering related to property derived from offences listed in the Act’s Schedule, termed as “proceeds of crime.”    The Master Circular on AML/CFT is a detailed document designed to unify and update the earlier existing guidelines on anti-money laundering and Standards and Combating the Financing of Terrorism for securities market intermediaries. It establishes the key principles for combating money laundering and terrorist financing, providing detailed procedures and responsibilities that has to adhered by registered intermediaries.  Client Due Diligence Client Due Diligence (CDD) forms the cornerstone of the circular’s provisions. The circular mandates that intermediaries must conduct thorough due diligence procedures for all clients, with a special underlining on identifying beneficial owners. The process extends beyond merely verifying the immediate client but also understanding the entire ownership and control structure, especially for non-individual clients. For example, the circular requires registered intermediaries to identify the natural persons who ultimately own or control a company client, using thresholds like ownership of more than 25% of shares, capital, or profits. This level of scrutiny aims to prevent the use of complex corporate structures to mask the true beneficiaries of financial transactions.   Risk Based Approach The circular introduces a risk-based approach to AML/CFT measures, recognizing that not all clients and transactions pose the same level of risk. Intermediaries are required to categorize their clients into low, medium, and high-risk categories based on various factors such as the client’s background, country of origin, nature of business, and transaction patterns. This approach allows for more efficient allocation of resources, with enhanced due diligence measures applied to higher-risk clients. For the First Time, “Clients of Special Category” (CSC) are specifically defined by the circular and also provided  elaborated list who will be considered as CSCs which include the non-resident clients, high net-worth individuals, trusts, charities, NGOs, politically exposed persons (PEP), and clients from high-risk countries. These CSCs are subject to enhanced scrutiny and continuous monitoring.   Monitoring and Reporting Monitoring and reporting form another crucial pillar of the circular. Intermediaries are required to have robust systems in place to detect and report suspicious transactions. The circular provided a detailed definition of suspicious transactions, including those that seem to lack any economic or lawful purpose, unusually complex, or show patterns inconsistent with the client’s normal activity. It mandates that intermediaries should not only monitor individual transactions but also pay attention to the overall financial behaviour of their clients. The circular sets specific timelines for reporting of different types of transactions such as Cash Transaction Reports, Suspicious Transaction Reports, and Non-Profit Organization Transaction Reports to the Director, FIU-IND.   Record Keeping The Circular imposes obligation on intermediaries to maintain detailed records of transactions, client identification and account files for a five years after the business relationship has ended or the account has been winded-up. The retention of data is a pivotal step for securing the data for future audit and investigations. The circular specifies the exact nature of the information to be maintained, including the nature of transactions, amount and currency, date of transaction, and parties involved. This meticulous record-keeping not only aids in investigations but also helps intermediaries in their ongoing monitoring efforts.   Compliance Structure The circular places significant emphasis on the compliance structure within intermediaries. It mandates the appointment of a Principal Officer who will act as a central point of contact for all AML/CFT related matters. Additionally, a Designated Director must be appointed to ensure overall compliance with AML/CFT obligations. These appointments underscore the importance of top-level commitment to AML/CFT efforts within organizations. The circular provides specific definitions and responsibilities for these roles, ensuring that there is clear accountability and a structured approach to compliance.   Employee Training and Investor Education Lastly, the circular recognizes the importance of ongoing education and awareness in the fight against financial crimes. It requires intermediaries to have comprehensive and ongoing training programs for their employees. These programs should cover various aspects of AML/CFT measures, including the latest techniques and trends in money laundering and terrorist financing. Moreover, the circular emphasizes the need for investor education. The requirements of AML/CFT measures and the rationale behind requesting certain personal information shall be explained to clients by intermediaries. This two-pronged approach of employee training and investor education aims to create a more informed and vigilant ecosystem that can effectively combat financial crimes.   Analysis and implications of the Circular The proposed Master Circular has far-reaching implications for various stakeholders in the Indian securities market. For registered intermediaries, the circular represents a significant enhancement of their AML/CFT responsibilities. The emphasis on a risk-based

