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Antitrust subcommittee hearing: Lessons for India

Anand Sree

[The said contribution is part of the series on “US Congressional Antitrust Hearing” run by the Centre for Competition Law and Economics]


The dominant theme of the House Judiciary Antitrust Subcommittee hearings revolved around whether digital economy companies have excessive market power. Digital economy companies wield enormous influence over our day to day life. It influences what we buy, what we eat, what we read and also how we spend our free time. Perhaps, this enormous control over our personal data, more than any competitive harm itself, is what prompted the antitrust subcommittee hearing against Amazon, Apple and Facebook. It is scary because it is probably the first time the world has witnessed such concentration of market power as well as personal data with the same companies.

Google, on the other hand, may witness antitrust proceedings initiated against it in the US as well, because the allegations seem similar to the proceedings recently concluded in the EU and India i.e., abusing dominant position in the internet search market to foreclose rivals in the digital -advertising space.

However, the wielding of monopoly market power alone should not be a cause of concern for competition law regulators. Theoretically, competition law policy is not opposed to the creation of monopolies through fair competition. In fact, the incentive of being a monopoly can possibly be a key driver for innovation in markets. Competition regulators should only interfere if monopoly market power is achieved or maintained through unfair competition.

Regardless of whether the hearings will translate into antitrust proceedings against the incumbent digital economy companies or not, the hearings have primarily exposed the inadequacy of the existing competition law and enforcement regime to deal with competition law issues in the digital economy. Specifically, the merger control regime needs to move away from its industrial age roots. Competition law regulators should also be cognisant of the fact that they were also slow to react to the concentration of market power in digital markets, so that lessons for the future may be learnt.

The emergence of the digital economy companies have also exposed the inadequacy of the industrial age competition law policy. The digital economy does not operate like the industrial economy. More often than not, they do not exceed the traditional asset/turnover thresholds which require prior notification to competition law regulators. In retrospect, it is inconceivable that major acquisitions in the digital economy market like Google’s acquisition of Youtube, Facebook’s acquisition of Instagram, Whatsapp etc. escaped prior scrutiny by competition law regulators in most of the major jurisdictions. Although the deal value threshold has been touted as a remedy, a more appropriate remedy will be to move towards a market share based threshold for pre-merger notifications particularly for digital economy combinations.

Further, it is the need of the hour that major economies develop their unique competition law policies for the digital economy based on the market conditions peculiar to their jurisdictions. Jurisdictions like the European Union have taken the lead to evolve their competition law policies for the digital era. The House Judiciary Antitrust Subcommittee hearings may also ultimately result in the adjustment of the existing antitrust legal and enforcement regime to meet the unique challenges of the digital economy in the United States. While, in India, it is hoped that the Competition Law (Amendment) Bill, 2020 (Bill) may equip the CCI with the tools to meet the challenges in the digital economy, the fact that no investigation/study into the digital economy preceded the amendments proposed in the Bill will test the efficacy of the amendments to deal with the competition law challenges in the digital economy.

[Mr. Anand Sree is a Senior Associate with Vaish Associates. The submission has been made in his personal capacity]