Significance of CSI in Indian merger control

Commercially sensitive information (CSI) has long been important in antitrust proceedings. Competitors’ exchange of or access to CSI, such as pricing strategies, production plans, customer data or future business objectives, increases transparency and reduces competitive uncertainty. This, in turn, enables firms to compete less vigorously and undermines independent decision-making. For this reason, the exchange of CSI between competitors is regarded by antitrust authorities, including the Competition Commission of India (CCI), as collusion.

But access to CSI began to gain prominence in Indian merger control with the CCI’s 2020 order in ChrysCapital/Intas. ChrysCapital was permitted to acquire a minority stake in Intas, if it relinquished its board seat and rights in a rival portfolio company. It also had to establish firewalls to prevent CSI exchange. ChrysCapital held less than 10% shareholding in each company. The CCI has ordered firewalls be maintained in other cases such as Google/Airtel, General Atlantic/Acko Tech, Northern TK/Fortis and Ruby/Singtel, to prevent investments, passive or otherwise, from leading to information sharing between actual or potential competitors, by directing information barriers not only at board level but also in operational and managerial areas.

The CCI has since heightened its vigilance of investors’ access to CSI, regardless of whether such access risked exchange with a competitor. In its recent decisions, the CCI has taken the view that access to CSI, directly or indirectly, disqualifies an entity from claiming the minority acquisition exemption. According to the CCI, the minority acquisition exemption applies only to routine or “ordinary course of business” investments without strategic intent. A board seat enabling the acquirer to take part in business decisions and gain access to CSI has been deemed strategic in cases such as TPG/SVF, Trian Holdco/Trian Fund and Sabic BV/Clariant.

In 2024, the CCI set out its concerns about CSI in its rules governing exemptions and green channel filings. Gaining access to CSI now independently disqualifies an investor from claiming any exemption from notification. The exclusion is no longer limited to control, ordinary course of business or material influence. Moreover, for an investor, access to CSI in any company that has horizontal, vertical or complementary overlap with a potential target company will equally disqualify them from filing through the green channel.

But what qualifies as CSI? With its growing significance and unclear contours, CSI led to some degree of uncertainty among companies and practitioners. In Goldman Sachs/Biocon, the CCI first provided examples of CSI. Goldman Sachs invested in optionally convertible debentures of Biocon that, if converted, would represent 3.81% of its total issued share capital at the time. Goldman Sachs also obtained access to CSI through information rights. The CCI decided that such access, in form and substance, was not available to ordinary shareholders and treated the transaction as strategic, rather than an ordinary course of investment.

Subsequently, the CCI defined CSI in its May 2025 updated FAQs. According to the CCI, any information essential to protect, maintain or enhance an undertaking’s competitive standing in the market qualifies as CSI. Examples are information about pricing, costs, profit margins, capacity usage, production, inventories, sales, market shares, territories, market entry or exit strategies, investment and risks. Other elements of a company’s strategic operations, such as annual business plans, budgets and board minutes, are also included.

Helpfully, the FAQs also set out what information is not considered CSI, providing much-needed certainty. They exclude publicly available information, audited or unaudited financial statements containing information usual in audited statements, information available to ordinary shareholders, historical data and ownership structure.

The CCI’s approach to CSI and its increasing role in antitrust control marks an evolution in India’s merger control framework. Access to CSI is no longer confined to concerns of a common shareholder passing information between competing portfolio entities. The regulator now considers access to CSI by investors, in and of itself, as “strategic” justifying the substantive review of a transaction, regardless of any other rights or the minority nature of the acquisition.

Hemangini Dadwal is a senior partner and Ashna Mahajan is an associate at AZB & Partners