[By Anirud Raghav] The author is a student at NLSIU, Bangalore.   Introduction Even after two decades of competition jurisprudence, questions regarding the scope and applicability of s.3 of the Competition Act (hereinafter, “the Act”) persist. Briefly put, s.3 prohibits anti-competitive agreements, and is an indispensable feature of global competition jurisprudence (see Art.101 TFEU, s.2 of UK Competition Act, 1998 inter alia). A key unresolved issue is whether s.3(1) can apply independently, or if it must be read in conjunction with s.3(3) and 3(4) dealing specifically with horizontal and vertical agreements respectively. This piece argues that allowing Section 3(1) to have standalone applicability is necessary to address increasingly complex business arrangements, especially in digital markets, that defy simple categorization as horizontal or vertical. This post will consider the objections levelled against an expansive interpretation of s.3(1) and reject these objections as lacking any merit. It proposes that s.3(1) should be expansively interpreted and proposes potential safeguards while doing so to ensure that a balance is maintained between ease of doing business and preserving healthy competition. CCI Decisional Practice: What is the Law? While previous blogposts have provided a broad overview of the jurisprudence on the applicability of s.3(1), we will examine two seminal judgments proposing contrasting approaches to the question. In Ramakant Kini v. Hiranandani Hospital, there was an exclusive supply agreement between Hiranandani Hospital and Cryobank Ltd. in respect of stem-cell banking services. Effectively, the agreement meant that customers of Hiranandani Hospital could only avail of stem cell banking services from Cryobank; it could not be independently provided by Hiranandani Hospital. This was challenged as being anti-competitive, as a vertical exclusive supply agreement under s.3(4)(b). The relevant holding can be found in paragraph 11 of the decision: “Section 3(3) and section 3(4) are expansion of section 3(1) but are not exhaustive of the scope of section 3(1)…Section 3(3) carves out only an area of section 3(1). The scope of section 3(1) is thus vast and has to be considered keeping in view the aims and objects of the Act…This makes it abundantly clear that scope of section 3(1) is independent of provision of section 3(3) & 3(4).” From the above, it can be inferred that s.3(1) should be expansively interpreted considering the objectives of the Act, including consumer welfare and freedom of trade (see the Preamble of the Competition Act, 2002). The other case is Alkem Laboratories Ltd. v. CCIi in which the Competition Appellate Tribunal holds the following: “Section 3(1) is the general sub-section which legally intended to cover the overall principles of breach of either Section 3(3) or 3(4) of the Competition Act. Conclusion of breach of Section 3(1) in the absence of findings relatable to breach of Section 3(4)(d) in this case against Alkem is bad in law.” The decision reasons that if indeed s.3(1) were legislatively intended to be independently applied, then there would be no need for s.3(3) and s.3(4), since the former has such a catch-all phrasing that it would in any case include agreements contemplated under s.3(3) and s.3(4) rendering them superfluous. This is an objection often reiterated in existing literature. At first glance, both cases acknowledge that s.3(1) is general and vast in scope. They only differ in their theories of why s.3(1) is so broad. On the one hand, Ramakant’s take is that the breadth of s.3(1)’s scope is evidence that the legislative intent was to contemplate agreements beyond the horizontal-vertical dichotomy. On the other, Alkem Laboratories opines that s.3(1)’s breadth only means that it is a general section “legally intended to cover the overall principles” of s.3 – it is not meant to apply independently of s.3(3) and s.3(4), but rather in conjunction with them. I argue that Alkem’s reasoning is suspect for two reasons. First, if all s.3 was ever meant to contemplate was horizontal and vertical agreements, then there would be no reason for having s.3(1) in the first place. This is because s.3 would remain internally cohesive even if s.3(1) were removed, or never existed to begin with. Second, CCI’s characterization of s.3(1) as a provision that merely mentions “overall principles” related to s.3 breach is unprecedented both in statute as well as CCI’s decisional practice. In any case, it is unclear why these principles would be required to begin with – all the potentially ambiguous terms used in s.3(3) and s.3(4) are defined or otherwise clarified in the statute. For instance, “agreement” is defined under s.2(b), “cartels” under s.2(c), “appreciable adverse effect on competition” (AAEC) under s.19(3) and so on. In other words, s.3(1) does not enumerate any principles as such, without which s.3(3) and s.3(4) would become impossible or otherwise difficult to interpret. This further renders Alkem’s reasoning untenable. In the following section, I will consider the same line of objection in greater detail. Is the Alkem Laboratories Objection Sound? The objection apparent from Alkem is that if we allow a standalone interpretation of s.3(1), the provision is so broad and catch-all that it will render s.3(3) and s.3(4) redundant. Proponents of this view might also rely on an argument from parliamentary intent to argue that the intention was to categorize anti-competitive agreements into horizontal and vertical agreements only.  