‘E-commerce, digital economy pose a challenge’

Emerging business models around digital economy and e-commerce do pose a challenge and need to be understood comprehensively, said Sudhir Mital, Chairman, Competition Commission of India.

Speaking to BusinessLine on Friday, his last day in office, Mital said, “The issue is that the competition law, as it is, presently talks of assets and turnovers. But for the entire digital economy and e-commerce ecosystem, in terms of assets there may be nothing. But the turnovers are pretty high.”

Even though you are technology-agnostic, there are certain areas that need to be looked at, he added.

Mital joined the competition watchdog in April 2014 as a member and became the Chairman in July 2018 when DK Sikri retired.

To get a better understanding on new-age areas such as digital economy and e-commerce, the commission is undertaking market surveys. “These were started only 3-4 months back,” Mital said. The objective of the surveys is to get comprehensive understanding of how certain new markets such as algorithms and digital platform work.

In addition, the research team of the commission is constantly looking at how the markets are working and if we need to investigate, Mital said. But unlike its EU or Japanese counterparts that have ordered investigation into the abuse of dominance by tech giants such as Facebook, CCI has not taken any action so far.

“Like I said, we are taking a nuanced and balanced approach. This is not an easy matter,” Mital said. He explained that any action will have implications for the company like loss of reputation and value.

But he agrees that Walmart’s takeover of Flipkart has been one of the most challenging cases under his term as the Chairman. “Walmart’s move created a huge cry. What the commission had to look at was that whether the proposed combination will change the landscape and the deal did not. So the CCI approved the combination.” But growing challenges aside, according to Mital, the commission has grown in terms of understanding new issues since he joined in 2014.

“The commission has done extremely well in combinations,” he said. The CCI amended its Combination Regulation recently to simplify the process by shortening time for approvals and becoming more stakeholder-friendly.

The regulator also amended its leniency regulation to keep a tight rein on bid-rigging. The amended regulation allows individuals apart from companies to come forward to file a case with CCI on cartelisation.

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