InGovern Research Services has raised concern over the leak of confidential information by investigating agencies.
In a letter written to Madhabi Puri Buch, Chairman, SEBI, InGovern said it is a matter of significant concern regarding the recent leak of confidential documents related to the ongoing antitrust investigations into Apple, Google, Amazon and Walmart’s Flipkart by the Competition Commission of India.
While Apple, Google, Amazon and Flipkart are not India-listed companies, consequences of such breaches of confidentiality could extend far beyond these entities, affecting the broader ecosystem of ancillary companies that depend on them, many of whom are publicly traded companies, it said.
In recent times, there seems to be an increased focus on technology companies in antitrust investigations, with similar leaks having occurred in high-profile cases involving global leaders such as Google and Apple.
CCI has recently found US e-commerce giant Amazon and Walmart’s Flipkart violated local competition laws by giving preference to select sellers on their shopping websites.
2020 probe
In 2020, CCI ordered an investigation into Amazon and Flipkart for allegedly promoting certain sellers with which they had business arrangements and giving priority to certain listings.
In a 1,027-page report on Amazon and a separate 1,696-page report on Flipkart released last month, the CCI investigators said the two companies were found to have created an ecosystem where preferred sellers appeared higher in search results, elbowing out other sellers.
Last month, CCI ordered an unusual recall of reports of an investigation that found Apple breached competition laws, after the US giant complained, its commercial secrets were disclosed to opponents, including Tinder-owner Match.
Leaks of sensitive information, especially during high-profile investigations, have the potential to significantly affect market sentiment and shareholder confidence, it said.
The credibility of companies such as Flipkart and Amazon, which play a central role in development of the e-commerce sector in the country, directly influences the performance and stock prices of a wide array of businesses, including logistics, retail suppliers, and technology service providers, said InGovern in the letter.
A decline in confidence in such major companies could have a cascading impact on these dependent companies, leading to market instability and loss of shareholder trust, it added.
SEBI should consider the broader implications of such leaks on shareholder sentiment across sectors, said the letter.
“We believe that more stringent measures need to be implemented to ensure the confidentiality of information related to regulatory investigations conducted with transparency and following due process of law, safeguarding both the credibility of the companies under review and the interests of the wider market,” it said.
