The Competition Commission of India (CCI) takes cognisance of the anti-competitive practices of the digital companies too. While dealing with the business practices, the Commission takes broader consumer welfare as the guiding principle. Formerly, it was said that monopolies rule the prices. However, in digital space, the Commission has to go beyond the narrow price metric. The CCI’s order in 2018 against Google held that though Google users do not pay anything to avail of its services, but they provide personal data to the search engine. It is as good as paying an implicit price. Google gains from the use of personal data in its advertising business.
Digital companies operate as intermediaries between the market participants, say advertisers and the website visitors. This creates an eco-system where a few data-rich platforms cannot be avoided. They become dominant and this has been recognised by the CCI.
The rules that govern the relationship between the platform and their users are exploitative. The platforms have unequal bargaining power. The CCI questions this. In the Android operating system case, the OEMs have no option but to sign the agreement that prohibits them from distributing competing OS versions. It makes competition infeasible. It is also mandatory to install Google Search on all Android devices as default widget on home screen. This agreement is restrictive. It escalates Google’s data advantage.
Anti-competitive practices affect the market entry. WhatsApp privacy policy offers lower data protection. The CCI feels that this may lead to exploitation of consumers. It could be used to leverage the neighbouring markets such as display advertising. It creates entry barrier. This matter is being investigated.
The dominant players can extract huge rents. They can even oust the trading partners. Competion law is expected to improve economic outcomes to maximise gains from trade. It should encourage innovations by providing incentives.
Playstore is controlled by Google. It is a critical gateway between app developers and users. Playstore gives Google power to compel app developers to compulsorily use its payment systems.
Indian businesses use digital platforms for visibility and entry. Several verticals are filing cases. Unfair practices, huge bargaining power, asymmetric information, bottleneck facility, gatekeepers, dependence — all these have entered in competition law lexicon.
There could be a combination of behavioural rules and competition rules in competition legislation. Data protection law is being contemplated in India.