CCI focusing on disruptive areas in the digital economy, draft competition bill one such initiative: CCI chief Ravneet Kaur

The Competition Commission of India (CCI) is focusing on emerging areas in the digital economy, which are redefining the marketplace dynamics to ensure that the interest of consumers is safeguarded, Ravneet Kaur, Chairperson of CCI said, adding that the draft digital competition bill is one of the measures to this end.

“Our goal is to ensure that competition law enforcement evolves in tandem with these innovations, safeguarding the interests of consumers and ensuring fair play,” said Kaur.

Addressing the 15th Annual Day of the CCI on May 20, Kaur said that one of the most important features of digital markets is the tendency towards market concentration. She also highlighted the role of algorithms and challenges from their opaque nature to competition.

Noting that algorithms play an important role in digital markets from shaping user experiences to making profit pricing and product placement decisions, she said that the opacity of algorithms can make it challenging to assess their impact on competition. 

“Issues like collusion with algorithms might implicitly coordinate prices, or market strategies, without explicit human direction, pose enormous challenges for us,” Kaur added.

The CCI chairperson underlined that addressing these challenges requires a nuanced approach, blending traditional competition analysis with a deep understanding of digital market dynamics. “It necessitates regulatory agility, the development of new analytical tools, and novel regulatory frameworks specially tailored for such scenarios,” Kaur said, adding that ensuring digital markets remain competitive and fair demands that the CCI confronts these challenges head-on with a commitment to adapt its policies, enforcement strategies, and legal frameworks to the realities of the digital age.

She also noted that many digital platforms benefit from network effects where the value of the service increases as more users join. “This can quickly lead to a winner-takes-all scenario where one or two companies will dominate the market,” Kaur said. 

She also highlighted that data is a very important resource in the digital economy, which companies can collect, analyse and leverage to gain significant competitive advantages. "This raises concern about data dominance, where control over large data sets can create insurmountable barriers to entry,” she said.

The CCI chief also shed light on the platform business models that are prevalent in digital markets, where a single entity controls access to a wide range of services. This raises issues of platform neutrality, especially when the platforms also compete with the businesses that rely on their infrastructure, she noted, adding that there is a growing concern that platforms potentially favour their services or products.

Kaur underlined that the digital economy has challenged traditional competition law frameworks worldwide. “Countries and economic blocs have responded by either adapting existing laws or introducing new regulations specifically targeting digital markets,” she said, adding that there has been a marked increase in scrutiny of major technology companies by competition authorities around the globe.

The deadline for submitting comments for the draft digital competition bill ended on May 15. The Ministry of Corporate Affairs is expected to take forward the proposed legislation that looks to bring ex-ante or pre-emptive measures to regulate anti-competitive behaviour by Big Tech firms.

The CCI is also in the process of launching a market study on artificial intelligence, which will be a knowledge-building exercise to develop an in-depth understanding of the emerging competitive landscape, Kaur said.

The CCI had recently called for applications from interested agencies in carrying out the market study.