Competition Law

[By Mayank Gandhi & Devansh Lunawat] The authors are students of National Law University, Nagpur.   Introduction – India’s digital surge has invited the attention of several big economies across the globe. India’s digital economy is likely to surge to USD $1 trillion by 2030. The growth of the digital market can be attributed to multi-sided digital platforms with strong ecosystem and the large appetite of Indian consumers for digital products and services. The growth of digital market is creating new avenues for tech-giants to expand their digital businesses. To further maximize their revenues, these tech-giants are indulging in complex anti-competitive strategies that the traditional theories of harm under competition law are unable detect. Hence, keeping in mind the increasing anti-competitive practices adopted by big-techs, several countries are proposing specific regulations which seeks to regulate anti-competitive behaviour of big-techs in digital market. In this context, this paper critically analyses prerequisite made by Meta of having an Instagram account in order to use their microblogging app, ‘Threads” from the lens of competition law dealing with such conduct. The author also undertakes the task to navigate the approach adopted by several jurisdictions regarding bundling/tying of services or products. Lastly, it advocates the possible way ahead for antitrust authorities to ensure fair competition in the market. Navigating the treatment of tying practices at international level – European Union – Tying is one of the listed behaviours in Article 102 of the Treaty on the Functioning of the European Union (“TFEU”). In Europe, tying is traditionally examined with a de facto per se approach. This approach was exemplified in the Hilti nail gun case, where Hilti required its patent-protected cartridges be supplied with Hilti nails. The IBM case was one of the first instances of tying dealt with by the  European Commission. One of the arrangements included a refusal by IBM to supply its specific software to users unless the software was used by a CPU manufactured by IBM. In another case, Microsoft used to provide Windows Media Player (WMP) enclosed in the Windows operating system. Such practice increased the barriers for new entrants of such media players. Microsoft was found in violation of Article 82 TEC (Article 102 TFEU). The Commission reasoned that such tying would weaken market competition.  In recent times, the General Court confirmed the abuse of dominant position by Google, for tying its operating system (OS) with the Google Play Store. Recently, the Commission announced the opening of formal investigation against Microsoft to assess its practice of tying or bundling Microsoft Teams with Microsoft 365 and Office 365. Before an arrangement can be termed as tying, certain conditions must be fulfilled. Primary among them being the existence of two separate products. As per The Guidelines on Vertical Restraint: “Two products are distinct if, in the absence of tying, from the buyers’ perspective, the products are purchased by them on two different markets.” However, it is not necessary that the products originate from different markets. This position was also highlighted in the DG Competition Discussion Paper. Complementary products can also constitute distinct products. The second requirement is to prove that the company is dominant. Dominance in this context shall mean that the company’s action are not influenced by that of its competitors. Secondly, it shall be proved that the company is dominant, i.e., the extent to which a company can behave independently of its competitors or customers. Foreclosure, which can be traced back to Hoffmann – La Roche case is another requisite, that refers to the harm in either the tied or tying market or in both the markets. The only defence available to the parties is to justify that their act is likely to generate efficiencies for consumers that outweigh the negative effects. In this way,  tying is per se restricted in European Union and the burden is on the parties indulging in such activities to prove that the benefits of such agreements will outweigh their adverse effect on competition. United States – Tying in the United States is usually challenged under either Section 1 of the Sherman Act or Section 3 of the Clayton Act. The test applied to ascertain legality of tying under both statutes is functionally the same. In the International Salt Co. case, the company owned patents on two machines that were used for utilizing salt products. The lease agreement required buyers of the patented machinery to purchase all of their salts from the company. The International’s tying clause was challenged by the Department of Justice. In this vein, the US Supreme Court held the tying clause illegal as it prevented other firms from directly supplying salt for use in patented machines. In 1947, the US Supreme Court found the tying clause illegal as it prevented other firms from directly supplying salt for use in the patented machines. In subsequent years, the scepticism of US courts concerning tying behaviour grew. The skepticism was based on the notion that “tying arrangements generally serve no legitimate business purpose that cannot be achieved in some less restrictive way”, therefore negating the requirement of ascertaining even a dominant position.  However, this position was changed in 1969 following the judgement in Fortner I and later in Illinois Tool Works delving into the concept of market power. In cases relating to tying in software platforms, the landmark case was decided by D.C. Circuit against Microsoft for tying Internet Explorer (IE) along with the Microsoft Windows (OS).   One of the factors that was taken into account by the court was that IE and OS are separate products. More recently Epic challenged Apple’s practice of tying the use of its iOS devices to Apple’s App Store and subsequently with Apple’s IAP system. The judgement was largely in favor of Apple principally on the ground that Epic failed to propose a substantially viable less restrictive alternative to Apple’s restrictions as well as a failure to propose market definition. American jurisprudence has developed two methods for ascertaining anti-trust violations. Firstly, the per se illegality rule,