In this section, it is argued that it is incorrect to say that s.3(3) and s.3(4) become infructuous altogether. S.3(3) and s.3(4) do not become altogether infructuous  It is undisputed that s.3(1) is expansive in its phrasing and sets out a framework that broadly covers horizontal and vertical agreements contemplated under s.3(3) and s.3(4). However, we must not hasten to say that this would, per se, render the s.3(3) and s.3(4) infructuous, for the latter two provisions differ from s.3(1) in two salient ways. They may be considered independently. S.3(1) and s.3(3) The difference between s.3(1) and s.3(3) may be considered first. To prove a case under s.3(1), the CCI has to show that an agreement causes or is likely to cause AAEC. Typically, AAEC is established with reference to factors enumerated under s.19(3). So, under s.3(1), the

[By Yatendra Singh] The author is a student of Dr Ram Manohar Lohia National Law University, Lucknow.   ​​​Introduction  ​​In the complex landscape of competition law, uncovering and prosecuting cartels remains a formidable challenge worldwide. India’s recent introduction of the Competition Commission of India (Lesser Penalty) Regulations, 2024 marks a significant stride towards enhancing antitrust enforcement. This article explores how these regulations incentivise cartel disclosure through leniency provisions akin to global standards, aiming to strengthen fair market practices. By examining the impact and nuances of these measures, this discussion underscores their pivotal role in shaping India’s competitive economic environment.​  For instance, cartelisation is not a new phenomenon. In the 1800s, powerful trusts like the Standard Oil Company had ​​monopolized crucial sectors in the United States, controlling prices and stifling competition. The unchecked power of these trusts led to market disruption, escalating prices, and compromising consumer welfare. In response, the US enacted its first Competition Act, the Sherman Antitrust Act, in 1890 to address these abuses, signalling the need for anti-trust legislation to curb monopolistic practices and safeguard economic and consumer interests.  ​​​While these laws are good for regulating the market and punishing those who break it, ​however​, they are not sufficient to unearth hidden Cartels. In fact, India’s first Anti-trust Act (Monopolies and Restrictive Trade Practices Act 1969) was replaced because it became redundant after India’s new economic policy in 1991 and the globalisation of the market. Cartels, by their nature, are hidden and secret. Cartel cases are difficult to investigate and detect because of the scope and complexity of many cartels. The conspiracy can be established through both direct and indirect means. ​​Often, only the participants know exactly how the cartel works. According to MIT economist Alexander Wolitzky, participants typically become aware of cartel activities through various channels, including industry conferences, informal networks among competitors and conventional wisdom.  Therefore, the Competition (Amendment) Act 2002 and new regulations in the leniency scheme, namely The Competition Commission of India (Lesser Penalty) Regulations, 2024, become important. This new amendment aims to unearth hidden cartels by offering an additional reduction in monetary penalty. It will be interesting to see how these new regulations play out in a market that operates through digital platforms, where detecting cartels becomes even more challenging.  ​​Cartels​  Cartels are defined under section 2 of the Competition Act as an association of producers, sellers, distributors, traders, or service providers who, by agreement amongst themselves, limit, control, or attempt to control the production, distribution, sale, or price of, or trade in goods or provision of services. A cartel is usually understood to be formed by a group of sellers or buyers who bond together and try to eliminate competition. Supreme Court defined cartels in ​​Union of India vs Hindustan Corporation Limited as an association of producers who, by agreement among themselves, attempt to control the production, sale, and price of the product to obtain a monopoly in any particular industry or commodity.   Cartelisation is a type of horizontal agreement that shall be presumed to have an appreciable adverse effect on competition under Section 3 of the Act. Horizontal agreement refers to an agreement between two or more parties that are at the same stage of production and on a similar line of production. ​​It is presumed to affect the consumer market adversely, such as inflated prices and reduced choices for cheaper alternatives. This was highlighted in Neeraj Malhotra v. North Delhi Power Ltd, where electricity distribution companies restricted consumer choices by distributing faulty meters, adversely affecting the market by inflating bills, limiting competition, and enabling price manipulation through cartel-like behaviour.  Horizontal agreements are, by their very nature, prohibited by law. In case there is an application of cartelisation against the enterprise, the enterprise has to prove its innocence. Additionally, the Competition Act empowers the CCI to impose penalties and/or fines on the detection of cartels under Section 27 of the Act.   