As the CCI probes multiple cases of alleged unfair business practices in digital markets, its chief Ashok Kumar Gupta has emphasized the need for nuanced and calibrated time-bound interventions that not only address the issues but also ensure retaining the incentives for innovations.

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The Competition Commission of India (CCI), which keeps a tab on anti-competitive practices in the market place, is looking into various matters in the digital space, including search engines, online retail, smart devices operating system, app stores, food aggregators, social media and hotel aggregators.

"Given the fast-evolving and dynamic nature of digital markets, there is a need for time-bound interventions. Such interventions also need to be nuanced, calibrated, and proportionate to address competition concerns while retaining the incentives for innovation," Gupta said during a recent interview.

India is one of the biggest and fastest-growing digital consumer bases.

Noting that digital markets are characterised by unique features such as network effects, economies of scope, data-centric ecosystem and platforms operating as gatekeepers, the CCI chairperson said these markets appear to have intrinsic features that help entrench market power.

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According to Gupta, earlier, it was felt that the market power of incumbents in these markets was transient, only to be replaced or dislodged by disruptive entrants. "However, digital markets with online multi-sided platforms at their fulcrum seem to have defied this narrative."

"On one hand, this has opened up an enormous range of possibilities, but on the other, few technology platforms have assumed the role of gatekeepers. Thus, it is important that markets remain competitive and contestable," Gupta pointed out.

Against this backdrop, the government plans to amend the Competition Act and introduce various provisions, including a deal value threshold for mergers and acquisitions in digital markets.

In its report, the Competition Law Review Committee (CLRC) observed that certain mergers and acquisitions such as those forming part of digital markets do not meet the traditional asset thresholds but might well have an effect on competition. It also suggested introduction of necessary thresholds, including a deal value threshold.

The CLRC, which had submitted its report to the government in July 2019, also pitched for settlement mechanism to address anti-trust disputes. An amendment to the Competition Act is also on the cards.

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