How India is Shaping Competition Law for the Digital Age

Image: Unsplash

How India is Shaping Competition Law for the Digital Age

With the establishment of the Competition Commission of India (“CCI”) in March 2009, India became one of the youngest competition-conscious nations worldwide. In its 13 years as a watchdog of India’s industry, the CCI has heard 1,200 cases, completed 900-odd mergers and ...

August 5, 2022 - By Vaibhav Choukse, Sidharrth Shankar

How India is Shaping Competition Law for the Digital Age

Image : Unsplash

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How India is Shaping Competition Law for the Digital Age

With the establishment of the Competition Commission of India (“CCI”) in March 2009, India became one of the youngest competition-conscious nations worldwide. In its 13 years as a watchdog of India’s industry, the CCI has heard 1,200 cases, completed 900-odd mergers and acquisitions clearances, and maintained an average clearance timeline of 30 days – proof of the regulator holding its own against global benchmarks. It has also been innovative in introducing green channel initiatives and regularly updating the regulations to meet evolving stakeholder needs. And ultimately, the CCI has set up a unique digital unit to demystify complexities in the digital domain and thereby, bring in the desired changes to the Competition Act, which is more flexible than other regulatory-centric laws in India.

Since the primary legislation in 2002, a surfeit of new adjudication challenges have posed several jurisprudence-related questions with respect to the digital boom in pre- and post-pandemic times. The pending amendments that have been under discussion include an array of concerns that aim bring a smooth way forward for the regulator to adapt to the dynamic markets that are safeguarded by the CCI. For example, the amendments proposed by the Competition Law Review Committee include reviewing the minimum threshold for M&A clearances, deal-value, and transaction-size, and further include a whip on hostile takeovers, adequate provisions for settlements, etc.

E-Commerce and the “Relevant Market”

The e-commerce sector has been instrumental in closing the gaps between online and brick-and-mortar retail markets, especially given the online and offline worlds are readily merging to create for a much more democratic marketplace. In addition, the development of the Open Network for Digital Commerce, a free-charge, accessible online system for traders and consumers, is yet another boost to the democratization of retail space, right from the kirana stores to even artisans. This transition will ultimately lead to consumer empowerment on a different scale altogether. The integration of two different market spaces brings focus to the debate on the “relevant market.”

A compelling need is the modification of the “relevant market” as defined in Sections 2(r), (s), and (t) of the Competition Act. Without early attention on this, neither the Competition Act nor the Commission will be able to keep pace with the desired regulation of the ever-changing “market.”

Globally, certain instances have proven a litmus test for the need of such awareness. For example, in January 2022, the United States Federal Trade Commission and the department of justice initiated a joint public inquiry into the revision of examination of the merger guidelines, etc. Similarly, in July 2021, the European Commission iterated the need to check the definition of “market” with a view to amend it. In another instance, the Australian Competition and Consumer Commission in February 2022 sought public opinion on the competition scenarios, and abuse therein, if any, in the digital space dealing with consumers.

The Way Forward

While the Commission is cognizant of the need for relevant amendments to the Competition Act and its functioning, the reality is that India’s digital world still grapples with a complex regulatory environment. While the country awaits the urgent Data Protection Legislation and contends with the ongoing tech-driven innovation in respect of AI, IoT, blockchain, etc., the CCI has to navigate the labyrinth of complexity. Only then will it have a smooth and effective mechanism to come to grips with the dynamics of the “relevant market,” keeping up with the ‘competition’ and ‘consumer’ in the balance of power.


Vaibhav Choukse is a Partner & Head of Competition Law Practice at J. Sagar Associates (JSA) in New Delhi. 

Sidharrth Shankar is a partner at JSA, where he advises on private equity and venture capital transactions in the manufacturing, healthcare and technology industries. 

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