Competition dysfunction : unravelling structural competition problems and reconstructing lost competition in the Indian digital landscape

Abstract

Digital platforms have reshaped global trading conditions, with the majority of business users and end-users gradually shifting towards digital systems and technologies. Consequently, competition laws in various jurisdictions are striving to adapt to developments in digital platform markets. The thesis addresses two such developments.

The first concerns a new facet of market power that, while falling outside the contours of the traditional boundaries of competition law, still affects the competitive process in digital markets. This market power cannot be equated with traditional dominance or classic monopoly but represents a scenario where a platform is statutorily non-dominant yet holds the ability to influence market structure. This market power can be categorized as gatekeeping power, posing a significant challenge for policymakers in regulating this modern form of market influence. The thesis contributes to this discussion both theoretically and empirically within the context of Indian digital markets, addressing two key, interrelated aspects of the debate. The first topic investigated is the concept of a gatekeeper platform and the criteria that may be used to define the threshold for determining one. The second topic identifies and explains that exclusionary conduct by gatekeeper platforms is real, with the potential for future harm if left unaddressed by competition authorities. The discussion considers if presence of any specific market regulation beyond general competition law rules would lead to a more competitive landscape.

The second issue concerns the effectiveness of remedies in instances where digital platforms hold a dominant position, but the efficacy of these remedies is questionable. The thesis critiques the design of remedies available under the ex-post mechanism of the competition policy framework, arguing that they have failed to restore competition. This analysis is crucial because, without effective remedies, merely identifying anti-competitive practices becomes a futile exercise.

The thesis evaluates the role of section 4 of the Competition Act, 2002, in the two above mentioned situations and seeks to devise remedies that can suitably address digital market infringements. To determine the suitability of these remedies, the thesis employs a scenario-based analysis which demonstrates the impact of adopting and implementing alternative remedies on the market structure. This analysis is conducted within the institutional context of India, utilizing cost-benefit analysis to help craft remedies tailored to the unique economic and institutional conditions of the Indian economy. The findings suggest that remedies designed in line with the developmental conditions of the economy will enhance the contestability of digital markets. This is particularly important given that India is regarded as a start-up powerhouse with significant potential to produce local alternatives to large, big-tech companies.