This article is written by Shubha Ojha who is pursuing a Certificate Course in Competition Law, Practice And Enforcement from LawSikho.

“Marking it confidential for the protection of businesses, trade secrets, and for securing identity”

Statutory protection has been conferred upon enterprises who do not wish to get information related to them disclosed by virtue of Section 57 of the Competition Act, 2002 and Regulation 35 of the Competition Commission of India (General) Regulations, 2009 [hereinafter, “the CCI Regulations”]. Thus, the principle of confidentiality is engrained in the competition law framework of India. Section 60(1) of the erstwhile Monopolies and Restrictive Trade Practices Act, 1969 [hereinafter, “the MRTP Act”] laid down a provision similar to the stipulation under Section 57 of the Competition Act, 2002 [hereinafter, “the Act”], however, sub-sections (2) and (3) of Section 60 prescribed certain exceptions. Section 57 of the Act is not subject to any such exceptions or limitations.

While contesting a case, enterprises are allowed to plead before the Competition Commission of India [hereinafter, “CCI”] to treat certain information as confidential, however, the enterprises must furnish reasons in order to substantiate their plea to the satisfaction of the CCI (SAIL v. CCI, 2011). Additionally, it has been opined by the Madras High Court that akin to the anti-dumping law, even in the context of the competition law regime, excessive and unwarranted claim of confidentiality defeats the right to appeal of the parties concerned (NMIPL v. CCI, 2014). In the context of investigation conducted by the Director-General, the CCI Regulations provide that the Director General’s report may be submitted in two parts-

One of the parts shall contain the documents to which access to the parties may be accorded and another part shall contain confidential and commercially sensitive information and documents to which access may be partially or totally restricted. (Proviso to Regulation 20(4))

Thus, the Director-General is empowered to grant absolute or partial confidentiality to documents and other information, that are considered commercially sensitive. Confidentiality ensures protection of trade secrets, protection of identity and prevention of reputation loss (Verma & Saurabh, 2020).

Is Denying Access to Information Illegal, Arbitrary and Unconstitutional?

When commercially sensitive information is in question, the enterprise furnishing the information is under the risk of the data being disclosed or leaked. Moreover, because the investigation involves allegations of anti-competitive conduct, the enterprises run an additional risk of loss of reputation and goodwill (Ericsson v. CCI, 2016). It was, therefore, observed by the Delhi High Court in Ericsson v. CCI that the CCI, the DG and employees of the CCI are under a mandate to preserve secrecy and confidentiality of the sensitive information provided by the enterprises and they must take adequate measures towards maintaining the same. Negligent conduct on their part leading to failure in maintaining confidentiality may attract a claim of loss or damages.

Though by virtue of Regulation 37 of the CCI Regulations, on the basis of a written application to the Secretary, a party to a proceeding may be allowed to inspect or obtain copies of the documents or records submitted during proceedings on payment of fee as specified in regulation 50, the said right remains circumscribed by the restriction on disclosure of information as provided under Section 57 of the Act. In this connection, the Delhi High Court held as follows:

“Thus, it is clear that the entitlement of a party to the proceedings to inspect the documents or to obtain copies of the same is not absolute and it is always open to CCI to reject permission for inspection or furnishing copies if it is of the view that the documents/information require confidential treatment.” (Somi v. UoI, 2017)

In one case, the CCI was faced with an argument regarding violation of principles of natural justice on account of non-provision of Google’s confidential information (Vishal v. Google, 2018). While finding the argument baseless and without any merit, CCI stated that accepting such an argument would render Section 57 of the Act and Regulation 35 of the CCI Regulations nugatory.

Carving out Exceptions to the Confidentiality Principle

Under the purview of the Competition Act, 2002, Section 57 stipulates 2 grounds on the basis of which confidentiality can be waived:

1. Previous written permission of the enterprise concerned; and
2. For the purposes of the Act or any other law for the time being in force.

