Competition in Asia in the Algorithmic Era: Implications on Regulators and Consumer Welfare in Malaysia and India

Abstract

Algorithms and Artificial Intelligence (AI) are key to success in the digital economy. The Algorithm supported by AI has transformed the decision-making process and disrupted all aspects of human life. The algorithm-generated marketing benefited Asian businesses plethora but, on the flip, has equally facilitated anti-competitive business practices and undermined their consumer welfare. The algorithms deployed have a far-reaching impact on the consumer markets. The algorithm fosters tacit collusion or abuse of dominance that alters the consumers’ choice and creates search bias favouring the dominant firm or its verticals. Cases reveal algorithm uses AI to collude prices resulting in different consumers being charged different amounts for the same goods or services, besides filtering their choice and causing unfair diversion of search pages in a manner affecting the competitor’s volume of business by either pushing down or pushing out. Meanwhile, the criteria for ranking the “relevant” results cannot be effectively proven. And the ways algorithms form market-based interaction between competitors inter se and consumers, to collude (or use of algorithms to drive out competition) unable to be ruled as the digital feature has posed a major challenge on the competition law application.  The paper examines the legal-policy challenges in Asian shore by reference to India and Malaysian firstly, examining the challenges on the standard of analysis and evidence to prove algorithmic collusion, abuse, and dominance. Secondly, human-related liability or accountability on computers’ behaviour with reference to Grab, Amazon and Google, India. The discussion proposes intervention options with regard to advanced jurisdictions like the European Union to propose improvement.