Overhauling the Confidentiality Rules
Authored by Zenia Cassinath (Principal Associate)
The Competition Commission of India (CCI) on 8th April 2022 published the CCI (General) Amendment Regulations, 2022 (Amendment) which came into effect from the date of publication. Summarised below are the key provisions relating to the treatment of confidential information pursuant to this Amendment.
The Confidentiality Ring Mechanism
This Amendment introduces a ‘Confidentiality Ring’ mechanism whereby confidential information of one party to a proceeding can be accessed and inspected by certain representatives of the other parties to the proceeding who are part of a Confidentiality Ring. The CCI is responsible for setting up the Confidentiality Ring and has the discretion to decide which parties and their members/representatives (including, employees, chartered accountants, company secretaries, cost accountants and legal practitioners) are to be included in the Confidentiality Ring. The CCI also has the power to direct the extent of (confidential) information to be made accessible to members of the Confidentiality Ring as it deems appropriate
Further, this Amendment provides that members of the Confidentiality Ring are required to furnish two undertakings, the first being an undertaking to the CCI and the second to the party(ies) whose confidential information is being accessed. These undertakings should state that the information accessed pursuant to the Confidentiality Ring, (i) will not be disclosed to any other person including to any official or other employee of the enterprise concerned or its group; (ii) such information and documents shall be used only for the purposes of the proceedings under the Competition Act, 2002 (Act); and (iii) information and documents that have been accessed are to be kept within the sole custody of the members of the Confidentiality Ring, and shall be destroyed upon the culmination of the present proceedings.
For the sake of understanding please note that as per this Amendment, information that results in disclosure of trade secrets; or destruction or appreciable diminution of the commercial value of any information; or can be reasonably expected to cause serious injury can be claimed as confidential. This includes information pertaining to (i) documents / material obtained through search and seizure operations; (ii) email dumps; (iii) call records and details; and (iv) any other document/material in the nature of personal information. Importantly, this Amendment specifically provides that documents / material that have been mentioned in the confidential version of the report of the Director General of the CCI, are to be made accessible to the members of the Confidentiality Ring.
Treatment of Informant
The CCI is to keep the identity of the informant in a proceeding confidential upon receipt of a written request from such party to that effect. That said, the CCI may disclose the identity of such party if the CCI is of the opinion that it is necessary or expedient to do so for the purposes of the Act, provided that the informant has been given a reasonable opportunity to represent its case.
Separately, while the informant is not ordinarily part of the Confidentiality Ring and can only access non-confidential records, the informant can be included in the Confidentiality Ring in appropriate cases, if the CCI is of the opinion that the inclusion of the informant in the Confidentiality Ring is necessary or expedient for effective inquiry.
Requirement for self-certification
Parties seeking confidentiality are required to provide an undertaking which can be filed either by the party itself or its authorised employee. This undertaking must self-certify that if document(s) or information over which confidentiality is sought is made public there will be a disclosure of trade secrets; or destruction or appreciable diminution of commercial value of any information; or can be reasonably be expected to cause serious harm. Further, the party seeking confidentiality is also required to confirm that (i) the information is not available in the public domain; (ii) the information is known only to limited employees, suppliers, distributors, and others involved in the party’s business; (iii) that adequate measures have been taken by the party to guard the secrecy of the information; and (iv) that the information cannot be acquired or duplicated by others.
Treatment of the CCI officers
Pursuant to this Amendment any officer or employee appointed by the CCI, any officer appointed by the Central Government, and any expert called upon to assist the CCI that is privy to confidential information, is under an obligation to maintain confidentiality of the same and shall not use or disclose or deal with such confidential information for any purpose other than the purposes of the Act or any other law in force, further providing that breach of confidentiality by any such persons shall constitute a ground for initiation of disciplinary proceedings under the relevant rules or regulations of the Indian competition regime.
Key take aways
This Amendment not only streamlines the existing confidentiality regime, but also introduces the Confidentiality Ring mechanism which has the effect of ensuring greater transparency in the CCI’s adjudicatory process since parties to a proceeding will inter-aliahave access to information that has been relied on during investigation process. Further, given the checks and balances mentioned in the Amendment, including but not limited to recourse to suitable remedies under the Act and other laws, the CCI has also ensured that commercially sensitive information is protected against disclosure.