In ​​Express Industry Council of India v Jet Airways (India) Ltd, the Competition Commission of India (CCI) found a cartel involving airlines, including Jet Airways, IndiGo, and SpiceJet, collaborating to fix Fuel Surcharge rates in the air transportation sector. CCI imposed penalties on Jet Airways (Rs. 39.81 crore), IndiGo (Rs. 9.45 crore), and SpiceJet (Rs. 5.10 crore) for overcharging cargo freight under the guise of a fuel surcharge. This action was deemed to violate Section 3(1) read with Section 3(3)(a) of the Competition Act, addressing anticompetitive practices and safeguarding consumer interests. In light of the above case, it is clear that once found guilty of cartelization, Enterprises have to pay a heavy penalty. However, the Competition Act also has a whistle-blower provision that could reduce these penalties up to 100%.   ​​Leniency Provision​  Section 46 of the act deals with the leniency provision. This provision can grant leniency by levying a lesser penalty on a cartel member who provides full, true, and vital information regarding the cartel. The scheme is designed to induce members to help detect and investigate cartels. This scheme is grounded on the premise that successful prosecution of cartels requires evidence supplied by a member of the cartel. ​​Leniency schemes have proved very helpful to competition authorities of foreign jurisdictions in successfully proceeding against cartels. For Instance, The US corporate leniency program has been very successful. Previously, the Department of Justice received about one amnesty application per year. With the introduction of the new policy, however, this rate has surged to approximately two applications per month. Notably, amnesty awards have been pivotal in several prominent cases, such as the Vitamins investigation, where the applicant received a substantial fine reduction totalling nearly $200 million.  Similarly, In India, In Anticompetitive Conduct in the ​​Dry-Cell Batteries Market in India Vs Panasonic Corporation and Others The commission finds that Panasonic Corporation and its representatives provided genuine, full, continuous, and expeditious cooperation during the course of the investigation. Thus, the full and true disclosure of information and evidence and continuous cooperation provided not only enabled the Commission to order an investigation into

[By Dhananjay Dubey] The author is a student of Institute of Law Nirma University, Ahmedabad.   Introduction  A Non-Compete Agreement is a legally enforceable agreement in which the “Restricted Party” agrees not to participate in any competitive activities during and for a set period after the termination of their commercial relationship with the “Protected Party.” It is a common tool used by businesses to retain valued employees, protect secret information and customers, and prevent unfair competing activities. Employment terminations, contractor or consultant engagements, corporate partnerships, and mergers or acquisitions are all scenarios that use non-compete agreements. In exchange for accepting the constraints, the Restricted Party must be given consideration, such as job offers or monetary recompense. The Agreement prohibits the publication of confidential information, even after the termination of employment.  FTC’s Ban on Non-Compete Agreements: A Shift in Competition Law  Recently in the month of January 2024, the (Federal Trade Commission) FTC issued a rule to ban non-compete agreements to protect competition across the country. On 23rd April 2024, the proposed rule came into effect after much deliberation. The said rule bans all types of non-compete agreements as violative of Section 5 of the FTC Act which prohibits unfair or deceptive practices affecting commerce. The framework of the rule is broad, prohibiting not only non-compete agreements but also other parallel arrangements that serve similar goals. This rule applies to any agreement that prevents or penalizes employees from exploring opportunities with competing companies.  Under the final regulation, new non-compete agreements for top executives earning more than $151,164 per year and holding major policymaking roles, such as presidents or CEOs, are forbidden, although existing agreements are still lawful. This differs significantly from the proposed regulation, particularly in terms of the treatment of existing agreements and notice obligations. Existing non-compete agreements do not require a formal termination. Firms must notify non-senior executive staff with existing agreements that they will no longer be enforceable once the law is implemented, allowing them to pursue other alternatives. The FTC provides a sample notice for clarity and uniformity, emphasizing employees’ ability to pursue their professional goals unrestricted.  Exception to the Final Rule  Exceptions to the rule exist for certain settings and entities. Firstly, non-solicitation and non-disclosure agreements are exempted, although employers should exercise caution as overly restrictive clauses may still breach the law if they unduly limit individuals from working in the same field. Secondly, the rule does not cover in-term non-compete agreements, which restrict competition during employment. Additionally, entities excluded from the FTC Act, like banks and insurance companies, are not bound by the regulation. Franchisee/franchisor contracts are also exempt, though workers of both parties remain protected. Crucially, the final regulation includes an exception for the sale of a business, allowing non-competes in bona fide sales without mandating a minimum ownership stake, as initially proposed. This exception ensures that genuine commercial transactions are not impeded by the rule.  