Confidentiality ring amendment could make antitrust disputes more opaque 

News: Recently, the Director General of Competition Commission of India (CCI) has issued orders on the Amazon dispute. In this dispute, Amazon (the defendant) has decided to take the confidentiality route towards its submissions. 

The CCI has realised that disputes arising out of antitrust matters, also known as competition or cartelisation, require confidentiality.  

The problems that arise in the CCI’s investigation under Sections 3, 4 or 5 of the Competition Act are relevant to the suo motu powers given to the director-general of the commission, which have now extended toward establishing an opaque confidentiality ring. 

What are the international practices on Confidentiality in Anti-trust matters?  

In Europe, the confidentiality rings are provided under Articles 101 and 102 of the Treaty of the European Union. The 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.  

What are the laws about confidentiality ring in anti-trust matters in India? 

India has imported the “Confidentiality Ring” from the EU. The Section 35 of the Act empowers the CCI to establish a confidentiality ring. It includes dissemination of the confidential information among the party to the disputes for which the confidentiality clause is invoked.  

The Competition Commission of India provides the confidentiality ring. However before doing so it provides a reasonable opportunity to the informant to represent its case before the Commission. 

The onus is on the informant to submit reasons to become a provider of confidential information, and seek confidentiality. The defendant has to prove beyond a reasonable doubt that the information is confidential.  

What are some associated issues? 

It can lead to prejudice against one agency. It happens if the informant seeks additional documents.  

In confidentiality related issues, the CCI is bound to be questioned when redacted information is provided to the party. 

The usual ground for seeking confidential information protection is the defendant’s reputation. It can be indiscriminately used to subdue any counter that may arise from the informant. 

How has the CCI’s approach been different from the EU’s approach and why is it important? 

The Regulation 8 of the “Confidentiality Ring” Amendment has furthered the confidentiality ring law in India. 

The new amendment has declared informants not to be part of the ring. It will reject the informant’s right to know the information. This information is necessary to establish their claim. 

Now, the CCI has decided to establish a confidentiality ring to protect the documents of the defendant instead of informants. 

It will empower the CCI to further its suo motu investigation. It will add secrecy to cases of high-value disputes.  

The CCI has taken such a move so that none of the decisions can be challenged. It is because the protection provided to the informants, unfortunately, turns out to be to the advantage of the defendants.  

Source: The post is based on an article “Confidentiality ring amendment could make antitrust disputes more opaque” published in the Indian Express on 18th April 2022.