The Need to Defang e-Fang

Context: Flipkart and Amazon are being investigated under the FEMA for ascertaining their indulgence in exclusionary tactics through exclusive arrangements, deep-discounting and preferential listings on their platforms. 

Concerns with Online Enterprises/ Intermediation Services

• Violation of anti-competitive agreements by E-commerce sites.
• Vertical restraints and abuse of dominance.
• Abusive practices in the market for licensable smart mobile device operating systems.

• It has resulted in the imposition of unfair conditions on manufacturers of Android smartphones.
• Like mandating pre-installation of Google apps and restrictions on manufactures.

• Price-fixing and menu fixing: concerns on food delivery platforms.
• Ability of online enterprises to ‘tip the markets’ in their favour. 

Desirable Monitoring Efforts

• Antitrust regulators need to strike a balance between enforcement and preserving the competitiveness of digital markets.

• Quick-fix intervention measures could thwart innovation, thereby harming consumers.

• Set up new ‘platform to business’ rules, launch an inquiry into the Internet of Things (IoT), and implement regulations to enable/provide

• Businesses to know the criteria determining their position in search results
• Greater clarity and protection from unfair terms and conditions
• App developers can challenge decisions by app stores wishing to remove their content. 

• Evaluation of existing market definition rules to formulate a consistent and accessible approach to market definition across different industries, particularly the digital sector.
• Assess anticompetitive behaviour and abuse of dominance in online search and advertising.
• Align competition law to the changing business environment and modernise the Competition Act. 
• Amended merger control rules to introduce transaction value thresholds, to encompass acquisition of digital enterprises.

• Presently there is absence of merger assessment in several jurisdictions, including India, on account of domestic turnover thresholds.
• Restriction on CCI to scrutinise deals in the tech sector that do not breach the prescribed asset or turnover thresholds in India.

Conclusion: Competition law needs to be fine-tuned to discourage predatory behaviour in India’s digital economy.