Ep 81: The New Antitrust Law Battlefield: Talent, Wages & Global Capability Centres

Hello everyone, you're welcome to our episode of In Conversation with IPR and Competition Law Podcast. I am Aditya Trivedi. And I am Ishya Kapoor, today's host of this podcast, Episode. If you're listening to us for the first time in Conversation with IPR and Competition Law, in Competition Law is a weekly podcast and available on various podcasts, platforms like Amazon Podcast, Spotify, Apple Podcasts and other podcasts, platforms available globally, widely listened in now more than 108 countries. We host intellectual property lawyers, antitrust lawyers, academicians, regulators and legal professionals where we deep dive into the intricacies of IPR and Competition Law. Today we have with us Ms. Apurna Mera, partner, Trial Aiken, and we will be discussing the topic, the new antitrust law battlefield, talent, wages and global capability centers, GCCs. Ms. Apurna Mera is a partner in Kailigun's new Delhi office and is highly reputed for her expertise in Competition Law, between the years of post-qualification experience of which 17 years have been exclusive to Indian Competition Law. She has played an important role in the finalization of the Indian merger control regime in 2011 and its red revamped in 2023. Over the years, Apurna has been involved in obtaining approvals for several high profile combinations involving remedies from the Competition Commission of India across various sectors, including pharmaceuticals, media and entertainment, technology, private meeting and retail. She advises on competition aspects across various industries and regularly undertakes competition compliance programs over various enterprises. Apurna has a strong reputation for being responsive, solution-oriented and having an innate understanding of how the regulator thinks. Apurna has assisted the Indian private equity and venture capital associations, regulatory, affairs committee in making representations in the CCI in relation to the proposed amendments to the combination regulations which could impact the private equity industry. Apurna has co-authored several competition law publications and has been involved in teaching at NIRMA University and OP Gender Global University as well. She is also a non-governmental advisor to this CCI, hello Ms. Apurna Mank and welcome to our podcast. Thank you for having me. Thank you so much ma'am. Competition law is a highly specialized and intellectually demanding field. Looking back, I want to ask you first this question before we go on to the topic, what first attracted you to this area of practice and how has your journey unfolded from those early interests to your current role as a partner at one of the India's foremost law firms? No thank you. Thank you Aditya for this question. So if I look back, I just want to share that I was a corporate lawyer way back when I started my career and then I actually switched practices and went into being a competition lawyer. Way back in I think 2009, I was a senior associate at AZB when this law came into being. And there was a lot of excitement, there were a lot of conferences happening, discussions were being held, it was the topic of the down the competition law is here, it's not going to be like the MRTP and that just really attracted me to see what's happening while doing a corporate law. Let me see how this law is dynamic and forward looking in that sense. And I think that's when I started attending a lot of events, conferences and I was like okay there is real excitement here. And interestingly enough, you know at that time only one day the Amodhi asked me because I was at AZB to accompany her to the Ministry of Corporate Affairs to meet the joint secretary and see okay how are we going to revamp and read those regulations into the corporate and many dynamics that were happening. So me along with few other lawyers sat down and we literally drafted the regulations and helped the government that time to streamline looking at how the law was in EU and US and at that moment actually for the next 10 days and nights we literally worked very closely with the government and the CCI to you know help draft and finalize the regulations. I think that then just made me look like that okay I will continue with corporate law but let me also parallely start working on you know competition law and that's how so many years back I got interested excited into this area of law and then it's all history and that's how it started. Well it's been absolutely super challenging but exciting work in the last 17 years and I'm actually very grateful to that. Thank you so much ma'am for explaining all these beautiful journey it's really great that how you started as a corporate lawyer and new work with Ziamod Ma'am and then you helped draft the very important implications and laws in the competition law field that's really inspiring ma'am and now you know going forward with the big picture of our podcast today so I will be you know the expert continuing with the question number one that I would be asking you this that is competition law has traditionally focused on protecting competition in product and service markets what explains the recent shift towards labor markets and why are regulators increasingly treating employees and talent as an important dimension of competition. So see when we talk about competition law traditionally we tend to focus you know on companies competing for customers in products or service markets but interestingly labor markets have become a hot topic but they also work in the same way you know employers are competing for talent and you know and when that competition get restricted it directly affects mobility wages and workers choice so all that happens in the market at the same