Competition Commission of India (CCI) Chairman Ravneet Kaur said on Monday at the regulator's annual gala that digital platforms' control over large datasets creates barriers to new entry and undermines platform neutrality. He said this could lead to algorithmic collusion. India's Attorney General R. Venkataramani also stressed in a special address that an e-commerce platform's monopoly over user data “could be subject to scrutiny” and the new government could include e-commerce policy on its 100-day policy agenda. said.
Speaking at CCI's 15th annual gala, Kaul highlighted the trend of digital markets towards market concentration, stating that “many digital platforms benefit from network effects, where the more users participate, the more valuable their services become. I am receiving the same.” “This could quickly lead to a winner-take-all scenario where one or two companies dominate the market in the digital economy,” Kaul said. Kaul said he identified three major problems that could arise from the control of large data sets by digital platforms: barriers to entry, platform neutrality issues, and algorithmic collusion. “Data is a critical resource. Companies that can collect, analyze, and leverage vast amounts of data can gain a significant competitive advantage. “It raises concerns about data dominance, which can create barriers that are not present.”
“Many digital markets…are characterized by database business models in which a single entity controls access to a wide range of services. “This raises the question of neutrality. There are growing concerns that platforms may favor their own services and products,” Kaur said.
“Algorithms play an important role in digital markets, from shaping the user experience to determining pricing and product placement. However, their opacity makes it difficult to assess their impact on competitive issues. may be difficult. [For example] “Algorithmic collusion, the potential for algorithms to implicitly adjust prices and market strategies without explicit human guidance, poses new challenges for us,” she added.
In his special guest of honor address, Mr. Venkataramani cited consumer electronics and jewelry retailers, agricultural equipment distributors, and the packaging industry as “examples of distribution channels that have a strong influence on end customers.” “E-commerce platforms and their monopolies are another example. [An e-commerce platform] Controlling and exploiting user trends, assiduously created by these giants, may be subject to scrutiny, making e-commerce policy a fitting part of the agenda for governments to address over the next 100 days. There is also,” Venkataramani said. .
India's draft National E-Commerce Policy was shared for public consultation by the Department for Promotion of Industry and Intratrade (DPIIT) in 2019, but the final policy is yet to be announced. The draft policy initially sought to provide stricter consumer protection against unsolicited phone calls and emails. It also called for enforcing data localization rules that would limit cross-border data flows and giving governments the power to require companies to disclose their source code and algorithms.
Since the release of the first draft, DPIIT has held numerous stakeholder meetings to discuss the proposal and clarify questions about the policy. However, an updated draft has not yet been released. “While this policy has been long awaited by the industry, consumers and other stakeholders, it is noteworthy that the final draft of the e-commerce policy was published four years ago, before the pandemic. The current draft version of the policy has not been shared with the general public, including industry,” Indo-American Chamber of Commerce (IACC) national president Lalit Bhasin said in September last year.
“Indeed, reports also point out that final consultations on the e-commerce policy took place between government officials and industry players and trade associations. However, in the absence of a draft, industry and stakeholders have no idea what provisions the proposed policy seeks to introduce to unlock growth in this important sunrise sector. may be difficult to comment on as well,” Bhasin said in a press release.
During the event, Kaul also said that CCI is working on market research on artificial intelligence (AI). “Although the transformative capabilities of AI have great potential to foster competition, there are also competitive concerns that arise from the use of AI. It will be a knowledge-building exercise to deeply understand the impact of AI applications on competition, efficiency and innovation in the industry,” she said.
© Indian Express Private Limited
Originally uploaded to: May 21, 2024, 04:22 IST
