The Hindu Editorial Analysis- 13th December 2022 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Big Tech and the Need in India for Ex-Ante Regulation

Context

The Indian anti­trust body, the Competition Commission of India (CCI)’s move, in October, to impose a penalty of ₹1,337.76 crore on Google for abusing its dominant position in the android mobile device ecosystem, has forced us, once again, to rethink the market power of Big Tech companies .

What is Competition Commission of India (CCI)?

• About:
  • Competition Commission of India (CCI) is a statutory body of the Government of India responsible for enforcing the Competition Act, 2002, it was duly constituted in March 2009.
  • The Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) was repealed and replaced by the Competition Act, 2002, on the recommendations of the Raghavan committee.
• Composition:
  • The Commission consists of one Chairperson and six Members who shall be appointed by the Central Government.
  • The commission is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases. The Chairperson and other Members shall be whole-time Members.
• Eligibility criteria of members of CCI:
  • The Chairperson and every other Member shall be a person of ability, integrity and standing and who, has been, or is qualified to be a judge of a High Court, or, has special knowledge of, and professional experience of not less than fifteen years in international trade, economics, business, commerce, law, finance, accountancy, management, industry, public affairs, administration or in any other matter which, in the opinion of the Central Government, may be useful to the Commission.

• The Competition Act was passed in 2002 and has been amended by the Competition (Amendment) Act, 2007. It follows the philosophy of modern competition laws.
  • The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations, which causes an appreciable adverse effect on competition within India.
  • In accordance with the provisions of the Amendment Act, the Competition Commission of India and the Competition Appellate Tribunal have been established.
  • The government replaced the Competition Appellate Tribunal (COMPAT) with the National Company Law Appellate Tribunal (NCLAT) in 2017.

• To eliminate practices having adverse effects on competition, protect the interests of consumers and ensure freedom of trade in the markets of India.
• To give opinion on competition issues on a reference received from a statutory authority
• To undertake competition advocacy, create public awareness and impart training on competition issues.
• Consumer Welfare: To make the markets work for the benefit and welfare of consumers.
• Ensure fair and healthy competition in economic activities in the country for faster and inclusive growth and development of the economy.
• Implement competition policies with an aim to effectuate the most efficient utilization of economic resources.
• Effectively carry out competition advocacy and spread the information on benefits of competition among all stakeholders to establish and nurture competition culture in the Indian economy.

• The Commission has adjudicated more than 1,200 antitrust cases i.e., case disposal rate is 89 % in antitrust cases.
• It has also reviewed more than 900 mergers and acquisitions till date, cleared most of them, within a record average time of 30 days.
• The Commission has also come up with several innovations like the ‘Green Channel’ provision for automated approval on combinations/transactions and cleared more than 50 of such transactions.

• Challenges Posed by Digitization: As we didn’t have a robust digital economy at the time of enactment of the Act (2002), CCI should understand the technological nuances of the new digital era.
• Need For New Market Definition: India’s Commission needs to update its definition of market now. Since there are no boundaries in the digital space, defining relevant markets has been a tough task for regulators around the globe.
• Threat From Cartelization: There is a possibility of threat from cartelization. Since there is a global shortage of commodities due to the pandemic, and now, following the war in Eastern Europe, the supply chain has been adversely affected.
  • There is a need to look into these and ensure that there are no monopolistic/duopolistic tendencies leading to price rises and supply side manipulations.

• With the advent of Web 3.0, AI, IoT, Blockchain and other technological developments, and emergence of issues like data protection and privacy, platform neutrality, deep discounting, killer acquisitions, etc, the need for a robust competition law, attuned to meet the needs of present-day techno-legal world, is important for India, which enables a true level playing field for the digital market players.
• CCI should understand the technological nuances of the new digital era and whether these markets are being fairly, effectively, and transparently used for the benefit of consumers.
• FAQs can become a permanent tool of advocacy which should be used to disseminate information on a ready-to-use basis.
• This would strengthen CCI’s position as a proactive and progressive regulator, and such guidance will help market players take preventive measures.