time. Of late we are seeing there is lot of recent scrutiny around these kind of arrangements where employers are sometimes you know interacting to have wages fixed and that has raised some concerns so what effectively is that one is of course wage fixing you know this effectively happens when employers are coordinating or agreeing on salaries bonuses or benefits that they offer right essentially it could be argued that for fixing of that salary bonuses is nothing but fix it's like price fixing right an argument can be made and and can these coordination which are happening depressed wages or reduce options for these workers right so that's one area which is wage fixing. The second key area is that there is sharing of sensitive HR information. Now sometimes companies you know share detailed compensation data hiring practices knowingly or unknowingly either to an agency or to a competitor not realizing that these are absolutely sensitive HR information right while there is no explicit agreement to fix wages here but a mere exchange of such commercially sensitive information could you know facilitate coordinated conduct or collusion and and these are some kinds of trends which are being seen internationally which we believe are are drawing attention or focus to labour markets. Now interestingly you know 10 years back in 2016 there was a case where CC also looked at you know allegations of pilot recruitment practices of course that case ultimately got closed and see say effectively said this seems more of an employment issue than a competition issue but but maybe today if such issues would arise again 10 years into it and when we are seeing lot of international focus on this area maybe and maybe that's of you on the table maybe the regulator may see little differently right and I think the next part I'll say here is that we are also seeing news reports in India that right now CCI seems to be probing into this area well given this investigation is ongoing and these are all media speculations don't want to comment further but it indicates that CCI is closely you know examining liberated coordination today as we speak but only once you know we'll see more details. and on the letterhead we will know what is actually happening. Right man, thank you so much for explaining us the big picture and we do understand that in competition law there are so many phases if we have to underline Indian competition law there have been many phases let's say current focus on digital markets as well because 10 years back there were no focus there was nothing like digital economy at least on a broader level macro level. So when we talk about wage fixing and HR coordination my question is that many businesses understand price fixing among competitors to be illegal but may not appreciate that wage fixing raises similar concerns as well how does competition law view coordination on salaries, benefits or compensation structures among employers. No, a very very valid question and I think first here I will try and draw your attention to what's happening internationally. So interestingly you know in January 2025 the US, DOJ and the FTC released these revised antitrust guidelines for business activities which is affecting guide workers. In these guidelines you know they made it clear that wage and interestingly they make it make it clear on three points. First they say wage fixing which is including other types you know other terms of compensation such as bonuses, benefits and no poach can violate antitrust laws even without proof of actual harm right very interesting. Second they go on and say even coordinated wage ranges or benchmarking without agreeing on a specific number can be illegal. Third they go on to say which I had just previously mentioned sharing commercially sensitive information including wage information with competitors maybe violated. So looking at you know that last year US has released these guidelines and is hopping upon these three clear principles. It's interesting that this is clearly an area where antitrust authorities are focusing. Similarly last year you know in March of 25 the CMA had fined you know one of the largest sport broadcasters for colluding on the freelancers periods right. So effectively there is action happening overseas. Now to answer your question on whether salary benefits compensation structures is it a form of an anti-competitive agreement. Yes we could be looking at this because it's its wage fixing. Anti-competitive agreements are effectively in a wage fixing environment what are they doing. They are agreeing to fix salaries or agreeing to you know cap the pays which can reduce an employee's package. It can reduce their mobility and choice. It can limit a business ability to expand. So in effect what a wage fixing is doing it's operating like a cartel because employers are collectively controlling the so-called price of this labor. Right and hence I think in this view it would it would get covered. Thank you Maman. Thank you so much for explaining about wage fixing and HR coordination. So when we also talk about wage fixing and HR coordination we cannot also not talk about the information exchange risks because people nowadays are very careful about what kind of information get leaked as an employee. As an employee what my information would be getting leaked to someone else. In a similar way a particular gray area that is being involved in sharing compensation data and recruitment related information in the industry and at what point does HR benchmarking or information sharing cross the line from legitimate business factors into anti-competitive conduct. So see at a high level HR benchmarking may not be problematic right and when it's not problematic if it's based on market intelligence or information which is