Referenced assessment with Competition Law in India.  This development marks a significant comprehension of competition law in India. The rationale behind proposing such a rule is that it impedes labor mobility and stifles competition, thereby hindering innovation and the establishment of new businesses. The pertinent question here is whether such a development can be anticipated within the Indian Competition law framework. To address this, a brief examination of existing jurisprudence is necessary. Under Indian Law restrictive covenants such as the non-compete clauses fall under the domain of Section 27 of the Indian Contract Act, which asserts that any agreement pursuance of which prevents or restrains a person from practicing a lawful profession, trade, or business is void to that extent, with an exception for the sale and purchase of goodwill. While non-compete agreements seemingly fall within this provision, the Supreme Court, in the landmark case of Niranjan Shankar Golikari v. Century Spinning, scrutinized the validity of such clauses under section 27 of the Indian Contract Act, 1872, which invalidates agreements restraining trade. Justice J.M. Shelat stressed that while restraints on trade are not inherently against public policy, they must be reasonably necessary to safeguard the employer’s interests, placing the burden of proof on the party advocating the contract. The key factor in this case was the reasonability of the non-compete clauses.  It was further held in the case of Larry Lee Maccllister vs. Pangea Legal Database Solutions by CCI that negotiating conditions at the start of employment, including any constraints on future employment, is a standard procedure that does not pose competition problems. Employees consider these conditions when negotiating salary, demonstrating that such agreements are typical employment practices that have little impact on competition. The CCI determined that limits in employment contracts prohibiting employees from joining rivals after termination do not raise competition concerns. Such limitations are regarded as appropriate in preventing trade secret exposure or harm to businesses. Employment contracts are thorough agreements that lay down the rights and duties of both the parties i.e. the employer and the employee. Restrictive covenants such as non-solicitation, non-disclosure, and non-competition agreements are critical for safeguarding employers’ interests and ensuring contractual balance. It was also reasoned that section 3 of the Competition Act addresses service agreements such as exclusive dealing agreements rather than employment issues. The Act’s purpose is to safeguard rights in rem rather than prohibit them in personam. Personam remedies are provided by CCI to individuals but the dependence of the same is through a problem in rem.   Analysis  The inclusion of restrictive covenants in an employment agreement is critical for preserving integrity and efficacy, benefiting both the employer and the employee by establishing defined boundaries. These provisions ensure that rights and duties are understood by both parties. Non-compete agreements, while necessary, do not meet the standards of section 3 of the Competition Act, 2002, which requires a clear delineation of the market that would bear the impact of the adverse appreciable effect created due to the competition concerns arising out of the said employment agreement. In case a defined market is not outlined, on a bare

[By Satyam Mehta] The author is a student of National Law University, Jodhpur.   Introduction Google has effectively blocked third-party cookies for 1% of Chrome users beginning this year, a move that has been delayed multiple times and was announced a couple of years back. However, despite this, the move has met with criticism from different stakeholders alleging that it strengthens Google’s already well-established monopoly. Consequently, Google has come under scrutiny from the UK watchdog Competition and Markets Authority (CMA). This article is an attempt at carefully analysing the paradigm Google is invariably trying to push, its ramifications and if there is a need for further scrutiny from different watchdogs around the world, especially in India.   Ramifications of the move Firstly, it is imperative to understand what third-party cookies are and what is the difference between third-party and first-party cookies. First-party cookies are what are treated as essential cookies by the Data Protection laws and they are vital to the functioning of the site. They are installed by the website you visit to store some important information, for example your language preference or your login information. Therefore, they are significant because they ease  user experience. On the other hand, third-party cookies can be installed by anyone, for example the ad tech companies, for the purpose of tracking the users across websites and profiling them to sell ads. The data can be accessed by anyone by logging into the third-party server code. Thus, third-party cookies are primarily used for tracking the users across websites and profiling them to display relevant advertisements. It is a no-brainer that these are not exactly privacy-centric and leak the users’ data to the ad tech companies that allow them to sell ads as a result of which the ad tech industry has burgeoned into a 600Bn $ a year behemoth. A 2019 GDPR ruling therefore made these cookies optional and mandated explicit consent to be required failing which a fine will be imposed.  