Volume VI Issue I, 2019
THEME: COMPETITION LAW
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ALGORITHM-FUELLED CONSCIOUS PARALLELISM: POSING MULTIFACETED CHALLENGES TO THE COMPETITION REGIME
In recent times the algorithm has emerged as a new emerging technology that enable computer to take over the task, which were earlier reserved for human beings. Algorithm particularly pricing algorithm have potential to enhance competition landscape in a given market. But, nonetheless algorithm-fuelled conscious parallelism poses multidimensional challenges to the competition regime in form of difficulty in proving plus factors, attributing liability for act of conscious parallelism, distinguishing algorithm fuelled conscious parallelism from oligopolistic interdependence, increased market transparency, over enforcement problems, replacement of explicit collusion with conscious parallelism, etc. To tackle such challenges there is a need for proper market study, changes in competition regime, reviewing ex-ante merger control regulations, ensuring competition compliance by design, auditing pricing algorithm etc. But at the same time it must also be kept in mind that pricing algorithm is still an area of high complexity and uncertainty, so any intervention should be subject to deep assessment and maintain a fine balance between consumer protection, promotion of competition and innovation.
YOUR CELLULAR SUBSCRIPTION HAS BEEN CANCELLED- A CONSPIRACY OF THE TELECOMS
Telecom subscribers across the length and breadth of India have been left dumbfounded for the past few days. The reason for this sudden surprise is not good news this time around. While the customers were anticipating year-end offers by telecoms, they were shocked after receiving texts alerting them of impending cancellation of subscriptions by the country’s top service providers. The notification as read verbatim stated that the customers faced probable discontinuation of outgoing call services provided that a certain minimum amount is not paid within a specified period. People at first shrugged these notifications as hoax and pranks, but after witnessing similar phenomenon across the entirety of the country it became fairly evident that the threat was not hollow. Amid growing fears, the telecom authority directed the telecoms not to terminate subscriptions without proper notice. But this matter as it stands can be summed up as being obscure at best. The current state of affairs has posed serious questions to be answered. What does this mean for the average citizen? What were the circumstances under which such dire steps were taken by the companies? Are they even empowered to pass such a resolution? Is the resolution a mere eyewash and a medium for profiteering by the operators, if so, what are its effects on the market and other competitors? This research paper tries to answer these questions and uncovers the legality of the actions taken by the operators. Reliance has been placed on company disclosures, journals, judicial precedents and legal principles for the purpose of research. The key findings have been extrapolated in analysing the factual matrix and finding a probable solution for the same.
MONOPOLISATION OF CRICKET BROADCASTING IN INDIA: IMPLICATIONS, REGULATION AND LESSONS
Ahkam Khan & Divyansh Prasad
The paper is an attempt to highlight the anti-competitive situation in the Indian sports broadcasting industry and the need for its regulation. With the background of Star India’s monopolisation of the Cricket broadcast market in India, with a huge market share of over 80%, the paper sets out the current factual situation of Indian sports broadcasting industry. The Authors then explain how competition watchdogs in the European Union and the United States of America faced, tackled, and won over similar problems in the past. Going into the ‘what-if’s, the paper provides insights into the implications of the monopolisation of this industry. Imploring the need for regulation, the Authors analyse the two available methods to ensure an efficient broadcasting market and the one that would apply best to this situation. The paper then points out the problems that the competition regulators in the mature jurisdictions have faced while working to ensure an efficient, robust, and competitive sports broadcasting market, while simultaneously calling for the Competition Commission of India’s (hereinafter “CCI”) pro-active involvement in the industry to ensure better competitiveness and to eliminate any practices causing appreciable adverse effects on competition. The Authors conclude by listing the suggestions, both legislative and regulatory, that might help in ensuring a better sports broadcasting industry for all stakeholders.
LITMUS TEST OF COMPETITION LAW: BUYER’S CARTEL
Riddhi Trivedi & Samriddh Binda
‘Competition’ is mostly a progressive word. It is a critical driver of performance and also gives life to innovation. Competition is beneficial to the society as a whole, at the same time, profit making institutions need to acquire market to earn more profit. Competition generally gives a societal benefit, therefore the consumers must also get adequate benefit of fair trading prevalent in the market. The competition law is intended to protect buyers but the legislation has manifestly lacked in interpreting the buyers’ cartel. The previous legislation used to restrict the buyers from entering into such anti- competitive agreements which may eliminate fair competition from the market. However, the Competition Act, 2002 fails to acknowledge the concept of buyer’s cartel.
The authors will emphasise on the ability of buyers’ to form a cartel and how this practice lead to unfair trade practices. The reason to eliminate such agreements is to promote fair competition as there have been instances where such agreements hamper the economic development. Buyers can also enter into an agreement wherein they fix prices beforehand or agree to put such conditions which may jeopardize the rights of the sellers which leads to elimination of competition. The purpose of this article is to show how such agreements can manifestly effect the economic development and must be specifically banned and would be to lay down the intention of the legislation to put an end to such agreements. Further, the authors have considered various instances of Supreme Court, interpreting the Buyers’ Cartel which have been analysed in the article. Lastly, a comparison is made with the laws related to buyers’ cartel from foreign jurisdictions. “A monopsonist buyer who also enjoys monopoly (cartel power) over consumers will sell to consumers at a higher price than a non- monopsonist.”
