Ecommerce companies to face action for any unfair practice: CCI chief

The CCI had on December 17 suspended its nod for Amazon’s deal with Future Group and also imposed a Rs 200 crore fine on the US firm for hiding its intent about the investment. Gupta said he won’t comment on specific cases, but added that rulings are intended to provide regulatory guidance to stakeholders.

‘Non-enforcement Tools Crucial Too’
“The message is clear — that legitimate business practices will not be interfered with, but violation of competition law will be dealt with firmly,” he told ET. “It is expected that enterprises bring their conduct and policies in alignment with competition law and the regulatory guidance provided through orders.”

The concerns and implications of anti-competitive conduct get amplified because of the nature of the digital markets.

“Owing to their innate features, such as network effects and data-driven complementarities, digital markets typically yield high concentration and are often winner-take-all markets,” he said. “The task for CCI, like any other competition authority, is to ensure that these concentrated digital markets remain open to new entrants and that competition on and between the digital platforms is on merits.”

This has become more critical during the pandemic because an increasing proportion of economic activity is being channeled through the digital avenue and a small number of firms have taken key intermediation positions.

New Challenges

“This shift in markets is posing challenges for lawmakers and enforcers as to how to address the consequent bargaining power imbalance and information asymmetry between platforms and their business users,” he said.

Outlining the approach to this issue, he said enforcement has to be complemented with non-enforcement tools such as market studies.

“Non-enforcement tools help in engaging with stakeholders without any regulatory pressure and highlighting to them the potential areas of concerns,” he said, giving the example of a market study on ecommerce that helped the CCI gather useful insights into emerging trends and concerns in the sector.

“Under its advocacy mandate, the commission asked ecommerce platforms to put in place a set of self-regulatory measures over certain areas, such as search ranking, collection, use, sharing of data, user-review mechanism, revision in contract terms, and discount policy,” he said.

On the issue of preferential treatment by some ecommerce players, without reference to specific cases, Gupta said, “The law provides a very robust framework to assess anti-competitive conduct, which enables CCI to examine, inter alia, instances of preferential treatment by platforms possessing market power and issue suitable remedies to address competition concerns in case the infringement is found to be established.”

With regard to new-age markets such as app stores, payments gateways and food aggregators etc., he said: “There has been a steady rise in cases reviewed by CCI emanating from new-age markets, which range from across the verticals, such as search engines, online marketplace platforms, app stores, payment gateways, online travel, food aggregators, cab aggregators, and social networking.”

The commission is currently investigating a wide range of issues, including online platforms giving preferential treatment to a certain set of sellers, he said.

“From the competition law perspective, it is important that they remain neutral in their functioning,” he said. “While some of the cases have been decided by CCI, many of them are either under investigation or at the inquiry stage.”

The text of the proposed confidentiality regime is being drawn up based on feedback from stakeholders. “We should be able to notify the new regime very soon,” he said.