India: Competition Law: Role Of Informant V. Case For Filing Of Information

Over the years, the informant has played a key role in highlighting the antitrust practices. Competition Commission of India ("CCI") has primarily relied upon the information(s) filed before it to fulfil and undertake the tumultuous and uphill task entrusted to it. The task of preventing practices having adverse effect on competition, promoting, and sustaining competition in markets, protecting the interests of consumers etc. and for matters connected therewith or incidental thereto.

One would believe a statutory regulator not to be antithetical to something which is a function of the legislative intent. However, ironically the proceedings before the Indian competition regulator (CCI) is, in some sense, marred by dichotomy in so far as the regulator, conscious of its duty to prevent practices having an adverse effect, has sought to encourage filing of 'information' on one hand whilst it has sought to restrict the role played by informants in the proceedings before it, on the other.

It is rather interesting that as a matter of practice, CCI also seeks an undertaking from the informant (at the time of filing of the information) that it has no prior/ pending dispute/ litigation with (any) opposite party(ies).

The Competition Act, 2002 ("Competition Act") does not define 'information' or 'informant'. However, the CCI (General) Regulations, 2009 ("CCI General Regulations") define 'party' which includes an 'information provider', apart from a consumer or an enterprise or a person defined under the Competition Act. Summarily, as per the CCI General Regulations an information provider (that is, an informant) has the status of 'party' to proceedings before CCI and thus ought not to be discriminated against by short circuiting of its rights.

Provisions for cross-examination by/of 'parties' are laid out under the CCI General Regulations; as are the rights to seek confidentiality on inter-alia documents furnished before CCI or Director General ("DG") during investigation. The intention of the legislature is clear when Competition Act associates and assigns these rights and processes to "parties"; and not discriminate between informant and opposite parties.

The constitutional courts in India as well as the CCI granted cross-examination of informant by the opposite parties and vice versa. Cross-examination of informant has been relied upon by the erstwhile Competition Appellate Tribunal (now merged into National Company Law Appellate Tribunal) to decide matters. In some cases the order of the CCI have been set-aside on account of facts that emerged from the cross-examination of the informant by the opposite parties.

Any notion which therefore restricts the role/participation of 'informants' during the course of proceedings before the CCI would be antithetical to CCI's objective of encouraging persons (including individuals and entities) to file information as the underlying incentives would be greatly reduced if their participation in the proceedings are restricted. 

It is undeniable that the relatively short history of CCI (that is, since the operation of the Competition Act in 2009) has brought to light the tremendous 'assistance' provided by the 'informants' in India; ergo the informants' contribution to Indian competition law jurisprudence is invaluable. However, their 'locus' to approach the antitrust regulator has been challenged in various proceedings. Does a 'person' have to be 'personally aggrieved' before 'it' can be permitted to approach the competition regulator?

The Supreme Court of India in Samir Agarwal vs. Competition Commission of India has answered this in the negative - whilst stating that when the CCI performs inquisitorial, as opposed to adjudicatory functions, the doors of approaching the CCI must be kept wide open in public interest. Clarifying that the issue here therefore was only one of 'nexus'.

CCI as well as the appellate tribunal have observed that the Competition Act imposes no requirement of a necessary nexus between an informant and direct or indirect effect caused due to the complained/ alleged violation (subject matter of information) on the informant in order to enable an informant to approach the CCI . Therefore, any person whether personally aggrieved or not, has the right to approach the CCI by filing an information under the Competition Act.

In fact, the Competition (Amendment) Act, 2007 replaced the term 'complaint' with 'information' which is also reflective of the legislature's intent to broaden the sources from which the antitrust regulator could take cognizance of anti-competitive practices.

In the European Union ("EU"), any person may approach the antitrust regulator by filing an informal complaint. However, a formal complaint may be lodged only by a 'person' who has a 'legitimate interest' in the case particularly those which are direct competitors or consumers of the potentially infringing party thereby allowing such a complainant to participate in proceedings of the regulator. Similarly, in the United Kingdom ("UK"), although any person may approach the antitrust regulator with information, the status of formal complainant is only granted to a person whose interests are, or are likely to be, materially affected by the conduct which is the subject matter of the complaint. The grant of such status entails certain rights of participation in the proceedings of the regulators.

In contrast to EU and the UK, the Indian regulator grants a person the status of an 'informant' regardless of whether such person is aggrieved or directly interested in the conduct which is alleged to have occurred.

This begs the question of the nature of role that an 'informant' plays in the proceedings before the CCI after an information has been filed and CCI has taken cognizance thereof. There have been several cases where CCI passed final orders not initiating investigations because the 'informant' did not/could not provide enough evidence and/ or substantiate the allegations of anti-competitive conduct. Whilst in these cases the position of CCI can be inferred to lay the onus on the informant (to lead/supply enough evidence to satisfy the CCI to pass a prima facie order initiating investigation); but the position of 'informant' assumes on-need-to-know-basis after CCI decides to initiate the investigation. Confusing; isn't it?

This conundrum surrounding the nature and extent of an informants' role is further aggravated as CCI has observed that once an information has been filed, the role of informant would be confined to such assistance, as may be required by CCI.

A construction which restricts the role of the informant to only an 'information provider' would be wholly against the scheme of the Competition Act. The Supreme Court of India's elimination of the narrow concept of 'locus' cannot, by any stretch of imagination or creative interpretation, be construed to mean that the role of informant before the proceedings of the CCI can be subdued.

Any assertion that informant's role is confined to only such assistance as may be required by the CCI, would be contrary to the legislature's intent which has clearly envisaged an active role on part of the informant including by providing suggestions/ objections to the DG investigation report.

The investigation by the DG, often, begins by initiation of communication with the informant who assists the DG by disclosing the possible sources of evidence thereby facilitating the collection thereof. The written legal submissions of informants to the investigation report as well as arguments advanced by the informants before the CCI have resulted in not just development of antitrust jurisprudence but also led to imposition of deterrent penalties on the offenders of Indian antitrust law which directly resulted in protection of consumer interest.

In order to have a balanced, stable and encouraging Competition law regime; it is inevitable that that the informant's role should neither be restricted nor ignored.

This article was first published by the Legal 500 on 14 January 2022.

Footnote

1. Jennifer Nash and Daniel E. Walters in their paper "Public Engagement and Transparency in Regulation: A Field Guide to Regulatory Excellence available at "https://www.law.upenn.edu/live/files/4709-nashwalters-ppr-researchpaper062015.pdf

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