available in the public domain because without HR benchmarking they can't take informed decisions on hiring and retention. So therefore that is critical. Now when does it becomes from being okay to not being okay is when there is sharing of commercially sensitive information and then the question therefore lies is what is commercially sensitive information in an HR perspective. One could say any granular data which is giving reminerations of you know key managerial person passing it on to a competitor at employee level with the bonuses hiring strategy that becomes commercially sensitive right. Now if that information is being exchanged with competitors it definitely raises concern. Even if there is an indirect exchange when it is being shared with consultants or with industry bodies there is a concern right and these concerns get amplified when you are exchanging wages and bonuses just to an industry body saying okay I'm giving it for HR benchmarking and therefore I'm also receiving it it becomes a problem and hence the answer to this is that one needs to be careful as to what data is being shared and to who it is being shared with. Right Lam we understand the specifics of it and we'll go more into the specifics considering the elephant in the room which is the GCC's and India's growing talent economy. India is now home to over 1700 GCC's many of which compete for highly specialized talent what unique competition or risks do GCC's face when it comes to recruitment compensation practices and talent acquisition strategies. Yeah so now for GCC's while they have to hire I think for recruitment and compensation practices very critical on how they are engaging with third party agencies. What information they are sharing with third party agencies and what information they are receiving from third party agencies becomes absolutely critical in their decision making for hiring or deciding the compensation aspect and therefore that is one aspect they need to be careful and they need to have clear internal guidance on how they need to manage this. Okay also we also have to talk about now the global enforcement trends as well. So across the EU, UK, US, Canada and other jurisdictions regulators are increasingly taking action against no porch and wage fixing arrangements. So what lessons should Indian companies and GCC's draw from this international developments? So yes there is a lot of international development as I highlighted the January 2025 paper which we saw in US which clearly sets out three principles. Very clear. We also saw in Europe a very landmark case where actually the European Commission find delivery hero and glove to companies for reciprocal no hire flaws. Now this was the first time us stand alone no porch clothes at the EU level came into attention and attracted penalty. At the member state level also enforcement has happened. For example in in France you know we have seen several interestingly several engineering and consulting firms they got penalized. They got penalized for you know having no porch agreements that actually restricted direct coaching and regular IRA. Now these were gentlemen agreements which required firms to even consult each other before they recruited. Then looking again in Europe we we've seen you know the Portugal competition authorities right now actively investigating a no porch agreement in the beverage sector you know after I think our leniency application has been filed. So you know with these cases it's clear that Europe has also seen a trend that no porch clauses are increasingly being treated as price fixing and they need to be looked into and investigated. If we look at Brazil, Turkey, in fact Canada there is active enforcement happening there as well. So what is effectively our key takeaways from these global trends? The first point is that there is a growing number of regulators especially in Europe. Now what treating wage fixing, no porch as inherent, anti-competitive. So one needs to be careful of these clauses. Second practices that limit employ mobility or suppress pain. are increasingly being treated, you know on par and being questioned like a cartel behavior. So one needs to just be again mindful of that. So these are some aspects which we are seeing and they only with more jurisprudence will develop to be able to see where this will go. Yes, when we talk about gentleman's agreements and informal understandings, what are the most fascinating developments globally is that regulators no longer require a formal return agreement that has always been the case with competition law but also now talking about the HR markets and labor markets. Can even informal conversations, understandings are so called gentlemen's agreements create competition or exposure. Now what do you think on this? Yes, so if I have to simply put this it's a yes. You know across jurisdictions it is clear and an agreement need not be explicit, it may not be written down or be formal in order to be relative. Right. And as you rightly said gentlemen's agreement and in fact we've seen that in previous cases where gentlemen agreements or handshake agreements have been looked into and then there have been evidences, been collected basis emails and WhatsApp messages to see if there were indeed, there was an indeed a violation of antitrust laws. So yes such agreements are illegal even if they are not signed or they are you know not under a stamp paper and handshake would be sufficient to answer your point. So the next question what mainly be about recruitment agencies and also third party liabilities. So under that I would ask you that many organizations rely heavily on recruitment, consultants and talent acquisition firms. Can companies face competition law liability where recruitment agencies facilitate that change of