CCI may consider market study on digital economy

With a view to better understand the workings of the digital economy, the Competition Commission of India is likely to undertake a market study on digital players.

According to sources, the competition regulator is planning to undertake a fresh study on the digital ecosystem and players in order to assess its functioning from a competition point of view.

It had previously also undertaken a market study on Artificial Intelligence in order to understand the emerging competition dynamics in the development ecosystems of AI systems and implications of AI applications for competition, efficiency and innovation in key user industries.

The study conducted through the Management Development Institute had revealed in its report released last year that while advent of AI offers substantial benefits in efficiency, innovation, and consumer experience, there are emerging issues that may directly or indirectly have a bearing on competition and may hinder realization of its full potential. 

Sources indicated that the new study would be in continuation of this in order to gauge how businesses are operating in the digital ecosystem. The CCI has been engaged with several tech giants and players and has also investigated practices and penalised several of them for antitrust and anti-competitive behaviour.

In the past, the government along with the CCI was also working on a Digital Competition Bill to regulate players in the digital economy. The Bill had also proposed ex ante regulations and specifically regulating “Systemically Significant Digital Enterprises” (SSDEs) that provide core digital services in India and have a significant presence and significant financial strength in the country.

At the time, it had raised concerns by several tech majors including Amazon, Meta, Apple, Google and homegrown players like Swiggy and Flipkart had also said they were not in favour of ex ante regulations. The Bill is however, on the backburner with little activity on it in recent months.