Confidentiality and Ring Fencing: Pitfalls the Competition Commission of India must avoid

it is imperative for the Commission to ensure that the Confidentiality Ring does not become a tool for parties with mala fide intent to extract the disclosing parties’ confidential information.
Confidentiality and Ring Fencing: Pitfalls the Competition Commission of India must avoid
CCI Competition Commission of India

In April 2021, the Competition Commission of India introduced the Competition Commission of India (General) Amendment Regulations, 2021, whereby Regulation 35 of the Competition Commission of India (General) Regulations, 2009 was sought to be modified.

The Commission proposed amendments to its confidentiality provisions, related to requests made by parties during proceedings under the Competition Act, 2002. The amendments include the setting up of Confidentiality Rings, bodies which will comprise authorized representatives of parties who wish to review the entire case records, including commercially sensitive and confidential information, subject to appropriate undertakings against disclosure of such information.

This move prima facie appears to be a welcome addition to the Indian competition law regime; Confidentiality Rings have been an accepted concept in mature jurisdictions such as the European Commission. However, such measures should not dissuade from the fact that protection of confidential information plays a pivotal role in any investigation undertaken by the Commission. It is pertinent to note that the Commission has extensive access to sensitive information of the enterprise under investigation and this makes it necessary for any confidential information obtained to be given due protection.

Therefore, a key challenge before the Commission in the face of the introduction of Confidentiality Rings would be to balance the need to protect confidential information of the parties vis-à-vis the need to have a transparent and fair investigation.

Ergo, it is imperative for the Commission to put in place necessary checks and balances to ensure that commercially sensitive information is not disseminated to the public at large, and that the Confidentiality Ring does not become a tool for parties with mala fide intent to extract the disclosing parties’ confidential information.

Amendments introduced by the Commission

Though the Commission has revised a substantial portion of Regulation 35 of the General Regulations, this article shall only highlight the portions concerning the introduction of Confidentiality Rings.

Through the amendment to Regulation 2(6), the Commission has stated that it has the power to set up Confidentiality Rings comprising such authorized representatives of the relevant parties that may expedite the proceedings. Further, a similar Confidentiality Ring may be set up at the Director General (DG) level, if access to unredacted data is required to be given to the parties concerned for the purposes of the investigation.

However, the provisions of Section 57 of the Competition Act cast an obligation on the Commission to maintain confidentiality over information disclosed during its proceedings. Therefore, Confidentiality Rings are to be treated as an exception to the legal duty on the Commission to maintain confidentiality in its proceedings.

Grounds for setting-up Confidentiality Rings

It is of utmost importance for the Commission to set out the limited grounds on the basis of which Confidentiality Rings may be permitted in any given case. The proposed amended regulations at present do not specify any such grounds/basis, which could cause lack of clarity and misuse of these provisions.

Owing to the potential misuse of Confidentiality Rings, the EC had the foresight to set out clear grounds for their establishment in any given case. For instance, as per EC, disclosure of confidential information (including through confidentiality rings) is only allowed when:

(i) such disclosure is necessary to prove an infringement, or

(ii) safeguard the rights of defence of the parties.

Parties’ right to propose a confidentiality ring

As per the present text of the proposed amendment, it is not clear when the process to set up a Confidentiality Ring may be triggered. Furthermore, it has not been clarified whether a Confidentiality Ring can only be set up by the Commission of its own accord, or whether the Commission may also set up a Confidentiality Ring based on a reasoned application from a concerned party to the proceedings. In case the latter is also envisioned, the same must be made explicit as it will allow parties to have some say in the process and will not be deemed as the unilateral prerogative of the Commission.

Additionally, how parties get the opportunity to set up a Confidentiality Ring must be consistent with the procedure followed in various other jurisdictions. For instance, in the EC, the relevant guidance note states that the DG Competition may decide to propose a Confidentiality Ring, either on its own motion or upon a request from a Statement of Objections (SO) addressee. This means that an SO addressee or information provider may propose that the DG forms a Confidentiality Ring, but the DG has the discretion to accept or reject the proposal.

Objections to setting up of a Confidentiality Ring

Given the fact that Confidentiality Rings involve disclosure of commercially sensitive information of one party to another, the concerned party whose information is proposed to be disclosed (whether it is the opposite party, the informant, or a third party) should be given a right to object to the setting up of such a ring and provide its detailed reasons for raising such objections. Thereafter, the Commission can take a more informed decision on whether to set up a ring in that particular case. This will also mitigate the risk of the process running afoul of Section 57 of the Competition Act.

In other jurisdictions, consent of both parties (the disclosing and the recipient party) is a prerequisite for establishing Confidentiality Rings. Even the International Competition Network's best practices suggest that the disclosing party must be afforded a right to express its views on such disclosure of confidential information. This would mitigate the risk of certain parties getting involved in proceedings only to gain access to confidential information of the other party. Therefore, providing a party with the right to object to setting up of a Confidentiality Ring will ensure that the Commission takes a more informed decision in any given case.

Undertaking by Confidentiality Ring members

As per the provisions under the amendment regulation 2(7), the members of the Confidentiality Ring will gain access to the unredacted and confidential version of the case records, subject to their having filed an undertaking stating that the information accessed by them pursuant to such confidentiality ring is not shared/disclosed by them to any other person and that the use of such information and documents shall be limited for the purposes of the proceedings before the Commission/office of the DG.

Such an obligation on the members of the Confidentiality Ring is of crucial importance, as it would ensure that confidential information provided under the aegis of the Confidentiality Ring is not disseminated to the public at large, at the detriment of the disclosing party. However, to ensure consistency in the undertakings submitted by various parties, it may be beneficial if the Commission prescribes a standard template/format for such an undertaking. This would ensure uniformity and harmony amongst the Confidentiality Ring members who may gain access to each other’s confidential information.

Informants may not be a part of the Confidentiality Ring

The Commission in its amended regulation 2(11) has explicitly stated that the informant/complainant shall not be a part of the Confidentiality Ring, and therefore, shall not have access to unredacted confidential submissions of the parties. Such a regulation is essential, as it would deter persons from filing frivolous complaints solely to gain access to a responding party’s confidential data.

However, the amended regulation has a proviso whereby the Commission/DG may consider the informant to be a part of the Confidentiality Ring in case it is deemed necessary and expedient for effective investigation or determination of cases. In the event it is determined that an informant should be made part of the Confidentiality Ring, it would be prudent for the Commission/DG to grant the opposite parties/third parties an opportunity to raise objections to such inclusions.

This would also be consistent with the principles of natural justice, which mandate that a party should be provided with an opportunity of being heard before any adverse order is passed against it.


The Commission's amendments to the ever-evolving competition law regime in India are welcome. However, confidentiality being a cornerstone of competition law that has enabled it to operate efficaciously, any legislation that may compromise this aspect will have to be introduced with utmost care and consideration.

We are still at a very nascent stage of development vis-à-vis competition law in India, and the ramifications that disclosure of confidential information may have, both legally and commercially, may yet be unknown to us. Therefore, the Commission must ensure that consent of the disclosing parties is always taken into consideration while setting up a Confidentiality Ring in any given case.

The author is a Managing Associate at L&L Partners Law Offices.

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