sensitive hiring or compensation information between competitors? Now this is a very valid point because right now a lot of companies would actually involve third party recruitment facilitators or consultants and therefore it you know this becomes critical. So yes involving third party recruiters, consultant, talent acquisition firms also carry risk as they may use you know sensitive wage data from competitors for benchmarking and hence at times it's critical to understand from them where are they getting the data from you know is it market intelligence or they are actually using your competitors data showing sharing it with you on email and saying this is what the market you know intelligence is reflecting. So at times it's critical to to poke and question the recruitment agency because the recruitment agency could be also a reverse could be also could be used as a conduit to exchange sensitive information right between competitors and this may be treated as a form of an indirect coordination. Right secondly um here the online concern is whether the exchange is actually reducing competition in the market. If multiple companies are feeding current of forward looking compensation data into a consultant and that information is being shared in a granular manner across those firms to you know align on wages there is risk and hence I go back to that point it is critical to go back to these consulting agencies to understand where is that data coming from and it's being shared on your email right. I think global enforcement on this is clear in US there is guidance which explicitly flags that sharing wage or hiring information either when it's done to a third party it's done through software tools it's done through platforms can still be problematic. So I think the the point is very clear that the recruitment agencies need to be poked in question. Agreements with the recruitment agencies must be reviewed closely to review your exposure risk as a company and and you don't want to be in a situation where you know there is an indirect coordination happening through that agency. All right thank you a quick question if a company or GCC wanted to proactively manage labor market competition risks what practical compliance measures would you recommend implementing as of today. I would actually say two one a competition compliance in training sessions basically to sensitize companies that you know under recruitment departments with the risk and obligations under the competition law and to you know eliminate any and any anti competitive hiring practice. The second I would say goes back to the recruitment agency point we discussed that appropriate you know understanding compliance requirements with the recruitment agencies is very critical and then US has not shyed away by by highlighting that if you're sharing with a third party don't think you know you can't be questioned so it's best to have your compliance requirements with the recruitment agency very nicely aligned so that you know nobody isn't in trouble there. So those will be two points compliance in training one to appropriate alignment with the recruitment agency. Thank you opponent Matt now looking forward into the future looking ahead do you see labor market competition becoming one of the next major frontiers of competition and enforcement in India and if so what should businesses HR teams and illegal departments be preparing for now. Well I think I'll say this is going to be one of the yes significant frontiers because global trends are you know moving towards that. The question you know what companies and businesses should be asking you know when we talk about competition compliance is you know are our products priced independently that's what we typically have been doing right we go to a company and say as long as you have a justification for your pricing and you have a rationale you are independently deciding it it's good you're looking at the market good. I think the same logic or funder needs to now come in the labor market where you have to see whether they're hiring and their compensation decisions are genuinely independent and if even there is benchmarking being done and use of consultant is being done there is clear guidelines in terms of how it is being done and they need to understand how that you know that bonus or that which has been aligned with and and come as arrived with it and I mean to say thank you so much ma'am I think that there's one important key takeaway from today's podcast that labor markets cannot be overlooked especially from competition law point of view as well because obviously they were labor appliances and many appliances in these markets from various other legal point of view but now the competition law is also one of them global regulators including competition agencies are also eyeing towards regulating these markets thank you so much for doing this podcast today with us it was an interesting session I would like to thank all the listeners for tuning into today's episode and miss upper na mahera to you it was a pleasure to have you on a podcast and to discuss the new antitrust law battlefield talent wages and global capability centers thank you so much thank you both it was absolutely a pleasure to be here and thank you for this engaging discussion and even from my side ma'am upper na mahera thank you so much it was really interesting to know all the legal intricacies and frontiers thank you so much and for all the listeners for questions suggestions and recommendations please feel free to contact us on our Instagram or link in accounts thank you everyone for listening into today's episode of our podcast hope to have more talk shows this will be only learned together as specs and prospects of IPR and competition law see you soon in the next episode