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Quick Take: Does India need a separate competition law for digital markets?

We have dominant players like WhatsApp and Amazon in the internet market, but do you need a law to regulate dominance?

Do we need a separate competition law to deal with digital markets, which is the internet? In the internet, you’ve got e-commerce, messaging, online cab hailing, video conferencing apps, app stores, etc. Each of them has a particular dominant player. In e-commerce in India, there’s Flipkart and  Amazon. In taxi hailing, there’s Ola and Uber. In case of messaging, WhatsApp is largely dominant. In case of app store, there’s the Google Play Store. So we have dominant players in the internet market, but do you need a law to regulate dominance?

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These companies have earned their dominance in a sense. So what’s the problem with that? One way of thinking about it is market crowding, which is that because these apps exist, they’re so dominant and so many people are using them, other players can’t make an entry into the market. So, consumer choice is restricted. How many people use messaging apps apart from WhatsApp? There are dominant apps, and usually people prefer one or the other, but there’s some amount of competition.

What do you do when there’s one player that is perhaps abusing the market like the Competition Commission of India (CCI) has ruled in case of the Google Play Store. It is dominating and trying to extract rent from the market, so consumers have either less choice or no choice. This is new to competition law—market crowding and digital dominance at this scale. And this new committee that’s been formed by the Indian government is probably going to look into these aspects and how to reduce this dominance in the digital markets.

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Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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