Regulation 47 of the CCI Regulations lays down grounds for waiving confidentiality while a proceeding is ongoing. The said provision stipulates that the proceedings before the CCI shall not be open to public, however, the Commission may direct otherwise after recording reasons for the same. For deciding whether the proceedings can be held open to the public, Regulation 47 lists down the following factors that can be taken into account by the CCI:

1. Whether any significant harm would be caused to a party by the disclosure.
2. Level of encouragement or inhibition in making the information public.
3. Conduct of the proceeding in an efficient and proper manner.
4. Resources of CCI.

Regulation 6 of the Competition Commission of India (Lesser Penalty) Regulations, 2009 [hereinafter, “the LPR, 2009”] provides that the applicant’s identity and the data, documents and evidence furnished by the applicant under Regulation 5 shall be treated as confidential. The proviso to the regulation, on the other hand, specifies the following three conditions under which the identity of the applicant or such date, information, documents or evidence may be disclosed-

1. Where the disclosure is mandated by law; or
2. Where the applicant has provided a written consent for disclosure; or
3. Where there has been public disclosure by the applicant himself.

Conclusion: Counterbalancing the Tilting Pressure of Natural Justice

The strife between confidentiality law and natural justice has existed since time immemorial. Section 46 of the Act is reflective of the relaxed attitude of the Indian competition regulator. Apropos to the provision of Section 46, the CCI may impose lesser penalty in case the violator has made a “full and true disclosure” with respect to the information in question and such “disclosure is vital”. The CCI has the discretionary power to determine what is “full and true disclosure” and which “disclosure is vital” (Verma & Saurabh, 2020). 

In the case of NSK Limited and Ors., the CCI granted the benefit of reduction in penalty of 100% to NSK, while taking into consideration the fact that NSK had provided vital disclosures by submitting substantial and quality evidence and had cooperated genuinely, fully, continuously and expeditiously throughout the investigation and further proceedings before the CCI. 

In the same context, there has emerged the concept of “confidentiality rings”. Under EU law, a confidentiality ring is a procedure of negotiated disclosure wherein a restricted circle of individuals is given access to confidential information (Balancing Confidentiality, 2019). The lawyers or individuals in the said circle undertake to abstain from revealing the content of the confidential information or nature of the data to anyone outside of the so-called confidentiality ring, including their own clients (Good Concrete, 2017). Following the lead of EU, the CCI has also started resorting to “confidentiality rings”. Additionally, the CCI has put in efforts to accelerate a bilateral exchange of information which allows for an expeditious investigation process. In the backdrop of endeavours on part of the CCI to assure effective confidentiality, India can be said to fulfil the standards of best practices.

References

Steel Authority of India Limited v. Competition Commission of India & Ors., 2011 SCC OnLine Del 2117 (“SAIL v. CCI, 2011”)

Nissan Motors India Private Limited (NMIPL) v. The Competition Commission of India, 2014 CompLR 187 (Madras) (“NMIPL v. CCI, 2014”)

Telefonaktiebolaget LM Ericsson (PUBL) v. Competition Commission of India and Ors., (2016) 4 Comp LJ 122 (“Ericsson v. CCI, 2016”).

Somi Conveyor Beltings Ltd. and Ors. v. Union of India and Ors., W.P.(C) 1416/2016 dated 11.04.2017, Delhi High Court (“Somi v. UoI, 2017”)

Vishal Gupta and Ors. v. Google LLC and Ors., C. Nos. 06 and 46 of 2014, decided on: 12.07.2018 (“Vishal v. Google, 2018”)

Bhumesh Verma and Shashank Saurabh, Making Sense of the Confidentiality under the Competition Law Regime, (2020) PL (CL) March 80

In Re: NSK Limited and Ors., Suo Motu Case No. 07 (01) of 2014, decided on: 09.08.2019

Balancing Confidentiality Claims with Due Process Requirements (2019), https://www.mondaq.com/india/antitrust-eu-competition-/848748/balancing-confidentiality-claims-with-due-process-requirements

Goode Concrete v. CRH, [2017] IEHC 534 (“Good Concrete, 2017”)

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