[By Tejaswini Kaushal] The author is a student at Dr. Ram Manohar Lohiya National Law University, Lucknow.   Introduction Scott Stratten, the author and founder of UnMarketing, whistle-blowed Bell Canada’s ‘MyBell Mobile’ App’s dirty little secret back in 2014, initiating one of the most intense discussions on the ethical and antitrust aspects of posting fake reviews, also called ‘Astroturfing.’ Flaunting a suspicious five-star review on the Apple AppStore, these reviews appeared to be written by Bell employees themselves. The reviews praised the App as “awesome” and “excellent,” which sharply contrasted with the one and two-star reviews from other users who labeled the App as “shameful.” While the company thoroughly maintained that this incident was an innocent repercussion of their employees’ overenthusiastic effort to promote the App, it does not undo the harm it must have caused to the principles of market competition. Astroturfing is, unfortunately, more common than consumers might realize. Studies in 2023 estimate that up to 45 percent of all online reviews are falsified. Some companies even offer to create positive fake brand reviews in exchange for a fee. Both consumers and competitors are adversely affected by this deceptive practice since online research and social media now heavily influence purchasing decisions, with people more likely to buy a product if they perceive other consumers’ experiences to be genuinely positive. In a 2023 survey, 93% of users have reported being impacted by online reviews for their buying decisions. With the increasing digitization and the new-age boom of Artificial Intelligence, the prevalence of astroturfing is going nowhere soon, which compels a thorough analysis of its nature and implication on the Indian market. This article analyzes the development and expansion of astroturfing, the universal proliferation of this phenomenon, and the subsequent response by various legislative frameworks, with a particular focus on Canada. Lastly, it will examine the antitrust outlook in light of existing Indian legal jurisprudence and executive actions on astroturfing to address legislative gaps. Astroturfing Defined: a Digital Web of Deception Merriam-Webster defines astroturfing in its original sense: “organized activity that is intended to create a false impression of a widespread, spontaneously arising, grassroots movement in support of or in opposition to something (such as a political policy) but that is in reality initiated and controlled by a concealed group or organization (such as a corporation).” Coined by a United States (US) Senator in 1985, astroturfing involves projecting a fabricated image of naturalness to sway public opinion and achieve virality. Originally practiced in the physical world, astroturfing has now found new life online with the help of digital media and new technologies. The cyber equivalent of astroturfing is popularly enjoying the portmanteau ‘cyberturfing.’ It often employs tactics like fake testimonials, paid social media accounts, and the creation of multiple fake personas to appear genuine. It involves various methods, such as company-employed bloggers posting biased product reviews disguised as unbiased ‘customer opinions,’ creating multiple fake personas (“sockpuppets”) on platforms like Reddit to spread a populist idea for a product, using paid social media accounts to promote specific product brands and engaging in pay-for-play deals with independent bloggers for positive coverage in exchange for incentives. Astroturfing’s emergence has brought concepts like 50 Cent parties, online water armies, and crowdturfing to the forefront. The rise of social media, especially Twitter, has facilitated the proliferation of astroturfing, allowing fake profiles and bots to wield significant influence on forums, social networks, and customer platforms to favor a certain brand or propel a certain product. Its use to alter customer reviews adversely impacts the domestic and international commercial markets. The Expanding Reach of Astroturfing: A Threat to Trust and Competition Astroturfing has become a powerful and efficient strategy for many organizations, thanks to the broader arena provided by the internet. However, this practice significantly impacts consumers’ behavior and organizations’ reputations, undermining authentic opinions and promoting unfair trade practices. On the one hand, organizations risk tarnishing their image and authenticity if caught astroturfing, as seen with instances involving Microsoft and Wal-Mart in the US. Microsoft once planned an astroturfing campaign and enlisted the services of a prominent Public Relations firm to execute it. However, the campaign faced a major setback when confidential documents related to the scheme were leaked to a leading Los Angeles newspaper before it commenced. Similarly, Wal-Mart and their PR firm adopted a similar strategy by creating a blog called ‘Working Families for Wal-Mart’ to counter the negative publicity the company had received on the internet. These cases highlight organizations’ risks and consequences when resorting to deceptive online marketing tactics to shape public opinion. On the other hand, organizations can fall victim to astroturfing when competitors spread false information about them. Astroturfing campaigns often involve spreading defamatory and false content, like fake online reviews. One notable instance is Samsung facing a $350,000 fine in Taiwan for publishing false comments and reviews to promote its products and disparage competitors. Similarly, McDonald’s was penalized in Japan for recruiting 1,000 part-time employees to queue up early, generating buzz for its Quarter Pounder burger launch. It claimed it was for “customer feedback” and “market research.” Recently, proactiveness has been witnessed from online marketplaces, consumer-hosting platforms, and intermediaries. Major companies like Amazon and Google have been actively combating fake reviews and fraudulent practices in court. Amazon proactively blocked over 200,000,000 suspected fake reviews in 2022. As of May 2023, Amazon has taken legal action against 94 fraudsters in the US, China, and Europe, aiming to combat the issue of fake reviews. In June 2023, Amazon filed four new lawsuits against fraudsters attempting to mislead customers and harm selling partners by facilitating fake reviews. The lawsuit entities, namely, Nice Discount, Littlesmm, MangoCity, and Reddit Marketing Pro, were accused of selling and promoting fake reviews to manipulate product listings on Amazon. Such fraudulent activities are primarily driven by an emerging ‘fake review broker’ industry, where brokers approach customers through websites, social media, and encrypted messaging to solicit fake reviews in exchange for money or incentives. Similarly, Google filed a lawsuit

[By Siddharth Chaturvedi] The author is a student of Dharmashastra National Law, University.   Introduction Indian Public Sector Units (PSUs) have enjoyed monopoly in different sectors for a long period of time. However, this is likely to change in the coming time as we analyse the findings of the Supreme Court in the case of Coal India Ltd. vs the Competition Commission of India (Coal India).. The judgement has paved the way to challenge the monopolies of the Public Sector Unit by holding that the Competition Act will be applicable to Coal India Ltd. This piece attempts to analyse the judgment’s findings and its significance. . In doing the same, the author briefly traces the history of the Nationalisation Act along with Schedule 9 of the Constitution, before proceeding to analyse the judgment. The author concludes that, though the judgment should be welcomed because of opening nationalised companies to competition and strengthening the powers of the CCI, however, the ratio decidendi of the judgement rests on a weaker foundation, due to a few wrong assumptions such as the mention of the Essential Commodities Act, which will be subsequently highlighted in the piece. Coal Mines Nationalisation Act, 1973 and the 9th Schedule of the Constitution The Coal Mines Nationalisation Act, of 1973 was introduced to ensure  that the ownership and control of resources are held with the State in order to serve the common good of people through the distribution of resources. In the 9th Schedule of the Constitution, one gets