DIGITALECONOMY: IMPACTONCOMPETITIONLAW IN INDIA
Shramana Dwibedi & Shivam Shukla
Technology and internet facilities have led to a revolutionary change in the sales and marketing arena globally. This paradigm shift has enabled the creation of a digital economy whereby market and its various entities envision an online presence. The objective of this paper is to assess the changing dimensions of the market in the light of a fast changing digital economy where various competitors are vying for a greater online market share. Given the objective, it becomes important to assess whether the Indian legislation, Competition Act, 2002, designed to cater to offline markets is capable of effectively addressing issues in relation to this newly emerging domain of technology enabled markets. The second assessment question shall relate to the impact that these new digitally operating enterprises have on pre-existing offline competitors. The authors shall also delve into analyzing whether the former leads to causation of any barriers to entry in the market. This paper shall give an insight into the recent judicial trend in dealing with abusive conduct alleged against such online enterprises.
THE GST ANTI-PROFITEERING CLAUSE: CURRENT SCENARIO AND WAY FORWARD
Sara Jain & Swapnil Singh
India has witnessed significant changes in its taxation regime- the major transformation being the implementation of the Central Goods and Services Tax Act (CGST), 2017. To reap the benefits arising out of the reduced taxes, an anti-profiteering clause was introduced under Section 171 of the CGST Act, 2017. By virtue of this clause, a system of checks and balances has been imposed on the producers. This ensures that the benefits reach the consumers and the surplus does not lead to extra profits for the suppliers. Further, this aspect leads to an interplay between the GST regime and the Anti-trust law that aims at reducing the prices for consumers. This is because GST is expected to eventually bring down prices, but this would not be possible unless there is a check on the activities of the firms. Most businesses would enjoy unjust enrichment in terms of profit arising out of implementation of GST in India and not pass the benefit to the consumers. Though the anti-profiteering measure has been incorporated with the sacred intention of benefiting a customer and monitoring the inflationary impact of GST, it is likely that this may end into an “inspector raj” and unwarranted inspection of business policies.
The National Anti-Profiteering Authority has not done anything significant to set up any kind of deterrence. Conversely, it is argued that its very presence is inimical to ease of doing business and a potential source of arbitrariness and harassment of companies. In such a scenario, it is best to rely on the mechanisms of the already established Competition Commission.
ONE HOUSE, MULTIPLE FAMILIES: SHOULD ENFORCEMENT OF CONSUMER PROTECTION AND COMPETITION LAWS BE HOUSED TOGETHER?
With the increasing integration of India’s economy with the rest of the world, growth of Indian companies has surpassed expectations. As a result, Indian companies have grown phenomenally and have established dominant positions within India. At the same time, companies based outside of India have entered into India’s burgeoning and profitable consumer market. Thus, Indian regulators must grapple with two concerns: first, ensuring that there is competition in the markets and second, protecting consumers. It is trite that both concerns are essentially about enhancing consumer welfare, albeit via different pathways. Ensuring competition in the markets is a macro-based, supply-side approach to enhancing consumer welfare: an indirect approach. Consumer protection is a micro-based, transaction-focused, demand side approach to enhancing consumer welfare: a direct approach. This paper posits that despite this differential, there are advantages to housing enforcement of competition and consumer protection under the same house. Overall, benefits of such an amalgamation far outweigh the costs. To conclude, this paper submits merely housing these two disciplines is not an adequate strategy, it must be complemented with an educational outreach program. It is critical to ensure that the burden of enforcing consumer protection is shared between the Competition Commission of India and consumers.
ARBITRATION, COMPETITION LAW AND SECOND LOOK DOCTRINE: AN INDIAN PERSPECTIVE
Historically, competition law enforcements agencies have eluded arbitration as a means of adjudicating competition law disputes owing to the technical nature of the disputes and the larger public interest involved. Competition Law deals with the competitiveness in the market and its impact on the consumer welfare. Therefore, the disputes include the adjudication of ‘rights in Rem’ along with the individual claims of the aggrieved parties. Moreover, the Competition Act, 2002 provides for the exclusion of jurisdiction of the Civil Court in any competition related matter. These are the hurdles which restrict the arbitrability of anti-trust disputes in India. In Competition Commission of India v. Union of India, the Delhi High Court stated that the scope of investigation of the Commission is very different from the scope of investigation of the arbitral tribunal due to the lack of expertise of the tribunal. These problems have been faced by the judiciary of most countries while dealing with the arbitrability of competition disputes. Despite these shortcomings, the global acceptance of arbitrators determining competition issues has risen considerably post the Supreme Court of United States affirmation in 1985. The ‘Second look Doctrine’ developed by the Court in Mitsubishi Motor Corp. v. Soler Chrysler Plymouth provided a balance between the need for arbitration and the need for securing public interest. The Doctrine provided for a review of the arbitral award to foresee the proper compliance with the Competition laws of the land. Thereafter, most countries have moved in favour of arbitrating Competition matters and promoting the international consensus of the pro-arbitration culture. There is no conclusive judicial pronouncement of the issue in India and this paper discusses adopting the measures taken by other countries and allowing arbitral tribunals to decide competition disputes along with the assistance from the Competition Commission of India.