Competition law and guidelines for data in a digital environment in Covid-19 times

By Soundarya Vats

Introduction

Competition is a market condition in which sellers compete for the patronage of buyers in order to fulfil their commercial goals. The entrepreneurial forces in the economy are unleashed when competition and liberalization are combined. Competition provides customers with a wide range of options at acceptable costs, encourages innovation and productivity, and results in the most efficient use of resources.


Some businesses may undermine the market in an open market economy by engaging in anti-competitive actions for short-term benefit. These activities have the potential to entirely negate the advantages of competition. As a result, although nations throughout the world are progressively embracing the market economy, they are simultaneously reinforcing national economies by enacting competition legislation and establishing competition regulatory authorities. This is market abuse and it leads to the need for new legislation.


Importance of Competition Law in India

Following the liberalisation and privatisation that swept India in the early 1990s, it became clear that the existing Monopolistic and Restrictive Trade Practices Act, 1969 ("MRTP Act") was unable to deal with the competitive element of the Indian economy. With the commencement of the globalisation process, Indian businesses began to face fierce rivalry from both domestic and foreign companies, necessitating a fair playing field and an investor-friendly environment. As a result, there was a need to refocus competition rules from preventing monopolies to encouraging firms to spend and develop, therefore boosting competition, while avoiding any commercial power abuse.


The Monopolies and Restrictive Trade Practices (MRTP) Act was enacted in 1969, marking the beginning of India's competition legislation. Then came the changes brought about by liberalisation in the 1990s that demanded new law a few decades later, and India adopted the new Competition Act in 2002. The Competition Commission of India (CCI) was created on October 14, 2003, although it did not become operational until May 20, 2009.


The CCI in 2019 launched an inquiry into Google for exploiting its dominant position in the licensable Operating System (OS) market by compelling smartphone manufacturers/OEMs to preinstall Google Mobile Suit (GMS) solely and bundle the different Google services. In November 2020, the CCI ordered an inquiry into Google for abusing its dominant position in the Play Store and Android Operating System (OS) by favouring Google Pay over rival apps in another complaint.


Global Market

The traditional market rivalry has been altered, and numerous new markets have emerged as a result of digitalization. Today's top brands are dominated by technology, telecommunications, and internet-based businesses. The Digital India Campaign, launched by the Indian government, has enhanced online infrastructure, increased internet connection, and advanced science and technology. E-commerce (Amazon), social media (Facebook), online payment applications (Google Pay, Phone Pay), search engines (Google), and other services are provided through the platforms.


The COVID-19 Aspect

A range of recent technical advances, such as the advent of the Internet of Things, artificial intelligence, and data marketplaces, are progressively gaining pace in the digital economy. Digital platforms are critical components of today's economy, particularly after the emergence of the 2019 coronavirus disease pandemic (COVID-19), and are a major concern for governments and competition authorities throughout the world.


As a result of the microelectronic revolution (computers, Internet, robotics, and artificial intelligence), the rise of disruptive technologies and inventions has led to a consensus on what is known as the digital economic period. Big data, digital platforms, algorithms, "Big Tech" firms, the payment revolution, e-commerce, and so on are all examples of this. Technological advancements have pushed the boundaries in recent years, changing communication, corporate strategy, and, most importantly, the way businesses compete. Furthermore, the current crisis resulting from the coronavirus disease (COVID-19) pandemic is a clear turning point that emphasises the need for market restructuring.

Incorporating the perspective of smaller businesses in discussions about competition protection and ensuring their survival, insertion, and progress in the value chain are among the proposals for tackling the difficulties of the digital economy. In the digital economy, these businesses are much more significant than in the old economy. Because technology frequently exonerates those engaged, the difficulties created by the digital economy necessitate more cooperation between the two realms of competition protection—law and business.


Indian Perspective to COVID 19 in Digital Space

The government's mobility limitations, established in reaction to COVID-19, have only encouraged the expansion of India's digital market. In this environment, India requires a legislative and regulatory framework that can shape and support the growth of its digital economy by ensuring that markets are open and fair, and so benefit consumers. Not only can prices remain low in such an atmosphere, but market actors are also able to compete on innovation. Indeed, data markets are prone to concentration and 'tipping' due to their digital and economic characteristics. Furthermore, customer trust is critical to any market's long-term viability.


The mere existence of competition legislation is insufficient to ensure that digital marketplaces remain competitive. Because of the technological and economic characteristics of these marketplaces, by the time a player is investigated under competition law, the market has already suffered potentially irreversible harm. Network effects, economies of scope, high entry hurdles, the lock-in effect, and, in many cases, users' status quo bias all make it difficult to safeguard competition. Furthermore, typical remedies are ineffective in rectifying market failure in digital markets, necessitating some sort of ex-ante intervention.


Conclusion

The changes brought about by the new digital economy provide a difficult problem for competition authorities across the world, who must update and adapt the legislative and institutional frameworks that defend competition in the various digital economy marketplaces. The legislative and institutional framework for competition must be consistent with the country's growth model, particularly in emerging countries. Competition policy must be interwoven with industrial policy as well as intellectual property policy, which should ensure that smaller businesses have access to technology (MSMEs).


Author: Soundarya Vats

Course: 3rd year(BA LLB).

Collage: Amity Law School, Noida


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