to see that Coal Mines Nationalisation Act, 1973 is mentioned as the 99th item. However, the Coal Nationalisation Act, of 1973 was repealed by the Repealing and Amending (Second) Act, of 2017, thus taking the Act outside the ambit of the 9th Schedule of the Constitution. Hence, the Coal Mines Nationalisation Act, of 1973 could be challenged on grounds of being ultra vires of the Constitution. It is also important to note that prior to the judgment of Coal India Ltd. vs CCI, the Supreme Court had already stated in IR Coelho vs State of Tamil Nadu(IR Coelho) that any law which has been inserted in the 9th Schedule, has to be tested on the principles of the basic structure of the Constitution. Thus, there is no absolute bar on testing the validity of any law inserted under the Ninth Schedule. Against the backdrop of these two important developments, it is necessary to examine the judgement of the Supreme Court of India in Coal India vs CCI. Analysis of the Judgement Before arriving at its ruling, the Apex Court observed that Coal India Ltd is a Government Company. Further, the Court also stated that Nationalisation Act was passed in order to realise the goals of Article 39(b) of the Constitution, which states that ownership and control of the material resources of the country are to be distributed in order to subserve the common good. The Court also drew a lot of interesting analogies while arriving at its decision, amongst which was a reference to ‘slaughter mining’ and whether the same runs in violation of Section 4(2) (b) of the Competition Act. Section 4(2) (b) prohibits abuse of dominance if the enterprise limits or restricts the production of goods or provision of services or it restricts or limits the scientific development of the goods. However, the Court failed to provide any empirical evidence of Coal India Ltd indulging in slaughter mining, rather it proceeded on a hypothetical situation that Section 2(4)(b) of the Competition Act may be violated in the case of slaughter mining. The Court also rightfully drew the attention of the parties to the report of the Raghavan Committee where it was stated that despite being a State monopoly, these state enterprises had to operate within the realm of competition law. Importantly, the Committee had noted, which also finds mention in the judgement that the public sector should be open to competition and not given any preferential treatment. Further, the Committee Report also pointed out various ills such as preference in bidding, state patronage, restrictive trade practices etc. . However, the Court then, in the humble opinion of the author, unnecessarily devoted pages to highlighting the transformation of economic policies from 1991 to the present date, which could have been explained keeping in mind brevity.  The Court also answered in the affirmative that Section 19(4) of the Competition Act, which gives CCI power to assess whether a particular enterprise enjoys a dominant position or not,  a single factor itself. Moving ahead, the Court also proceeded to point out the importance of Section 19(4)(g) of the Competition Act, which gives the CCI the power to investigate whether an enterprise enjoys a dominant position or not, by taking into consideration whether the enterprise is a monopoly or in a dominant position due to being a Government Company or public sector unit. Thus, the Court effectively indicates that Coal India Ltd falls within the ambit of the purview of the Competition Act. The central argument of Coal India Limited, which was based on Article 39(b) of the Constitution, was also negated by the Court when it questioned how the Competition Act which provides for avoidance of anti-competitive agreements, abuse of dominance serves against ‘common good’? The Court’s central assumption behind the same premise was that while enacting the Competition Act, of 2002, the Parliament was aware of the Nationalisation Act and intended to regulate the competition of the State-owned companies or Public Sector Units. This certainly seems to be a correct argument, otherwise, in the author’s opinion, the Parliament could have carved an exception for State-run entities within the Competition Act itself. However, the Court could have further proceeded to strengthen its ratio decidendi on other arguments, rather than relying on Coal being removed from the Essential Commodities Act. The  Court observed that  Coal was removed from Essential Commodities Act, and thus observations of the judgment of Ashok Smokeless Coal India Ltd vs The Union of India ( Ashok Smokeless)will not

[By Khushi Saraf & Jhankar Katare] The authors are students at National University of Juridical Sciences, Kolkata.   Introduction In the modern digital era, data is of paramount importance, and getting access to data is quintessential to entering new markets. The holding and acquisition of data provide entities with the much-needed inputs they require to provide their services more efficiently and effectively. Access to data can enable the reduction of search costs, reduce entry barriers, and allow for easy entry and expansion into markets. With the ever-increasing importance of data in the survival of smaller entities, data has come under the lens of the essential facilities doctrine. Competition authorities across jurisdictions are criticising the practice of refusing to share data with competing entities. On the flip side, refusal to share data may not be competitive in every case. The availability of data on a large scale and its replicability suggests that not all data gives one a competitive advantage.  Against this backdrop, the present article explains the concept of the essential facilities doctrine (“EFD”). It has also sought to analyse the concerns associated with the refusal to share data by bringing it under the lens of the EFD. The last leg suggests that every kind of data may not fall under the ambit of EFD. Essential Facilities Doctrine The EFD propounds that monopolists must provide certain inputs that are essential to competition. A facility is considered essential if it is impossible or difficult to duplicate owing to technological, economic, geographic, or legal constraints. EFD doctrine has not been explicitly defined in India, but its development can be traced through various case laws in India and other jurisdictions. EFD is seen to be a subset of ‘refusal to deal’ cases. The doctrine can be seen as a limitation to the general rule that a firm is not obliged to share its resources with other firms. Further, EFD may be applied to §4(2)(c) of the Competition Act, 2002, which prohibits those practices that result in the denial of market access. Because no court in India has delved into the idea of data being an essential facility, the EU jurisprudence is worth noting. Is data an essential facility? For data to be considered ‘essential data’, i.e., data essential to competition, it must fulfil the same criteria as essential facilities. There must be a predominant monopoly over the data, it should be indispensable and irreplicable, and there must be a justified reason for denial of access due to the viability of the data. The applicability of EDF has been reviewed in the EU Commission Report, which states that data can be considered essential for competition under the purview of Article 102 TFEU. Whether data