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Digital Competition Act — It’s All About A Fresh Change In Competition Law To Regulate Digital Markets

 |  January 16, 2023

By: K.D. Singh (CNBC)

In a globally competitive economy, technological innovation and the narratives they construct are critical to how enterprises cater to their customers or consumers while at the same time complying with regulatory requirements. This presupposes a delicate balance between adopting healthy market practices and taking care of critical stakeholders such as consumers and regulators. Since competition law prohibits anti-competitive practices which negatively impact both incumbent competitors and consumers, the Competition Act, 2002 is often referred to as the ‘de facto consumer protection law’.

This philosophy is now deeply rooted into the digital ecosystem, where with the advent of newer forms of business models, interface of such companies with consumers is on the rise, which inevitably has consequences from a competition law standpoint.As a case in point, consumers engage with such service providers on a frequent basis ranging from ordering food from online delivery applications through Zomato or Swiggy, executing financial transactions through PayTM, PhonePe or Google Pay, utilising digital cab aggregators like Uber and Ola and engaging in Business to Consumer (B2C) transactions through electronic commerce platforms such as Amazon and Flipkart, among others.

While on the one hand, the aforesaid innovative business models are a testament to ‘dynamic competition’ tracing its roots to the renowned economist, Joseph A. Schumpeter, on the other hand, there is an emerging trend of digital platforms preferring their own services (self-preferencing), engaging in deep discounting practices, among others and becoming repositories of consumer and business data thereby providing them an opportunity to exploit the data in an anti-competitive manner…