Unravelling Anti-Competitive Behaviour

Anti-competitive behaviour refers to any action undertaken by one or more businesses to prevent competitors from entering or thriving in their market. It's not just about restricting competition, but also about manipulating the market dynamics in a way that affects prices, degrades services, and stifles innovation.

Insights from the Standing Committee Report

• The Standing Committee on Finance presented its report on ‘Anti-Competitive Practices by Big Tech Companies’, highlighting the major concerns in this arena.
• The report provides a comprehensive analysis of the anti-competitive actions of Big Tech firms and offers the Committee’s perspectives and recommendations on the matter.

Key Takeaways from the Report

• Anti-steering: The report calls attention to anti-steering clauses that prevent business users of a platform from directing their clients to alternatives. It advises Systemically Important Digital Intermediaries (SIDIs) to avoid mandating the purchase of additional goods or services for platform usage.
• Bundling and tying: The Committee suggests that SIDIs should not compel businesses or end users to subscribe to additional services for using their core platform service.
• Third-party applications: The Committee emphasizes that SIDIs should facilitate the installation and usage of third-party software applications.
• Strengthening CCI: The Committee believes that the Competition Commission of India (CCI) needs to be bolstered to effectively address anti-competitive behaviour in digital markets. It proposes the establishment of a specialized digital markets unit within the CCI.
• Data Usage: The Committee recommends that SIDIs should refrain from processing the personal data of end users who use third-party services via their platforms.
• Regulating digital markets: The Committee argues that competitive behaviour should be assessed before markets become monopolized, a shift from the current ex-post evaluation.
• Self-preferencing: Self-preferencing, a practice where a platform promotes its own services over others, is highlighted in the report. The Committee advises SIDIs not to practice self-preferencing when facilitating access.
• Digital Gatekeepers: The Committee recommends identifying the dominant players in digital markets and classifying them as Systemically Important Digital Intermediaries (SIDIs) based on criteria like revenue, market capitalization, and user base.

Proposition of a Digital Competition Act

• The Standing Committee on Finance stresses the need to enhance India's competition law to cater to the unique requirements of the digital market.
• The Committee advises the government to enact a Digital Competition Act to foster a fair, open, and competitive digital ecosystem .
• The Committee also suggests expanding the purview of the CCI to effectively combat anti-competitive behaviour in digital markets.
• It proposes the formation of a specialized digital markets division within the CCI.
• The envisioned institution would:
  • Oversee both established and emerging SIDIs;
  • Advise the central government on SIDI designation;
  • Monitor compliance; and
  • Resolve disputes involving digital marketplaces.

In Conclusion

India has taken significant strides in proposing and implementing laws to regulate data collection and dismantle the monopolies of Big Tech firms. It remains to be seen how these tech giants respond to these allegations of anti-competitive behaviours and what measures they adopt. While the formal adoption of the Committee’s recommendations may take time, the progress so far is promising.