can be ‘indispensable’ is a heavily impugned topic. Owing to its non-competitive nature, many question the applicability of EFD to data. This is furthered by the opinion that the monopolisation of data by one dominant position in the market does not prevent competitors from gathering equivalent data from other sources. There are also cases where data can be exclusive for contracts or database secrecy, giving the monopolist the right to deny access. The irreplaceability of data is contingent on the type and relevance of the data. In Telefonica UK/Vodafone UK/Everything Everywhere/KV, the Commission held that even though joint ventures can process more consumer data, it doesn’t hinder the competitor’s ability to collect equivalent data from substitute comparable resources. A recent joint report published in 2016 by France and Germany analysing the essential characteristics of the data-driven sector stated that EFD is only applicable in cases where the data is truly distinctive and unique, and the competitors are stopped from performing their services due to its absence. The second aspect requires that for the facility to be essential to competition, it is pertinent that other firms cannot compete without it, and the firm having access to the facility can easily eliminate competition. In online markets, data can be deemed to be essential because it helps in creating positive feedback loops, as access to large data troves guides the investments that an entity makes. For instance, data analysis enables targeted advertisements and improves the efficiency of the services offered, which in turn increases the profits of a company. Some have opined that the elimination of competition’s indispensability shares a cause-and-effect relationship. Notably, in the recent Microsoft I judgment the criterion was rephrased as ‘eliminates all effective competition’. The need arises due to the fact that Microsoft does not eliminate all competition in secondary market spaces even though being a 60% stakeholder, failing the criterion of eliminating all competition. The last criterion is ‘objective justification’ for the denial of access, which may include the capacity of platforms exceeding its limits, the impossibility of supply, and consumer welfare. The justifications used may depend on various requirements but there are no intrinsic vices that stop the application of this criterion to essential data. Not all data is an essential facility Data sharing and the refusal to share data is a relatively new area in competition law, which has received attention only in the recent past, ergo there is a dearth of applicable laws and guidelines. For this reason, data as an essential facility ought to be analysed on a case-by-case basis. Not all data falls under the purview of EFD. For instance, in the EU cases of Google/ Doubleclick and Facebook/ Whatsapp, the Commission, despite acknowledging the importance of the data troves held by the big firm, held that access to that data would not impact competition negatively or provide an added advantage. Furthermore, the relevance of data depends on the product-market in question, and it may be different in different markets. This implies that not all kinds of data is indispensable to competition, and it is solely dependent on the circumstances in the relevant market. Additionally, in the Telefónica UK/Vodafone UK/Everything Everywhere case, the Commission opined that consumers share their data with multiple platforms. This again points to the fact that certain data

[By Akash Gulati & Sanidhya Bajpai] The authors are students at RMLNLU, Lucknow.   Introduction India is the fastest-growing e-commerce market in the world. Online platforms like Amazon, Flipkart, Zomato, etc., offer a marketplace where the divergence of buyers, sellers, and advertisers partake in commerce. The presence of an online marketplace makes trade and commerce efficient and transparent. The testimonies of the stakeholders involved reveal that the online platforms, through preferential listing and unfair contract terms prima facie, constrain the marketplace and consequently bring competition concerns to the forefront. This piece delves into the key competition issues which have a proclivity to comprise the platform neutrality of the e-commerce platforms. Platform Neutrality Platform neutrality simply means a neutral treatment of complements by the platform free of unreasonable bias and discrimination. In the context of e-commerce, it means that any platform connecting the seller to the market cannot unreasonably put sellers at a disadvantage, either in isolation or in conjunction, by preferencing their own products over the other sellers. Platforms being in control of all listing parameters find themselves in such powerful positions where they can push around the discoverability of products that systematically alter sales. Further, platforms can also bestow perks upon certain sellers, some of which they directly or indirectly own, which make them seem more authentic when compared to peers. This piece is in the context of the market-leading platforms. Online marketplaces rely on algorithms to provide a sorted list of products from sellers in response to a user query/demand. This seems to be a task that enables efficiency, but when coupled with the vertical integration of goods sold by the marketplace itself, a leeway is cracked open. Thereon the platform is not only a service provider to the sellers, but also a competitor. Skewed Listing The algorithms which sort the sellers do not seem to produce neutral results. A common complaint of sellers on platforms such as Amazon and Flipkart is that their preferred sellers are usually displayed on the first few pages of search results (see CCI’s report as well). Consequently, the non-preferred sellers are pushed away from the reach of the customers onto the later pages. It is seen that even the lesser-priced products from general sellers are pushed back in order to increase the visibility of the same products from preferred sellers. Vertical Integration Foreclosing Competition The preferred sellers include the directly or indirectly owned entities of the platform itself and the other sellers who sign up for the preferred seller program. This vertical agreement between the sellers and the platform allowing sellers to pay a fee to gain visibility and outperform peers can tend to foreclose competition. Especially in cases where the competitors who are as efficient as the preferred sellers, both in terms of pricing and quality, lose out on sales simply because of lesser visibility. Such vertical arrangements seem to be in violation of Section 3(1) read with 3(4). These agreements tend to foreclose competition and drive current competitors out of the market which might result in an appreciable adverse effect on competition (“AAEC”). The lack of transparency on the modus operandi of these platforms makes it an iffy affair to determine the extent of such AAEC. Role of Private Labels A private label product is a third-party manufactured product that the retailer sells under its own brand name. In the e-commerce sector, giants such as Amazon and Flipkart sell private label products in vertical integration to their service as an intermediary. Such giants have access to the plethora of user data and preferences which the