CONSIDERING DATA AS A PARAMETER FOR ESTABLISHING DOMINANCE UNDER THE COMPETITION ACT, 2002: LESSONS FROM THE EU AND THE US

Abstract

The advent of the digital age from 1995 onward, when internet first became open for the public at large, heralded an era of novel enterprises that were hitherto unheard of. It ushered in unique business models that catered to consumers in the farthest reaches of the planet. Over the last three decades, digitalization has transformed many sectors of our economies and forced a re-think of what “dominance”, “consumer harm” and other established principles of competition law mean. Datasets and algorithms are among the most important technological drivers of this change as they enable firms to be more innovative and efficient. 

In its investigation on digital markets, the US’s Subcommittee on Antitrust, Commercial and Administrative Law Report highlighted how the accumulation of data can serve as a powerful barrier to entry for firms and exacerbate anticompetitive conduct in digital markets. Persistent data collection can potentially create information asymmetries and grant enterprises access to non-public information, giving them a significant competitive edge. Having such a significant data advantage also enables dominant platforms to identify and acquire rivals early in their lifecycle, thus enabling killer acquisitions. Despite the numerous threats to competition posed by companies gambling in big data, the Competition Commission of India does not consider data while assessing dominance. 

At present, under Indian competition law, the relevant considerations that the CCI must consider when analyzing a particular enterprise's dominance in the relevant market are enumerated within S. 19(4) of the Competition Act of 2002 (“Act”). The elements include the enterprise's market share, size and resources, the size and importance of competitors, the enterprise’s economic power including any commercial advantages over competitors, its vertical integration or sale or service network of such enterprises, the dependence of consumers on the enterprise and so on. According to the Act, a dominant position is held by one or more business undertakings or an association of business undertakings that hold an exclusive right or other dominant position in a specified product market so as to significantly control the price level or terms of delivery of that product, or who, in some other corresponding manner, influence the competitive conditions on a given level of production.