Google aims to effectively phase out these cookies by the end of 2024 and follow in the footsteps of its competitors Firefox and Apple’s Safari that blocked these cookies way back in 2019 and 2017 respectively. Google claims that this is a privacy-centric move that will allow users’ data to be safeguarded from multiple stakeholders especially now that the privacy laws landscape is evolving. An obvious question springs then, why is there such rampant criticism of the move and why is Google being investigated for the same when it is just following the footsteps and the mandates of its competitors and watchdogs respectively. For starters, Chrome has 66% market share and while Apple has historically had a closed ecosystem, chunk of Google’s revenue comes from the advertising business. Google has had a monopoly in the ad tech business so much so that it has been sued by the Justice Department with Attorney Generals of various States coming on board. Thus, the paradigm that Google is pushing for has to be seen with a cautious approach from the side of both the users as well as the advertisers. While the majority of users either don’t really understand cookies or do not care whether their ads are relevant or not as long as the tech companies are not intrusive, this is a concern for the ad tech companies as this would change ad targeting dynamics, probably, in Google’s favour.  With the removal of the third-party cookies, the advertisers have to rely on first-party cookies and while Google has this data in abundance, thanks to its various owned and controlled entities such as YouTube, Maps, etc. the small ad tech companies don’t have such enormous amounts of data as they have traditionally relied on third-party cookies for the same. Thus, it will give Google a chance to strengthen its already strong position in the ad tech industry as the websites are not allowed to track users while the browser still logs their information. This doesn’t exactly promote a level-playing field and instead of promoting user privacy, it just makes Google the sole owner of the user data and to do with it as they please. Subsequently, Google promoted their privacy sandbox initiative that it claims will balance the privacy of the users and the needs of the ad tech companies. It is a no-brainer that there needs to be antitrust scrutiny into Google’s actions as what it is effectively doing is stopping the ad tech companies from collecting their own data while making them reliant on the Privacy Sandbox initiative and small ad tech firms will have to enrol to stay relevant because they do not have the enormous amounts of data that Google has as already discussed. There has been an investigation by the UK watchdog CMA that is ongoing and it has gotten Google to make some commitments but no other regulator has batted an eye as they think that the Britts have got it.  Analysis In the opinion of the author there has to be further scrutiny of Google’s actions and motives, especially in the Indian context as its Privacy Sandbox initiative has also been criticised at length but first, it becomes vital to understand the functioning of the Privacy Sandbox initiative. The browser will group people into different sets using different Application Programming Interfaces on the basis of their interests based on their browsing history. The data will never leave the browser and individual user targeting will be minimised as they will be targeted in sets while sharing generic information with the advertisers. However, upon examining this, it becomes apparent that it is disruptive of the level playing field as Chrome has access to user data at the granular level while the advertisers don’t which might allow it to give preferential treatment to its products. Therefore, Google committed to the CMA that it will not use personal user data in its ad system or discriminate in favour of its own products. However, there hasn’t been the same scrutiny by any other

[By Dhanshitha Ravi & Rishabh Guha] The authors are students of Symbiosis Law School, Pune.   INTRODUCTION Interoperability refers to the synergy between different systems to communicate with one another. Users can access multiple complementary services through a single access point. An example of interoperability in our everyday lives is the ability to upload one’s Instagram content on Meta (erstwhile, Facebook). The Draft Digital Competition Bill, 2024 (Bill), released by the Committee on Digital Competition law on 27 February 2024 mandates interoperability of third-party applications by Systemically Significant Digital Enterprises (SSDEs) i.e., Big Tech companies, on their platforms. This coincides with the European Commission’s active role in clamping down on the practices of Tech giants to an extent where Apple was forced to allow sideloading of applications from native websites and third-party app stores. The move seeks to comply with the interoperability mandate of the Digital Markets Act (DMA) that is effective from March 2024.  At this juncture, though mandating interoperability is in vogue, it is not only crucial to decipher where this modern remedy draws its legal foundations from, but also evaluate the same in the context of technological feasibility.   