In less than two months, the Competition Commission of India (CCI) has come under fire twice. In mid-August, it had to withdraw an investigation report on Apple after the tech giant protested information on a probe into its market behavior going public. Recently, Chinese smart phone maker Xiaomi has asked it to recall its report on Flipkart as it contains sensitive business information.
While the CCI is yet to take a decision on the Xiaomi’s request, competition experts said that information leaks from the regulator could undermine the fairness of the investigations that are being carried out, and cast a doubt on the CCI’s ability to safeguard sensitive information. “Such breaches hampers the trust in CCI’s investigations which depend on confidentiality and impartiality,” said Kinjal Katoria, Associate Partner, Khaitan Legal Associates.
For instance, in Apple’s case, the US tech giant complained that some commercial secrets were revealed to its competitors, including Tinder-owner Match. “Confidentiality of the information is important in competition law, as well as the processes followed by the CCI. The CCI deals with corporates and businesses, where there’s a lot of commercially sensitive information,” said Vinod Dhall, former head at CCI.
Experts said that two instances could delay the ongoing investigations. “The CCI already has a long list of cases where the final orders are pending. The regulator has statutory powers to seek information from companies so that it can conduct investigations. But it is also obliged to protect confidential information,”said a former CCI official, asking not to be identified. Some parties can use such instances of leakage of confidential commercial information as an excuse to delay ongoing investigations, leading to delays in merger approvals by the regulator, the person added.
For instance, CCI ordered a probe against Apple in December 2021 after the prima facie evidences suggested that the company abused its market dominance. Since then, the investigation has been facing delays. Similarly, in the case of Flipkart, the probe has been progressing slowly since it began in 2021. “Since the fairness is questioned, the companies are well within their rights to ask for recourse. If recourse is opted for, there would be more delays,” said Katoria.
Dhall said that while the leakage could have been inadvertent the CCI will have to tighten up its processes and ensure that greater care is taken going forward. “Lack of due care and experience at the dealing level could have contributed to the incidents. Some important cases are under the consideration of the CCI,” he said.
“To reinforce trust, they (CCI) needs to take measures to protect the confidential information, to improve public perception about integrity of these investigations and maintain stakeholders’ confidence,” said a competition lawyer.
