A look at the CCI’s process for pre-filing consultation

The Competition Commission of India (CCI) announced in late March that it would expand the scope of pre-filing consultation to include substantive issues regarding filing of notice with the CCI, in addition to the existing consultation facility on procedural aspects. The pre-filing consultation would continue to be informal and verbal and the consultations offered would not be deemed to be the opinion of or binding in any manner on the CCI.

The CCI has published some material in relation to the expanded consultation process on its website, however in essence it only provides the manner in which an appointment is to be set up and with the caveat that advice provided is not binding on the CCI.

The material mentions that the facility has been introduced in consistence with international best practices. However, compared to the amount of information available in relation to the consultation facility of jurisdictions with more mature and evolved antitrust regimes, the material on the process and the nature of responses that can be expected is not sufficient.

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Confidentiality

An example is in relation to confidentiality – a concern that any party to a combination typically has. Material available on the process for a number of jurisdictions sets out that all discussions will be confidential or that information provided will be kept confidential. No similar comfort is provided in the CCI material. That is not to say that the CCI will disclose such information since this information is not published. However, the CCI provides no assurance of confidentiality.

Material available on the European Commission pre-filing consultation process suggests that the discussions should involve both legal advisers and business representatives, as this typically results in more informed discussions on the business rationale for the transaction and the functioning of the markets in question.

The CCI material suggests that the process is expected to benefit parties by providing appropriate guidance on requirements of the combination provisions of the Competition Act and related regulations. A party to the combination will probably have advisers on the provisions of the law but will desire more information on how the CCI is likely to evaluate delineation of relevant market and corresponding share of such market.

Timing and level of support

Another critical issue for a party to a combination is timing of when such a party can approach the CCI. Again, material available for the more evolved jurisdictions deals with timing of when informal guidance can be sought. In certain instances it also includes the factors that the authority will consider in determining whether the transaction warrants informal guidance. The material on the European Commission’s facility mentions that the consultation must be at least two weeks prior to actual notification. The CCI material does not set out any parameters as to how the CCI officer will satisfy themself that a transaction is genuine or on the timing of such a consultation.

Material available on the pre-filing consultation process available for the UK indicates that the department will provide a tailored response to a party seeking informal advice in accordance with what, in its view, is proportionate and would most suit the parties in the circumstances. Accordingly parties have a broad idea of the level of support that will be provided. The CCI material is silent on this point.

Information to be disclosed

The extent of information to be provided in the consultation process and the form of such information is also discussed in the material available for other regimes. For instance, material for one regime advises that information relating to all potentially affected markets and possible competition concerns should be disclosed, even if parties ultimately consider that it ought not to be a concern and notwithstanding that they may take a particular view in relation to, for example, the issue of market definition. The CCI material does not offer any significant guidance on this. This could mean that parties to a combination may provide the information in any manner that they choose. However this could also mean that the officer overseeing the consultation isn’t satisfied with the manner in which the information is provided and could insist that it be provided in a form that is acceptable to the officer.

Welcome move

All in all, expanding the scope of pre-filing consultation is a right step by the CCI and a move that is probably welcomed by all deal makers in the Indian market. Pre-filing consultation can help to assuage concerns of parties to a combination by giving some sense of what to expect when the CCI reviews a notification of proposed merger.

However, it may be a good idea for the CCI to provide more information on the facility and give a better indication to parties to a combination on what to expect from the process.

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Amit Tambe is a partner at Trilegal and Kunal Chandra is a counsel. Trilegal is a full-service law firm with offices in Delhi, Mumbai, Bangalore and Hyderabad.