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TACKLING BIG DATA IN THE INDIAN MARKETS

[Authored by Divyamaan Singh Rathore, 2nd year B.A LL.B (Hons.) at CHRIST (Deemed to be University), Bengaluru]


Introduction


The United States House of Representatives published a 449-page report in October 2020, a

report which was the culmination of a 16 month long investigation into testimonies and evidences given to the committee regarding the business practices of the big tech companies, namely, Google, Amazon, Facebook and Apple. The premise of the investigation was based on the use of data that is collected by these companies, also known as “Big Data” to engage in anti-competitive trade practices. The report states that the big tech has been constantly manipulating businesses and hampering innovation and competition in the market. [1] The big tech or GAFA serve as the gatekeepers of the digital markets and economy. These four have been known to charge exorbitant fees, impose oppressive contractual terms and extract important data from the businesses and individuals that rely on them. Secondly, these companies have used data that it collects to keep a check on potential startups and companies that may challenge their authority in the market. They have been known to acquire these companies in order to restrict entry and exit of firms in the market and disrupting the free market economy.[2] Not just in the United States but also in the European Union antitrust proceedings against Google have shown that it has abused its dominant position by imposing illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general Internet search, demonstrated that exclusionary conduct in data-driven markets is a reality.[3] Whether through self-preferencing, predatory pricing, or exclusionary conduct, the dominant platforms have exploited their power in order to become even more dominant.[4]


Decoding Antitrust Issues in the US


It has been noted by the committee that in the current scenario Google is omnipresent through the digital economy, providing the infrastructure for goods and services online. It has grown and maintained its search engine dominance The company is now also the largest provider of digital advertising, a leading web browser, a dominant mobile operating system, and a major provider of digital mapping, email, cloud computing, and voice assistant services, alongside dozens of other offerings. Nine of Google’s products—Android, Chrome, Gmail, Google Search, Google Drive, Google Maps, Google Photos, Google Play Store, and YouTube—have more than a billion users. Each of these services provides Google with a trove of user data, reinforcing its dominance across markets and driving greater monetization through online ads.


Google uses its search platform to store search results preferences and other data which helps them in employing ads and other suggestions throughout the search engine. These ads combined with the oppressive contractual obligations of Google with manufacturers of operating software such as Apple to provide Google as the default search engine extends its dominant position in the market


Evidence shows that once Google built out its vertical offerings, it introduced various changes that had the effect of privileging Google’s own inferior services while demoting competitors’ offerings. This conduct has undermined the vertical search providers that Google viewed as a threat. It has also boosted Google’s ad revenue by keeping users on Google’s domains for longer and by compelling demoted firms to pay Google more ad fees to reach users


Facebook uses data as a commodity, in order to break the dominance of Facebook, data needs to be protected as a service that is protected. Also the acquisition activities of Facebook and Apple have been under the scanner, it has been noted that Facebook and Apple have used their tremendous economic resources to buy off potential competitors and using selective discrimination while deploying ads and charged exorbitant prices to businesses to enlist the services of the above two companies and restricted the entry of new firms in the market and established a monopoly.


Amazon on the other hand has launched brands such as Amazon Basics, Kindle etc to undermine the prices of competitors and used the market share it has in online shopping and markets to promote their own products. Amazon also uses selecting sellers on its own discretions, offers are listed however the default offer of sale is selected by Amazon and leads to exclusionary conduct.


Big Data Under the Indian Competition Regime


Reliance Jio, the saw investments from two of the big tech companies, i.e, Facebook and Google. The tech giants acquired 9.90% and 7.7% stake in the Indian conglomerate. This exposes the Indian competition regime to the questions of data control and accumulation. These deals not only highlight the involvement of big tech in the Indian business environment, but also accentuate the potential threat of Reliance Jio becoming a monopolist dominating vast expanses of the market.


The antitrust body in India, known as the Competition Commission of India (CCI) took Suo

Moto cognizance of the positions of Facebook, Google and Amazon and ordered an inquiry into the activities of the company. Tackling the activities of the big tech was initiated by the CCI through the case of Umar Javed v. Google LLC in which, the CCI established the market for Iphones as a separate market. This development shows a progressive behavior of the Indian antitrust watchdog towards emerging digital marketplaces. [5]


The Competition Act 2002, lays down several requirements before classifying a an activity as

violative of the act, Section 19 of the Act empowers the commission to investigate irregularities under section 3 and 4 of the Competition Act. In retrospect, the Jio-Google and Jio-Facebook deals open up avenues for predatory pricing. Furthermore, Section 19(3) talks about the factors pertaining to the anti-competitive agreements such as the creation of barriers or foreclosure of the competition by hindering market entry. Evidently, a market can be foreclosed for the competitors if the parties to the agreement hold substantial market power. In the category of decisions by the various antitrust regulators worldwide, it has been stated that market power also contains “big data”. Thus the assessment of these factors must be in accordance with the facts and circumstances of the case.[6]


Moreover, in order to check the possibility of an appreciable adverse effect on the competition (AAEC), the CCI considers the existence of vertical agreements or horizontal agreements between the enterprises. However, enterprises which are not related horizontally and vertically and are in possession of ‘big data’ can give rise to anti-competitive practices by causing AAEC in the market.[7]


Notably the CCI has failed to identify data capitalisation tech companies and using it in business strategies. In 2017, Bharti Airtel Limited had accused Reliance Jio of engaging in predatory pricing by providing certain services for free, however, the CCI closed the matter by stating that providing free services cannot by itself raise competition concerns. Even though, the earnest efforts of CCI to keep up with the advancing pace of the markets have been slow and steady, they may not be enough. The CCI needs to increase its scope while governing the use of data which can lead to anti-competitive practices in the market.


The Competition Law Review Committee (‘CLRC’) Report recognises the evolving sphere of

big data and competition law and has stated that the ability of big tech companies to process such data and calibrate business strategies can lead to destabilising effects in the markets where such data is not uniformly available to all players.


Conclusion


The emergence of big data as a business component poses some serious issues for antitrust

watchdogs all over the globe. The remedies to combat this influx of business practices in the

market are numerous, however it has to be noted that there is a case against all of the remedies provided. One of the remedies that have been presented is data sharing as a remedy, however data sharing undermines privacy of the consumer as more of its data is out in the open. On the legislative front, a comprehensive personal data protection mechanism, such as the one in consideration in India would be viable. Although it is possible for companies to bypass the legislation, it still works as a firewall. Sections 4,5 and 6 of the Personal Data Protection Bill, 2019 [9] provide a mechanism for consumers to protect their data but does not make binding rules for companies to not collect data.


In light of these considerations, it is feasible to say that a committee of data protection experts and competition law experts could give a more comprehensive view as to how both the legislative facets can be combined to protect small Indian businesses from the big tech

companies and ensure level competition in the Indian markets.

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