ICN guidelines on engaging parties in investigations

By Karan Chandhiok and Shruthi Rao, Chandhiok & Mahajan

The International Competition Network (ICN) recently concluded its 18th Annual Conference in Cartagena, Colombia. The ICN introduced the Recommended Practices for Investigative Process (RPIP), a set of procedural guidelines drafted by the members to enable a fair and effective investigation procedure. The themes of the guidelines are effective competition agency tools, transparency about agency policies and standards, transparency during an investigation, engagement during an investigation, internal agency safeguards, and confidentiality protections and legal privileges. Transparency, engagement and confidentiality are crucial inter-related principles that assist in establishing accountable, fair and effective competition enforcement. The RPIP balances the interests of the investigation agency and the parties to the investigation with these principles.

Karan Chandhiok
Chandhiok & Mahajan

The RPIP recognizes engagement between the investigation agency and the parties under investigation as a “basic attribute of sound and effective competition enforcement”. The importance of this practice is highlighted in the RPIP – “Investigations benefit from the open discussion of investigative theories with the parties and the explanation of competition concerns at key stages, allowing both sides to identify, consider, and test allegations and theories … Successful engagement depends in large part on the cooperation between the agency and the parties”. The RPIP recommends representation of views and arguments of parties through qualified legal counsel, employees and outside experts.

In India, for antitrust cases, investigations are carried out by the Office of Director General (DG). The procedure for an investigation, including the powers and duties of the DG, are set out in the Competition Act, 2002, and supplemented by the Competition Commission of India (General) Regulations, 2009. There are no guidelines for effective engagement between the investigation authority and the parties.

Shruthi Rao
Chandhiok & Mahajan

Collection of evidence, documents and statements by the DG is done through the issuance of a notice seeking information from the parties (and/or third parties), search and seizure, and depositions. Engagement with the DG is at their discretion and is mostly personality driven. The manner and extent of engagement with the parties differs substantially on a case-to-case basis.

Meaningful engagement with the parties ensures that fact-finding is comprehensive. Discussions on theories, facts, evidence, and arguments, especially with contributions made by legal counsel, experts, and third parties ensure that the investigation is efficient and thorough.

This is particularly advantageous in markets and businesses that are complex or intricate, such as high-technology or chemicals industries. While it helps the investigation agency in understanding the allegations and arguments in the correct context, it also assists the parties in placing all the relevant facts and arguments before the investigation agency.

Unfortunately, under the current enforcement architecture in India, engagement with the parties is met with reluctance. Engagement by the DG is currently limited to discussion regarding submissions by the parties. This is also reflected in the amendment to the general regulations in December 2018, which restricted the role of the advocates to engaging with the parties and the DG during a deposition. Several enforcement agencies, like the European Commission and the Federal Trade Commission, provide express guidelines for engagement, which includes opportunities for discussion of evidence, arguments, facts, and competitive concerns.

There are no guidelines or regulations in India regarding the engagement between the authorities and parties. The RPIP guidelines come at an opportune moment with the establishment of the Competition Law Review Committee to review the Competition Act to “look into international best practices in the competition field”. The RPIP, especially in relation to engagement of the investigation agency with the parties, should be integrated into the investigation procedure as this would not only increase transparency in the process but will also significantly contribute towards capacity building of the investigators.

With competition enforcement becoming more complex in recent years, the need for such procedural mechanism has become more important. Incorporation of such practices as part of the active investigation procedure will go a long way in serving both the investigation authority by making relevant information accessible and ensuring the co-operation of the parties, and the parties by ensuring a fair and transparent investigation process, which allows an effective right of defence.

Karan Chandhiok is a partner and Shruthi Rao is an associate at Chandhiok & Mahajan.


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