Digital Media, Data & Anti-Trust: In Light Of The Proposed Digital Competition Bill, 2024 – Antitrust, EU Competition

There are concerns that the current state of competition law is
unable to respond to the challenges posed by the expansion of the
scope of technology as well as the rise of digital economy. A dated
report submitted by the European Commission to the European
Parliament suggests that the basic framework of competition law
continues to provide a sound and sufficiently flexible basis for
the protection of competition in this era. However, this line of
reasoning was quickly abandoned, with the passing of the EU Digital
Markets Act (DMA), which aims to “make markets in the digital
sector fairer and more contestable”. From a layman’s
perspective the DMA was passed to identify and regulate the
‘Gatekeepers’ i.e., Google, Apple, Facebook, Amazon,
Microsoft (also commonly known as “GAFAM” in European
parlance). Under DMA, GAFAM is now required to “ensure
equitable access to data and promote interoperability among their
various platforms”. Following EU’s footsteps, a Committee
on Digital Competition Law was setup to evaluate the ex-ante
competition framework for the digital markets in India. As part of
the annexure to the report, a draft Digital Competition Bill, 2024
was also published to give effect to the Committee’s report.
This article does not seek to give any analysis of the Bill itself
since it is more important to understand the necessity of such an
ambitious Bill in the first place, which forms the essence of this
article.

The necessity of the Bill stems from the fact that the laws
pertaining to data have been a subject of long drawn scrutiny in
Indian jurisprudence since time immemorial. Although the Digital
Personal Data Protection Act (DPDP Act) has been enacted, it is yet
to be enforced given that the rules to give effect to DPDP Act are
yet to be tabled in the Parliament. Currently as it stands, markets
including digital markets can take full advantage of the lack of
comprehensive data laws in India which are currently governed under
the Information Technology Act, 2000. Businesses in India collect
personal data as well as sensitive personal data from their
consumers to understand prevailing market trends to surpass their
competitors and satisfy their customers. This is done without any
significant downside in relation to non-compliance with data
standards around the world, especially in regions like EU or
countries like US which have comprehensive data protection
standards. This issue is further exasperated by the fact that with
digitalization and expansion of the digital markets, certain
digital media and social media platforms are able to take full
advantage of the lack of regulations to get a significant advantage
over their competitors in the Indian market economy. These
platforms have started significantly investing in the collection of
user data through active and passive means in India. Platforms
monitor consumers behaviour and trends through automated means
which helps them make effective strategies while keeping a tab on
their competitors (this would typically not be allowed under EU/UK
General Data Protection Regulation without explicit consent of the
data subjects).

The irresponsible access and use of data by these digital media
platforms can lead to them enjoying a position of strength or
dominant position in their relevant marketspace. The access and use
of consumer data by such dominant platforms can lead to issues such
foreclosure of market, data acting as a deterrent, predatory
pricing, reduction of output to deflate supply and inflate demand,
harm to consumers due to privacy concerns etc, which stifles a free
and fairly competitive digital market. This is not an isolated
problem, given that even in EU, the European Commission has taken
action against gatekeepers for their irresponsible access and usage
of data. For instance, in the case of Microsoft Corp. v
Commission of the European Communities, it was held that the
practice of Microsoft of not sharing vital data was an abuse of
dominant position and hindered free and fair competition.
Similarly, in India, the Competition Commission of India in the
case of National Restaurant Association of India v. Zomato
India Ltd while assessing allegations of abuse of dominance
provided that not sharing of essential customer data by Zomato
could potentially contravene the Competition Act, 2002 and ordered
an investigation of the same. Evidence suggests that the
Competition Commission of India is quite cautious and vigilant when
dealing with the intersection of competition and data protection
laws, given that the Competition Commission of India has also fined
Meta for abusing its power by implementing the infamous
‘WhatsApp’s 2021 Privacy Policy’ which allowed Meta to
collect and share user data with other Meta companies for purposes
other than providing WhatsApp’s service.

This highlights the stance of the Competition Commission on the
importance and misuse of data, however the assessment of abuse of
dominant position in the digital market space under the current
regulatory framework of the Competition Act, 2002 through
traditional tests poses various challenges such as defining the
relevant market, assessing dominance with various market players
etc. With the publication of the Bill, it seems that proactive
steps are being taken in the right direction to address the issue
with digital markets which have a significant influence in the
Indian digital market economy due to lack of regulations. If and
when the Bill is passed, it will give Competition Commission of
India more power to make effective decisions and regulate the
digital market space which is insanely data driven.

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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.