INTEROPERABILITY: A MODERN-DAY APPLICATION OF THE ESSENTIAL FACILITIES DOCTRINE  Concept of Essential Facilities Doctrine (Doctrine)  Briefly, the Doctrine mandates a duty on the monopolist incumbent controlling such essential facilities to ‘share’ such inputs with the competitors. A four-pronged test was devised based on which an input shall be determined as ‘essential’, if the following factors are satisfied –  A monopolist controls the essential facility  A competitor is unable to practically duplicate the essential facility.  The monopolist is refusing the use of the facility to a competitor  Providing the facility is feasible.  Furthermore, the courts also examine whether the facility should be a necessary input in a distinct, vertically related market. Though, traditionally, the doctrine has been applied to infrastructural facilities (such as railway bridges and telecommunications networks, to name a few), however, scholars have urged its applicability to regulate Big Tech.   Warranting application of EFD to regulate Big Tech  To understand whether the Doctrine can be directly applied while regulating Big Tech platforms, it is vital to consider whether it can be deemed as an essential facility and it is not feasible for the competitors to duplicate the same. Only then it is possible to establish a link between interoperability as a remedy in the modern sense to the sharing of facilities that is mandated, once the court opines that the facility is essential.  Firstly, in evaluating whether digital platforms are truly ‘essential facilities’, the core argument revolves around the assertion that these platforms are the railroads of the modern era which connect groups of consumers on either ends i.e., business users (sellers) and end consumers. Simply put, the usage of these platforms directly determines the volume of business or visibility that a seller gets and correlates to the number of choices that a consumer, by virtue of being a ‘bottleneck’ i.e., a service/an infrastructure that controls a process for which there is no sufficient bypass. This argument can be supported by the Court of Justice in Google and Alphabet v. Commission (Google Shopping case) which held that a search engine represents a ‘quasi-essential facility’ with no actual or potential substitutes. Furthermore, even the Competition Commission of India (CCI) in XYZ v. Alphabet Inc. & Ors. (Google Playstore case) has recognised that Google Playstore is a “critical gateway between app developers and users”, thereby indirectly affirming the theory that these platforms are indeed essential in the modern times.  Secondly, the requirement is that a ‘monopolist’ controls the essential facility. While prima facie reading shows that the tech space witnesses a massive influx of new companies, a deeper probe will reveal that the majority of the market share is still held by Google, Apple, Meta, Amazon and Microsoft (GAMAM), acting as gatekeepers, equivalent to monopolists in the traditional sense. As observed by the CCI in Umar Javeed & Ors. v. Google & Anr. (Google-Android case), the status quo maintained by GAMAM is attributable to strong network effects.  Thirdly, once a facility has been deemed as ‘essential’, the Courts assess whether competitors can reasonably duplicate the facility before mandating sharing. As discussed previously, due to advantages of network effects, it is impossible to duplicate the same without incurring significant costs.  Manifestation of the doctrine  In the EU, the DMA designates certain Big Tech platforms that serve as an important gateway for ancillary markets, as Gatekeepers supplying ‘Core Platform Services’, such as online search engines, online social networking platforms and operating systems, to name a few. Similarly in India, the Bill that draws inspiration from the DMA, designates such core platforms as ‘Systematically Significant Digital Enterprise’ (SSDE) supplying a ‘Core Digital Service’ in India.   Once designated, the entities will have to fulfil a set of behavioural obligations and ensure interoperability of third parties with the gatekeeper’s own services, so as to prevent refusal to access services that act as important gateways for business-to-business and business-to-consumer communication under Section 13 of the Bill and Article 5 of the DMA.   Thus, even though the terminologies differ, at the heart of both the legislations lie the intent to regulate such platforms that possess the characteristics of essential facilities, which if in the traditional sense would have required ‘sharing’, the modern-day application of which is interoperability.  MANDATING INTEROPERABILITY: ESTABLISHING A BOUNDARY  As much as regulating abusive behaviour by these Big Tech platforms is the need of the hour, mandating open sharing of platforms i.e., ‘interoperability’ might be problematic. Currently, the DMA mandates the platform to ensure interoperability and allow sideloading as well.  Technological considerations  It is argued that technology considerations take a back seat while mandating interoperability, thereby not being truly ‘feasible’. Scholar Guggenberger has suggested a renewed approach for the Doctrine wherein after an appropriate amortisation period, the regulator would mandate horizontal interoperability that would require the platforms to provide open access to their Access Point Interfaces (API). This would mean that Amazon would

[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