When the chairperson of the Competition Commission of India (CCI) cautioned against the creation of large digital platforms and the collection of data in the hands of a few entities, one wondered by how much this was a policy concern. Concerns were raised over the motivation behind this policy decision by government politics dictated many. Seeing as reformation of competition laws in the digital age has not been initiated since the enactment of the Indian Competition Act in 2002, the law should center on preempting destructive capabilities of the internet age and design remedies that address it.
The Indian economy is experiencing a wave of the industrial revolution in the business environment due to the powerful and innovative application of hi-tech computers to improve computer information technology. This digital transformation connects millions of people through the internet; thereby, bringing about a massive change in daily activities. Everyone – businesses and individuals – now rely on some sort of computer technology to get by each day. Invariably, this has ushered in a new age: the digital era.
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As the digital age experiences steady increases in India, laws have been promulgated to regulate the practices of information age companies. These laws were designed mainly to protect the indigenous hi-tech companies from getting overrun by large corporations. Practices from these large corporations such as massive price discounting and the use of vast data insights while distributing products on their platform have contributed to a disintegration of platform neutrality and fair competition.
Much of these practices by large corporations exist due to the archaic nature of the antitrust law existing in India. The Indian Competition Act has been in operation since 2002 and no review of the law has taken place since that time. And, since the competition law was structured in line with antitrust laws in the United States, the foundation of the act was rooted in arguments of economic efficiency, which doesn’t factor in the evolution of data as an economic asset.
As such, the nature of data-driven innovation and digitization, startups are unable to compete with dominant technology platforms because the large platforms already control vast amounts of data. Eventually, the large firms acquire the startups. This is an area the Indian competition law has been unable to capture. This is why, in an attempt to ensure a level playing field, the Department for Promotion of Industry and Internal Trade published a draft national e-commerce policy in February of 2019 advocating drastic measures that curb the activities of big tech companies.
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However, any reformation of the CCI laws must focus on altering the digital strategy of tech companies so that data collection is not concentrated in the hands of one entity. This can be done by placing a cap on the variety of data in the hands of the acquirer and comparing that with the variety of data in the possession of the acquired. Doing this indicates a recognition of the harm posed by large firms, and a willingness to create policies based on need; not politics.
References:
- Competition Act in India, 2002 by Competition Commission of India
- Critical Analysis of the Competition Act in India by Mohammad Asad Mahmood; June 2018
- Reviewing the Competition Act by GeetaGouri; October 2018
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