India's Digital Competition Landscape: A Glimpse from the ICN Conference
The digital world is evolving at lightning speed, and with it, the complexities of ensuring fair competition. At the recent 24th Annual ICN Conference in Edinburgh, the Chairperson of the Competition Commission of India (CCI) offered crucial insights into India's dynamic approach to regulating its burgeoning digital markets. Here’s a breakdown of the key developments she outlined:
The Digital Competition Bill: A New Framework on the Horizon
India is actively working on a Digital Competition Bill, a draft of which was released last year for public consultation. The government is currently reviewing stakeholder feedback on this significant piece of legislation.
The proposed bill aims to designate major tech companies as "systemically significant digital enterprises." This designation would be based on clear thresholds, including user numbers and financial metrics like turnover, gross merchandise value, and market capitalization. Once designated, these enterprises would be subject to ex-ante obligations, meaning they would need to proactively demonstrate compliance with specific rules. These obligations are designed to prevent anti-competitive practices such as:
Tying: Bundling services in a way that forces users to take unwanted products.
Self-preferencing: Favoring one's own products or services over those of competitors.
Data leveraging: Using data collected from one service to gain an unfair advantage in another.
Restricting third-party apps: Limiting the ability of other applications to operate within their ecosystem.
Ensuring fair and transparent dealings: Maintaining equitable and clear practices in their operations.
The draft bill covers nine core digital services, broadly aligning with the EU's Digital Markets Act (DMA), with virtual assistants being a notable exception. Further updates on the draft bill's progress are anticipated from the Indian government which is currently considering it.
Looking beyond global big tech..
While the CCI’s focus is often on global companies like Google and Meta, it is seeing a surge in cases involving other Indian tech platforms, reflecting the broad expansion of India's digital economy.
Meta's Data Sharing Practices Under Scrutiny
Last November, the CCI took a firm stance against Meta's updated policy that facilitated the sharing of user data across its various applications (WhatsApp, Instagram, Facebook) without providing an opt-out option. Users were effectively compelled to accept this data-sharing update to continue using WhatsApp. The CCI deemed this an anti-competitive practice due to the lack of explicit user consent for data sharing and issued cease and desist orders against Meta. This case presented a unique challenge in aligning competition law principles with India's Personal Digital Data Protection Act, particularly concerning the intricate issue of consent in data sharing and leveraging from a competition perspective.
Upholding Fair Play: CCI's Stance on Google's Billing System
The CCI had previously issued orders regarding Google's ecosystem and its mandatory billing system, which restricted the use of third-party payment processors. In a significant development, the appellate tribunal largely upheld the CCI's directions against these restrictions, validating the CCI's position on Google's anti-competitive practices in this area.
Expanding Scope: New Frontiers of Digital Competition
India's digital market is significant, with roughly 900 million internet users. This vast user base has fueled the growth of numerous Indian companies, leading to a broader range of digital market issues coming before the CCI. Cases now span across:
Online search engines
Food ordering platforms
Hotel booking services
Online advertising
Social media
E-commerce
Allegations are not limited to the "big tech" entities and increasingly involve self-preferencing, tying, leveraging, exclusive agreements, parity arrangements, and unfair terms imposed by various other digital players.
Emerging Concerns: The Rise of Quick Commerce
An intriguing new area of scrutiny for the CCI is the burgeoning "quick commerce" sector, offering rapid (e.g., 10-minute) delivery services. Concerns are being raised about the potential misuse of data access by these platforms. Allegations include predatory pricing and the strategic use of data and algorithms to gain an unfair advantage over traditional brick-and-mortar stores, particularly during peak shopping seasons like Diwali. The CCI is actively investigating whether these practices constitute anti-competitive behavior.
A Growing Focus for the CCI
It's clear that digital markets are an area of focus for the CCI. As Indian startups achieve "unicorn" status, their market conduct is also coming under closer examination. The CCI remains committed to actively addressing a diverse range of issues to ensure a level playing field and foster fair competition within India's vibrant and rapidly expanding digital space.
The video link for the speech is available here.