competitors lack. Therefore, the platforms have the means to delineate the most profitable market segments and enter with the most personalized products. This strategic entry into new relevant markets can be termed as the efficiency of the platform. However, when this gets coupled with the undue advantage of preferential listing of private label products (vis-a-vis similar products of identical ratings) and the deep discounting offered on these products, the platform might be venturing into violation of the Sections 4(2)(a)(ii), 4(2)(b)(ii) and 4(2)(c). Unfair Terms of The Contract The leading online shopping and other e-commerce platforms such as Amazon and Flipkart have a superior position to other sellers by virtue of them owning the platform and occupying large market shares. This bestows them with superior bargaining power and makes other sellers susceptible to the unfair terms of the contract coupled with unilateral changes. The same was also observed in the CCI’s report on the e-commerce market study in India. The French courts fined Amazon on the grounds that it imposed ‘unfair’ terms on its suppliers. The courts found that Amazon, through its higher bargaining power, has obtained contracts that allow it to change the terms and policies at any time without prior notice. The sellers in the commission’s report have alleged that e-commerce platforms have imposed similar onerous obligations in India. The seller/vendor testimonies prima facie show that the e-commerce platforms have indulged in agreements that are likely to have exclusionary effects on the competition and are unfair/exploitative to the sellers and consequently are in contravention to Section 3(4) of the Act. The platform’s higher bargaining power allows it to impose exploitative/unfair terms on the sellers, and how these terms distress the sellers and distort the competition will be discussed further. Exclusivity agreement The e-commerce platforms engage in exclusive supply agreements that make a certain product exclusively available on only one platform. This hampers the customer’s ability to choose from a wide range of products and impairs the seller from selling the products on different platforms. The exclusive agreements, as reported in the commission’s report, are of two types; a) agreements that make a product exclusively available on one platform, and b) agreements that make a platform list only one brand in a specific product category. These types of agreements could lead to situations where a certain brand’s product is listed on a platform exclusively, and its competitor is delisted, which would be detrimental to

[By Mahiya Shah & Chaitley Sharma] The author are students at Gujarat National Law University.   INTRODUCTION Today’s world is rapidly transitioning into a new digital era, with digital marketing being one of the latest additions to the global economic landscape. This new digital economy involves the sale of goods through cyberspace, using digital platforms which facilitate interaction between multiple suppliers and customers. The present era sees this global phenomenon as a critical driver of prosperity by impacting innovation, productivity, and, most importantly, consumer welfare. Digitization has enabled the emergence is what is popularly known as “Big Tech,” which refers to Google, Amazon, Facebook, Microsoft, and Apple. The sizes and worldwide influence of these companies have prompted calls for antitrust action to put a rein on their growing size and power. Globally, imposing heavy penalties has been the go-to reprimand to address the concerns about unfair business practices and maintain a level playing field in the technology industry. First, Microsoft and now, Google and Meta Platforms have faced penalties due to their anti-competitive practices. Google was fined a whopping $5.1 billion for breaching EU antitrust rules in the 2018 decision of the European Commission. More recently, this year, the European Data Protection Board (EDPB) imposed a fine of $1.3 billion on Meta Platforms, the parent company of Facebook, for breaching the data privacy regulations of the European Union. The recent cases of Google Android, Google Play store, FHRAI & anr. v. MMT-GO and OYO, ongoing inquiries against Apple, WhatsApp privacy policy, Amazon & Flipkart, Zomato & Swiggy, and Bookmyshow are illustrations of the growing convergence of digital markets and competition in the global economy. Undoubtedly, the Competition Commission of India (CCI) has done its fair share of keeping a check on these big-tech companies by conducting inquiries, imposing severe penalties, and passing orders to correct their wrong actions. However, there had been doubts regarding the effectiveness of such actions by the authoritative bodies under the existing regulatory framework which led to the formulation of the ex-ante regulations,  under the new Competition (Amendment) Act, 2023. Ex-ante regulations are those which are formulated with the purpose of identifying and resolving potential issues in advance, aiming to influence the conduct of stakeholders through proactive regulatory intervention and the potential detrimental effects of such adopting regulations in India will be discussed in the upcoming sections. RECENT MODIFICATIONS TO THE COMPETITION ACT: AN ATTEMPT AT STRENGTHENING FAIR TRADE Given this growing importance and the swift growth of digital businesses in the present age, discussions regarding the requisite modifications to the Competition Act of 2002 have been in progress since the constitution of the Competition Law Review Committee (CLRC) by the Ministry of Corporate Affairs (MCA) in 2018 intending to provide the CCI with enhanced capabilities to monitor and regulate digital giants. In July 2019, the committee submitted its report, leading to the subsequent passing of  ‘The Competition (Amendment) Bill, 2022’. The Bill contained certain amendments targeted explicitly at digital markets. Later in 2022, the Ministry of Corporate Affairs (MCA) proposed specific amendments to the Competition Act, which were subsequently referred to the Joint Parliamentary Standing Committee (Standing Committee) for comprehensive examination and engagement with different stakeholders. After considering the inputs from the Standing Committee, the MCA incorporated additional amendments and presented the final draft to Parliament on 8th February 2023. On 22 December 2022, the Standing Committee issued its 53rd Report concerning ‘Anti-competitive Practices by Big Tech Companies‘ advocating the need for ex-ante regulations through a new legislation called the ‘Digital Competition Act’ (DCA). In consultation with various stakeholders, the committee highlighted anti-competitive practices in the digital sector and to combat these practices, it proposed enacting a sui generis law to govern the digital market in an ex-ante way. The rationale behind implementing such rules was to tackle anti-competitive practices and market dominance at an early stage, thereby promoting fair competition and protecting consumers’ interests. By imposing specific obligations on ‘big’ digital players, the goal is to ensure a level playing field and prevent market distortions caused by the dominant position of certain players. Following the Standing Committee’s report, the MCA provided the Committee on Digital Competition