[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 global competition authority processes. A central tenet of these guidelines is balancing transparency with the protection of business secrets to maintain trust and encourage thorough participation in investigations.
India’s current competition law framework in contrast notably lacks such detailed protocols for handling confidential information. The absence of explicit guidelines on what qualifies as confidential and how it should be protected means that businesses may not have clear expectations regarding confidentiality during enforcement proceedings. In simple terms, the problem with India’s competition law framework is that it doesn’t have clear rules about how to handle private or secret information (confidential information). This means businesses don’t know exactly what will be kept secret and how, especially when they are involved in legal issues with the government. Without these clear rules, businesses may feel unsure and unprotected about sharing important information during legal processes, leading to a lack of cooperation and general mistrust toward the regulatory commission.
Approach of the European Union
It is noteworthy that the European Union has consistently demonstrated exemplary adherence to the majority of the recommendations detailed in the aforementioned documents. The European Union document on the use of confidentiality rings in antitrust proceedings provides a comprehensive overview of how their competition regime works. It details the legal framework, procedural specifics, and guidelines for establishing confidentiality rings (mechanisms that restrict access to confidential information to a specific group of designated individuals). This process involves a structured negotiation for a disclosure agreement that delineates the responsibilities and terms for all parties involved, including procedures for maintaining document confidentiality and their eventual destruction after case resolution.
The EU has specific templates and clear procedures to follow the law and protect procedures during antitrust cases. They have detailed instructions on how to manage secret information. However, India as mentioned before also does not even have a set way to handle and safely get rid of confidential documents after legal cases are finished. This shows a big gap in the steps needed to enforce competition law effectively in India, but more than that the importance and relevance that is given to confidentiality as a metric.
Conclusion
The confidentiality conundrum within India’s competition framework, as highlighted by the recent CCI order involving Swiggy, underscores the necessity for more robust and transparent measures to protect sensitive business information. While the CCI has made strides to enhance its confidentiality practices, including the introduction of confidentiality rings and amendments to existing regulations, these measures may still fall short of international best practices recommended by the ICN and observed in jurisdictions like the European Union.
More than just changes in policies it is more important at the moment to have a change in philosophy and how confidentiality is treated in the legal sphere. Privacy and data are the next big thing, equally if not more important in the realm of competition law.
The lack of clear, detailed guidelines for handling confidential information, the absence of systematic procedures for document destruction, and the inadequate communication of internal safeguards highlight significant areas for improvement. To align with global standards, India should implement specific measures such as establishing statutory guidelines for the classification and handling of confidential information, creating detailed protocols for the destruction of sensitive documents post-investigation, and enhancing transparency by publicly disclosing internal safeguards. Additionally, adopting confidentiality rings with clear criteria and access limits would further protect sensitive business information during legal proceedings.