Tech giants enjoy rule-setting powers in a digital economy, which give them pole position in markets and enable its extension into adjacent markets, according to Competition Commission of India (CCI) Chairperson Askhok Kumar Gupta. In an email interview given to Mint, Gupta speaks about how competition regulation has evolved over the years and why corporate practices in digital economy is getting regulatory attention. Gupta completes his four-year term as the CCI Chairperson on Tuesday. Edited excerpts:
Digital economy has been witnessing explosive growth in the recent past. What are the aspects and principles that these new age businesses should keep in mind in order to remain compliant with the spirit of Competition law?
Digital platforms, with enduring market power, have a decisive influence on the online competition landscape. Their control over critical digital infrastructure and power to set rules and determine terms of access, makes them de facto ‘gatekeepers’ of online markets. Such rule-setting power, control over user data and user interface, help maintain and strengthen the platforms’ long-term market position in the core platform markets, while also expanding the same into adjacent markets. The resultant irreparable/irreversible adverse consequences for competition and consumer welfare, warrant effective regulatory scrutiny over the large digital platforms. Thus, gatekeeper firms, due to their market power, need to discharge special obligations under the law to stay compliant. We have provided sufficient clarity to gatekeeper firms through our rulings and going forward, they need to align their practices accordingly.
CCI’s merger regulations have seen major changes over the years. Has it made compliance easier for businesses?
We are conscious that in an emerging economy like India where industry is gearing up to make the nation self-reliant as well as to enhance its global competitiveness, mergers and acquisitions would be a potent instrument. Alongside its unfailing commitment to objective and robust substantive assessment of mergers, CCI has adopted a slew of measures to ensure speedy clearance to non-problematic transactions, to reduce procedural burden, and to make filings simpler. Specifically, to ease compliance, CCI has amended the merger control regulations to dispense with the requirement of providing information on non-compete arrangements. This has provided the required flexibility to the parties to the combination in negotiating non-compete clauses and reduced the information requirements at the time of notifying the combination. A green channel route has also been recently introduced for automatic approval of combinations. This is a first of its kind trust-based system in the world, where notifiable transactions having no overlaps, be it horizontal, vertical or complementary between the parties, are deemed approved upon its filing. It is expected to promote a speedy, transparent and accountable merger review, striking a balance between facilitation and enforcement. The green channel route has gained traction with one out of every five transactions being filed under this route, demonstrating stakeholders’ confidence. All these steps made the approval process business friendly and reduced compliance costs. These are some of the measures which we have taken in the recent past. I must add that CCI continuously reviews its procedures and processes in order to facilitate ease of doing business, apart from lessening compliance burden.
How can CCI create awareness about the anti-competitive practices of digital economy firms and empower affected businesses and consumers to seek justice?
Our enforcement actions also serve a salutary purpose of sensitizing firms that are engaging in the conduct that has been found by CCI to be anti-competitive. We also have an advocacy mandate, which we are discharging very actively.
Is CCI prepared to take up the responsibility to administer a new digital markets law that the Parliamentary Standing Committee on Commerce has recommended?
Well, it is premature to say anything at this stage.