Law (CDCL) with specific terms of reference: (i) determine whether the current framework of the Competition Act is adequate to address the challenges brought on by the digital economy; (ii) clarify the need for a separate piece of legislation is necessary to establish an ex-ante regulatory mechanism for digital markets; and (iii) research global best practices for regulation in the area of digital markets. In light of this, CDCL held its first meeting on February 22, 2023, to discuss the need for ex-ante law. The Lok Sabha passed the amendments to the Act on March 29, 2023, for stricter compliance, including by giving the antitrust regulator the authority to impose penalties on the global turnover of offending firms, which could pave the way for harsher sanctions against organizations like Big Tech. Today, the CCI cannot penalize corporate entities based on their annual worldwide turnover. Penalties only apply to the company’s sales in the relevant market. The amendments also simplify compliance by giving CCI the authority to control mergers and acquisitions (M&A) based on deals valued at or above the 2,000-crore threshold, provided that the target company has significant business operations in India. It also suggested that CCI must decide within 30 days whether a merger or acquisition will likely negatively impact the market. While these amendments were introduced with the view to provide a suitable conclusion to these discussions and ensure fairness, contestability and innovation in the digital landscape, the ex-ante nature of these regulations has sparked a new debate on whether ex-ante regulations while seeking to address competition concerns proactively, may inadvertently create adverse effects in the existing ecosystem. The recommendations put forth by the committee demonstrate commendable intentions and justifications but the n ex-ante method to govern the firms’ activity is doubtful to be suitable for the current landscape. If ex-ante regulations in a digital

[By Ridhi Gupta] The author is a student of Rajiv Gandhi National University of Law (RGNUL), Punjab.   Introduction The Ministry of Corporate Affairs in February this year, passed an order to create a Committee on Digital Competition Law (CDCL) to examine whether there is a need to have a separate legislation to regulate competition in digital markets. The report of CDCL is still awaited. The establishment of CDCL is not the first step taken by the Indian Government towards realising the need to regulate the digital space in order to ensure fair, free and healthy competition over the digital landscape. In December, 2022 the Standing Committee on Finance had suggested the need of enacting a Digital Competition Act and the revamping of the competition law regulator, by creating a unit specialised in digital markets, to monitor and deal with the issues involving Systemically Important Digital Intermediaries (SIDIs). Not only this, very recently in March this year, the Government introduced a Draft Digital India Act 2023 with an aim to replace the existing Information Technology Act 2000. This Draft Act also touches upon firstly, the need of ensuring an “open internet” where there is choice, competition, online diversity, fair market access and ease of doing business for startups and secondly, the need for amending the Competition Act 2002. This article shall first delve into the observations made by the Standing Committee in brief, followed by an analysis of the methods adopted by different jurisdictions to regulate competition in digital markets and be concluded with suggestions and recommendations regarding the method India can adopt in this direction. Suggestions of the 2022 Standing Committee Report In its Report, the Standing Committee made a number of recommendations for regulation of the anti-competitive behaviour over digital space. These suggestions can be classified into three major categories: A Digital Competition Act with Ex-ante regulations The most significant recommendation made by the Standing Committee is the enactment of a separate legislation in the form of a Digital Competition Act to deal with competition law issues among digital markets. The Report distinguishes between traditional and digital marketplace by laying down special characteristics of a digital market including the prevalence of network effects, increasing returns to scale and the existence of only a few dominant players. A few dominant players utilising the network effects to maintain their dominance leads to what has been referred to in the Report as the ‘winners-take-all-markets’ phenomenon, wherein these players use their position to make it difficult for other players to enter the market, they stifle innovation and influence the behaviour of the non-dominant players, ultimately emerging as ‘winners’ having conquered the entire digital market. Giving consideration to these characteristics the Report emphasised the need to enact a separate legislation with ex-ante regulations for SIDIs, as opposed to the present regime of majorly ex-post regulations under the Competition Act, in order to prevent dominant players who are likely to abuse their dominant positions or indulge in anti-competitive conduct, before the digital market gets monopolized or conquered by such players. Revamping the Competition Commission of India (CCI) Another recommendation is the creation of a specialised Digital Markets Unit within the CCI to monitor and deal with the matters pertaining to digital markets. This unit would constitute of experts, attorneys and academicians skilled to deal with matters relating to SIDIs. Regulation of SIDIs Further, the Report opines the need for defining and determining the number of SIDIs in the digital market based on their revenues, market specialisations and number of active users. It suggests a number of regulations for SIDIs including regulations to control the usage of data by SIDIs and to ensure fair access to digital markets for all the market participants. Methods Adopted by Other Jurisdictions: The Soft or The Hard Approach? The disruptions to competition being caused by dominant digital players is not a new occurrence and it has been a while since the world has been facing this issue. Different jurisdictions have decided to tackle this issue differently. While some have opted for the soft approach, by making use of guidelines, reports and market studies, others have chosen the hard approach, by making amendments to existing laws or enacting laws. What is important is that each jurisdiction has made an attempt to choose the approach which helps it in tailor making a regulatory mechanism for the digital markets in their own countries. A brief analysis of the countries falling under these two approaches has been made as follows: The Soft Approach Jurisdictions like China, Japan, Brazil and Australia fall under this category. China introduced the Platform Guidelines in 2021, to regulate the competition issues over the digital space. These guidelines cover several significant aspects including what could constitute anti-competitive agreements or what could be an abusive conduct, when dealing in digital markets. Further, the guidelines also provide remedies in the nature of divestiture of data or modification of platform rules. Though Japan and Russia have amended their laws to