Balancing Due Diligence And Gun-Jumping: Managing Information Sharing In Combinations
- IJLLR Journal
- Oct 19
- 2 min read
Gowri Bipin, Symbiosis Law School Hyderabad
ABSTRACT
The unregulated flow of information during mergers and acquisitions has been at the heart of controversy in modern times, especially in India. Exchange of competitively sensitive information has been linked with exerting premature influence on the company being acquired, thereby giving effect to a combination before the Competition Commission of India’s formal approval, in violation of “standstill obligations” under section 6(2A) of the Competition Act, 2002. As combinations become more rampant in the face of a growing economy, it has become imperative to develop a proper framework for outlining boundaries between competitively sensitive information, the exchange of which would hamper fair merger practices, and information necessary to be exchanged in order to properly facilitate combinations. This paper attempts to decipher this boundary through a study and analysis of statutory regulations as well as the CCI’s decisional practices. It analyses the various applicable tests used to decide the scope of such information exchange. It goes on to conduct a comparative analysis of other jurisdictions across the world in order to understand global industry practices better. It goes on to discuss the impact of technology and artificial intelligence on these practices. It reasons that a certain degree of information exchange is necessary during combinations, but that without the proper demarcation of this degree, such exchange becomes a loophole for anti- competitive practices. Thereafter, it identifies the existing policy gaps in India and further suggests solutions or recommendations for a better framework. It concludes with a hope to imbue key aspects from foreign jurisdictions into our own regime, although so molded that these practices are adaptable to our unique economy.
Keywords: Competitively Sensitive Information, Exchange, Gun-Jumping, Anti-Competitive Practices, Due Diligence.
