Opinion Confidentiality ring amendment could make antitrust disputes more opaque
Srikant Parthasarathy, Amirthalakshmi R write: Unlike the EU, which established rules for a confidentiality ring to protect the information provider, the Competition Commission of India seems to want to protect the defendant, which is usually a large, multimillion-dollar entity
The CCI has decided to establish a confidentiality ring (Source: cci.gov.in) 
The Competition Commission of India (CCI) has realised that disputes arising out of antitrust matters, also known as competition or cartelisation, require confidentiality. The problems that arise in the commission’s investigation under Sections 3, 4 or 5 of the Competition Act are germane to the suo motu powers given to the director-general of the commission, which have now extended toward establishing an opaque confidentiality ring. This was recently used in an order dated March 7, passed by the DG-CCI on the Amazon dispute, wherein Amazon (the defendant) decided to take the confidentiality route towards its submissions.
In Europe, where Amazon has a presence, antitrust matters are largely regulated under the guidance note for Articles 101 and 102 of the Treaty of the European Union, which states: “Through confidentiality rings, DG Competition (EU) can safeguard the rights of defence while respecting the legitimate interests in the confidentiality of the information providers. In addition, confidentiality rings remove or reduce the burden of preparing non-confidential versions of documents.”
In 2015, the EU mandated the creation of a data room to respect the confidentiality of certain documents. The EU has to protect this mandate to ensure that the right of defence is not prejudiced. The CCI has taken an alternative view by vaguely replacing the intent with the regulation which states, “Confidentiality Ring (sic) the Commission may do so after providing a reasonable opportunity to the informant to represent its case before the Commission.” This casts an onus on the informant. Turning to the provider of confidential information, the party seeking confidentiality has to submit reasons and the same must be rebutted by the informant, CCI or any other parties, largely driven by the CCI. The question before the CCI now is whether it must adhere to the rule that every party to a dispute must be heard. Yes, but as redacted by the parties seeking to present the information, at the discretion of the CCI. This presents a two-pronged issue. First, what would happen if the informant seeks additional documents so that the agency is not prejudiced? By hearing parties out,through redacted information the CCI is bound to be questioned as to the reasons for deciding in a certain manner and worse, could stifle the process at the start.
This is likely because the CCI has to hear the objections that the informant may have regarding the reasons for keeping information confidential. But objections could be made only if the defendant can prove beyond a reasonable doubt that the information is confidential. The usual ground for seeking this protection is the defendant’s reputation. However, this defence can be used to indiscriminately to subdue any counter that may arise from the informant, who may not possess the intricate details of how a cartel works.
The second question is about the relief under Section 35 of the Act that empowers the CCI to establish a confidentiality ring including the parties in dispute to disseminate the information for which the confidentiality clause is invoked. However, this is immediately caveated by Regulation 8 of the “Confidentiality Ring” Amendment of April 8, which states that the informant shall not be part of the ring. This will essentially lead the CCI to gather more information surreptitiously for the determination of the case. It has also effectively rejected the informant’s right to know the information, which would be necessary to establish their claim.
This not only empowers the CCI to further its cause of suo motu investigation but also brings secrecy to cases of high-value disputes. The reason the CCI decided to establish a confidentiality ring is the opposite of the EU directive. The EU would like to protect the information provider, but the CCI seems to want to protect the documents of the defendant. This contradicts the intent in regulation 1 wherein the CCI intends to protect the informant and regulation 2, which gives unfettered rights to “parties” in the dispute to summarily drop the confidentiality card which, according to any reasonable person, includes the defendant.
We have imported the “Confidentiality Ring” from the EU but we may have done it in a manner that none of the decisions can be challenged. The protection provided to the informants, unfortunately, turns out to be to the advantage of the defendants, who are usually large multi-billion dollar entities. It enables the CCI to ringfence its investigation creating legal immunity for “all” involved.
This column first appeared in the print edition on April 18, 2022 under the title ‘A lopsided rule’. Parthasarathy is a professor of international law & Amirthalakshmi R is a principal counsel at the chambers of Srikant Parthasarathy
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