regulate the digital markets, they have also been active in constantly publishing reports and guidelines to bolster their regulatory mechanism. Some jurisdictions like Brazil and Australia have conducted market studies and published working papers. Brazil, for instance, released two working papers, one of them being a summary of how other jurisdictions were dealing with digital markets, while the other summarizing the rulings of its competition regulator, the Administrative Council for Economic Defense (CADE) over digital platforms. Australia’s competition regulator Australian Competition & Consumer Commission (ACCC), on the other hand, has been taking out interim inquiry reports biannually, to support reforms and protect both consumers and businesses. The Hard Approach Jurisdictions like European Union (EU), Italy and Japan fall under this category. EU enacted the Digital Markets Act, 2022 to regulate the ‘gatekeepers’ acting as intermediaries between businesses and end consumers, to ensure fair and healthy competition in digital markets. Earlier in 2019, EU introduced a regulation to provide and promote a fair and predictable business environment for players over the digital

[By Badal Singh] The author is a student of Hidayatullah National Law University.   Introduction Owing to the nascent origin of Competition law in India, not many judicial precedents have been set with respect to the jurisdiction of CCI. Instances of conflict of jurisdiction between CCI and specific regulators have become a common muddle for the judiciary to deal with. The judiciary’s role in determining the conflict of jurisdiction or “forum shopping” has become crucial in a period where innumerable such cases have been on the rise. Delhi High Court’s recent judgment in the case of ICAI v. Competition Commission of India, excluding the role of CCI as a market regulator in matters concerned with other independent statutory regulators not related to trade or commerce has re-augmented the need to define and determine the jurisdiction and scope of power of CCI to inquire into matters pertaining to market monopoly and competition. The court in its judgment held that CCI’s jurisdiction to entertain matters is limited only to matters that impact the market and are related to trade, business, or commerce. In this article, we shall be discussing the extent of CCI’s jurisdiction as provided under the Competition Act,2002 with special reference to the recent decision passed by the Delhi High Court in the matter of ICAI v. Competition Commission of India and various other judicial pronouncements. Jurisdiction of CCI as per Competition Act, 2002: Extent and challenges Section 18 of the Competition Act,2002 elucidates it to be the duty of CCI to eliminate practices having a negative impact on the competition prevailing in the market, preserve the interests of the consumers, and promote freedom of trade carried on by individuals in the Indian market. Along with that, Section 19 is a complementary clause that ensures that CCI carries its duties in the prescribed manner. It provides CCI the power to inquire into any alleged contravention of provisions mentioned under Section 3(1) and Section 4(1) of the concerned act. These provisions prohibit the parties from entering into any agreement that is likely to cause an “appreciable adverse effect” on the market in India and abuse of dominant position in the market in India respectively. The use of the “may” clause makes it a discretionary power at the instance of CCI whether to carry out such inquiries or not. Also, Section 20 of the act provides CCI similar powers to conduct inquiries in matters of the combination of entities. It is evident from the manner in which the provisions have been drafted that the jurisdiction of CCI is wide and legislative restraints upon the same are minimal.  Section 60 of the act stipulates the provisions to have an overriding effect over other laws, meaning anything inconsistent with any other statute in force for the time being shall not invalidate the provisions of the concerned act. It can thus be concluded that CCI’s power to carry out inquiries and its untamed jurisdiction over the stipulated matters widens the ambit of its interference in business matters. CCI’s jurisdiction has always been a matter of deliberation before the Judiciary in the recent past. The dispute arises when there exists a point of intersection with respect to the ambit of statutory regulatory authorities and the jurisdiction of CCI to inquire into the matter. The major reason behind the same is due to the usurping of the jurisdiction of other regulators or courts by the CCI, in matters that are to be specifically dealt with and tried by them. Legislative ambiguity, jurisdictional error, or irregularities in interpretation, whatever the reason may be, the conflict has always been a cumbersome task for the judiciary to determine and decide. CCI and its conflict with IPR and statutory regulatory authorities IPR and Competition: A Conflict of Jurisdiction IPR and competition are antithetic notions and an approach that balances the interests of IPR holders and promotes competition within the market is essential to attain the goal of a free and fair market. The Competition Act, 2002, through its section 3(5) tries to create such balance by excluding IPR holders and their rights to restrain from any kind of infringement or to impose any “reasonable” restrictions necessary for the protection of their IPR, from the purview of anti-trust or anti-competitive agreements. But the protection is diluted by “reasonableness” as the condition precedent in providing licenses to the registered users, and the power to determine whether the conditions imposed are “reasonable” and not in restraint of competition, vests in the Competition Commission of India. Thus, a dilemma as to when CCI can enjoy jurisdiction in matters related to patents, copyright, and other forms of IPR has been one of the prime causes of the rise of litigations. The primary case dealing with a similar conflict of jurisdiction between the Competition Commission of India and The Copyright Board was Super Cassettes Industries Ltd. vs. UOI & Ors. Delhi High Court in its judgment held that the authority and jurisdiction granted to CCI and Copyright Board govern diverse aspects of law and that the Copyright Board is not a potent instrument capable of dealing with and promoting competition in the Indian market.  The court held that in case there exists a conflict between the Competition Act and the Copyright Act, the authority to determine the jurisdiction shall vest in the Competition Commission of India. Thus, it can be said that remedies provided under various statutes governing IPR and under the Competition Act, of 2002 to are distinct. While the statutes dealing with IPR provide the right in personam, the Competition Act provides the right in rem to the individuals against the abuse of dominant power by several entities. The presence of efficacious remedies under other statutes does not negate CCI’s jurisdiction to entertain the matter and remedies under such acts are capable of standing independently without any conflict. The same has been held in the case of Ericsson v. Micromax as well. Is CCI usurping the jurisdiction of statutory regulatory authorities or regular courts?

