New Delhi: The Competition Commission of India (CCI) wants to impose a gag on industry lobby groups circulating information that could be used to, in its view, assist in cartelization and stock-market manipulation, according to three people familiar with the development.

The groupings have been asked to draw up data-release rules for themselves along the lines of what prevails in Europe, said one of the persons cited above, without elaborating. Some auto companies based in Europe recently changed their information-dissemination pattern in India to stay compliant with antitrust rules on the continent.

The message was conveyed to the Indian associations in a meeting on Monday by CCI chairman Ashok Chawla.

“This was the advisory to them, which they would be well advised to follow," Chawla said on Tuesday.

Those who attended the meeting included representatives of the Confederation of Indian Industry (CII), the Associated Chambers of Commerce and Industry of India (Assocham), the Federation of Indian Chambers of Commerce and Industry (Ficci), the Society of Indian Automobile Manufacturers (Siam), the Automotive Component Manufacturers Association of India (Acma) and the Confederation of Real Estate Developers’ Associations of India (Credai) among others.

The associations have been warned of severe penalties if evidence of wrongdoing is found against them.

The move follows CCI imposing a penalty of at least 6,300 crore on the top 11 cement makers in the country for “collusive price fixing" in 2009-10 and 2010-11. It also fined lobby group Cement Manufacturers’ Association a token amount.

“In the cement cartel case, we found that the cement association was allowing its platform to share information in terms of production, pricing, etc.," said a top CCI official who didn’t want to be named. “What we have told them (the associations) is to discharge their function to portray a larger picture, but not create a forum for companies to act in a manner which is anti-competitive."

That penalty was the highest CCI has imposed since it started functioning in 2009, when it was formed after its predecessor, the Monopolies and Restrictive Trade Practices Commission, was dissolved.

The gag covers market share, segment-wise data or model-wise data for cars and motorcycles, according to a second person familiar with the development.

The guidelines will presumably clarify what exactly will be covered by the information ban and how it will function. For example, Siam publicly releases detailed automobile production data in the second week of the month for the preceding month. But most of this information is already released in the public domain by the respective companies to the stock exchanges, in line with listing rules, on the first of the month.

What BMW India Pvt. Ltd, Mercedes-Benz India Pvt. Ltd and Audi India recently did to comply with European competition rules may offer a guide. The three stopped sharing data related to monthly and model-wise sales with the press or Siam. However, they report cumulative sales data at the end of every quarter.

“Comprehensive guidelines exist in developed economies on how the trade associations should conduct themselves to escape consequences of antitrust violations," said M.M. Sharma, head (competition law practice) at Vaish Associates, a corporate law firm. “For instance, in the European Union, any action on the part of a trade association that reflects an intention to coordinate its members’ or participants’ conduct and prevents, restricts or distorts competition, is prohibited."

The exercise will involve drawing a line between big-picture information and that which may be open to misuse.

“CCI said that data collection is required for analysis and monitoring growth of the industry," said one of the persons cited above. “If the purpose is to exploit the customers and control (stock) market movement, then it is anti-competitive practice."

There won’t be any restrictions when it comes to sharing information in the public domain, said a senior CCI official who was present at the
meeting with the industry bodies. “We cannot stop public sharing of information," he said.

Sharma said what wasn’t allowed overseas includes the “exchange of information on individual members’ data on current or recent prices, including discounts, etc., installed capacities, capacity utilizations, production volumes, sales, identities of individual customers or sales territories, inventory levels, order backlog or even estimates of employment evolution, information about contract tenders, customer credit risk, including exchange of customer lists, etc."

The associations have been asked to come up with a set of guidelines.

“They have asked us to do self-regulation. In the absence of any precedent in the competition sphere, we have been advised to follow the European Union model and come up with dos and don’ts for ourselves," said one of the persons cited above.

Associations violating the guidelines will be punished, he said. “Any circumstantial it email or paper trail would lead to CCI’s strict action," the person added.

Competition authorities of the UK, Canada and New Zealand have drawn up detailed guidelines for trade associations, Sharma said. “CCI may like to study these guidelines and incorporate them suitably in its competition compliance programme," he added.

While the Siam and Acma spokespersons declined to comment, Rajiv Kumar, secretary general of Ficci, Chandrajit Banerjee, secretary general of CII, and D.S. Rawat, secretary general of Assocham, did not respond to phone calls. Text messages sent on their mobile phones did not elicit any response at the time of going to press.

Credai national president Lalit Kumar Jain said CCI appreciated its transparency and code of conduct, and that it had been asked to enhance advocacy of relevant industry issues.

“If CCI has certain guidelines, and dos and don’ts, we are happy to follow them," said Jain.

Madhurima Nandy in Bangalore contributed to this story.