On 24 February 2019, the Department for Promotion of Industry and Internal Trade posted the draft National E-commerce Policy (ECP), which sets out a proposed framework for the sector. While the ECP states that its objectives to fill inside the regulatory gaps, it additionally highlights numerous competition troubles.
Data is the primary premise around which the ECP structured. It appears to suggest that data implies marketplace energy and monopoly. It notes that get entry to statistics can give upward push to market distortions and that companies might discover that once it scales past a sure point, it makes entry into that place through a 2d comer subsequent to not possible. According to the ECP, all of these outcomes in barriers to marketplace access.
However, it does no longer perceive any unique marketplace, which is usually a starting point to evaluate any opposition issue. The ECP widely defines e-commerce to consist of shopping for, promoting, advertising or distribution of goods, including virtual merchandise, and services thru an electronic community. Despite this definition, it seems to include social media networks and search engines like google in the ambit of e-commerce. Such a consolidated definition of a market is contradictory to competition law jurisprudence.
The general assumption that the entire digital zone will continually revel in network results appears overarching. Network consequences have been taken into consideration as a characteristic of a few markets, particularly multi-sided structures. However, this on its personal does now not suggest an anti-competitive effect.
Notably, India’s antitrust regulator the Competition Commission of India (CCI) has assessed online platforms. For example, its choice at the same time as assessing the conduct of Uber and Ola is a brilliant example of ways markets with network consequences aren’t antithetical to an aggressive landscape.
Data as a vital facility
The ECP concludes that loss of access to information for Indian groups would forestall them from growing excessive-fee virtual products. This end appears to be based totally on the basis that gets right of entry to records is crucial to running in the virtual market, which isn’t always supported through any substantive have a look at.
More importantly, the realization seems to assume that facts are exclusionary. However, facts present a contradictory structure. For instance, customers may be on several social media applications at the equal time, which means that a person’s statistics are on the market to several firms right away. In the absence of any actual proof of exclusion, these conclusions are likely to bring about an unsuitable evaluation of the marketplace.
The ECP also lists out precise behavior as anti-competitive, including predatory conduct, identified as big-scale capital dumping by establishments with deep pockets to finance sustained losses; and high fees charged for marketing with the aid of social media platforms and search engines like google.
Both predatory and excessive pricing require demonstrative financial evidence to be identified as anti-competitive behavior, which the ECP currently lacks.
The ECP is centered on imparting treatments that seem to decorate the welfare of the competition inside the market. For example, the ECP states that facts should be supplied to Indian entities which will compete. It additionally lauds the trendy overseas direct investment coverage that prohibits foreign-owned online marketplaces from adopting a stock-based totally model.
The ECP expressly states that the e-commerce area has improved patron welfare through the blessings of a larger sort of products and increased opposition by means of a manner or decrease expenses. The ECP additionally diagnosed the increased innovation in the zone. However, it does now not deal with the need to stability this expanded patron welfare with any possible steps in regulating the arena.