Competitive behaviour needs to be gauged prior to market monopolisation, says Parliamentary panel

New Delhi, July 28 (IANS) A Parliamentary panel has taken serious note of the challenges posed by the winner-take-all markets where winners emerge within a few years of the market having evolved, and by the time, anti-competitive policies are formulated, the market tips in one direction and a winner emerges.

To tackle such a situation, the Parliamentary panel on Finance, in its report on anti-competitive practices by big tech companies, which was tabled on Thursday in Parliament, has suggested that competitive behaviour needs to be evaluated ex-ante before markets end up being monopolised instead of the ex-post evaluation, which is being carried out at present.

Defining systemically important digital intermediaries (SIDIs) or digital gatekeepers, the panel opined that India must identify the small number of leading players or market winners that can negatively influence competitive conduct in the digital ecosystem, as SIDIs based on their revenues, market capitalisation, and number of active business and end users.

It further felt that India should also adopt definitions to ex-ante regulate the behaviour of SIDIs, systemically important digital as has already been done by various legislations across the world.

In this light therefore, the panel recommended that stakeholders, working with the Competition Commission of India (CCI) and the Centre, must collaborate to arrive at a reasonable definition of SIDIs.

Further, the SIDI within certain fixed months of its online platform being designated as such, and thereafter annually, must submit a report to the CCI, describing in a detailed and transparent manner the measures it has implemented to comply with its mandatory obligations.

The panel also pointed out to data advantage of market leaders, which or who have amassed wealth of personal data over a period of time, thus overshadowing the offerings of newer platforms in terms of quality and data fed personalisation, due to which the big tends to get bigger while a small entrant struggles to attain a critical mass of users and user data.

Thus, in the interest of fairplay and to ensure a level playing field, the committee recommended that a SIDI shouldn't process, for the purpose of providing online advertising services, personal data of end users using services of third parties that make use of core services of the platform.

Further, it shouldn't combine personal data from the relevant core service of the platform with personal data from any further core services or from any other services provided by the platform or with personal data from third-party services.

Also, the SIDI should avoid cross-use of personal data from the relevant core service in other services provided separately by the platform, including other core services of the platform, and vice versa.

And finally, it should not sign in end users to other services of the platform in order to combine personal data, unless the end user has been presented with the specific choice and has given consent. The committee further opined that a SIDI should not use, in competition with business users, any data that is not publicly available, that is generated or provided by those business users in the context of their use of the relevant core services of the platform, or of the services provided together with the relevant core services, including data generated or provided by the end users of those business users.

The panel further noted that certain mergers and acquisitions, particularly in the digital space besides having a deep impact on the market are not being captured by the CCI, because they don't meet the threshold of assets and turnover.

Thus, the Parliamentary panel has recommended that SIDIs should inform the competition watchdog of any intended concentration, where the merging entities or the target of concentration provide services in the digital sector or enable the collection of data, irrespective of whether it is notifiable to the CCI.