[By  Akash Gulati & Ashutosh Yadav] The author are students of Dr. Ram Manohar Lohiya National Law University.   Introduction The Competition (Amendment) Act of 2023 (hereinafter “amendment”) has introduced an addition to the existing leniency mechanism popularly called “Leniency Plus.” The new provision aims to enhance cartel detection and cooperation with antitrust authorities by incentivizing cartels to disclose the existence of another cartel during the original leniency proceedings. However, the true efficacy of the mechanism will depend on the uniform application of leniency principles, the imposition of aggravated penalties, and the potential introduction of criminal provisions for cartels. This article puts forth the case that a greater deterrence for cartels making disclosures related to selective cartels is missing from the framework to fully utilize the increased incentives. What is leniency plus? The amended provision purports to provide an extra layer of leniency to the cartel cooperating with the anti-trust authorities by providing information about the existence of another cartel during the original leniency proceedings resulting in an additional reduction in the penalties. According to the amended Section 46 (4), any producer, seller, distributor, trader, buyer, or service provider who discloses the existence of another cartel violative of Sec. 3 of the act would be rewarded with further reduction in the penalty. This leniency not be provided concerning the newly disclosed article, but also reduced penalty would be levied on the original case of a cartel, therefore justifying the word “plus”. The need behind the introduction of a “plus” mechanism can be construed by the arduous task of cartel detection, which through the added incentive in this mechanism in the form of extra leniency, the Competition Commission of India (hereinafter “CCI”) might detect and penalize more cases. Efficacy of existing leniency mechanism The leniency mechanism was originally introduced in the year 2009 with the objective of ramping up cartel detection in the market. To achieve this, it resorted to the means of providing a lesser penalty as an incentive where the cartels themselves disclose their violations of the act. However, a total of only 21 leniency application cases emerged during the period of 2009-2022, with the majority of them being reported in the period 2021-2022 whereas the first application was filed way in 2017, also known as the Brushless DC fan cartel case. The reason for such low turnout of the leniency application though being a remedial policy, can be, firstly, because the advantages from it are minimal in comparison to the gains from future collusion with the same associations, i.e., the monetary relief granted on the penalty levied is less than the profits made under the continued cartelization. Secondly, in cartel enforcement, the cartels often carry the thought they will not be detected or in the case of being detected, the penalty levied on them can outweigh the profits gained from cooperation, preventing them from self-report under the leniency mechanism. Furthermore, according to the “leniency principle” the amount of leniency to be granted must be proportionate to the “relevance of the information” shared by the leniency applicant with the authorities. In contrast to that, it has been observed that CCI often acted vaguely without providing the rationale for granted leniency based on the “relevancy” of the information disclosed, which raised scepticism on the application of the leniency mechanism as happened in the Brushless Case, where a 75% leniency was awarded without providing any rationale. The Competition Law Review Committee, in its report published in 2019, acknowledged these reasons and recommended the need to inculcate the “leniency plus” with the reasoning that the promise of added reward for reporting another cartel would encourage more enterprises to come forward with disclosures about anticompetitive agreements, making it considerably easier for the Competition Commission of India (“CCI”) to uncover and prosecute cartels. The view was also upheld by the CCI as highlighted in the case of Chief Materials Manager, North Western Railway v. Moulded Fibreglass Products. How good is the amendment equipped to ramp up whistleblowing The newly added Section 46(4) now formally incentivizes whistleblowing for the cartel participants to disclose another existing cartel either connected or unconnected to the existing one. The quantum of the further reduction in the penalty will be decided by the CCI and regulations regarding the same would be added to the existing lesser penalty regulations. Currently, the regulations provide for a reduced penalty of up to or equal to 100% to the first applicant, while the second applicant gets a reduction of up to 50% and the subsequent ones are eligible for a reduction of up to 30%, which now coupled with the reduction for a subsequent cartel disclosure, would yield greater reductions. To understand the magnitude of the effect that such further reductions can cause we look at the case of the Beer Cartel which was initiated upon the lesser penalty application by Crown Beer & SAB Miller. In this case, the CCI levied penalties computed upon 2% of relevant turnover or 0.5 per cent of relevant profit, whichever was higher. The penalties were to the approximate tune of 1253 Cr, 317 Cr, and 151 Cr for United Breweries Limited, Anheuser Busch InBev, and Carlsberg India Private Limited respectively. Wherein Anheuser was granted a hundred per cent reduction in penalty for being the first applicant, fifty per cent for United Breweries, and twenty per cent to Carlsberg. Even after the reduction by the CCI, the penalties are still cumbersome enough for the companies to look for more ways to do away with them, herein, the incentive of disclosing a new cartel, and then achieving more reduction in the current fines and the new cartel-related fines, would be a good enough incentive. This would now be possible post the application of the amendment and will strengthen enforcement via incentivized whistleblowing. The increased scope of availing reduced penalty also gets coupled with the increased scope of penalties as the amendment also pegs up the quantum of the penalties by introducing the provision of using the global turnover,