Controlling mergers in digital markets a challenge: CCI chief Ashok Gupta

'Merger reviews in technology markets need to be guided by case-specific economic evidence,' says Ashok Gupta.

Regulators have it tough when assessing mergers in a digital economy as large platforms can possibly collect complementary data to reinforce their market position, said Ashok Gupta, chairman of the Competition Commission of India (CCI), on Friday. 

“Since not all digital markets are alike, nor is all data, interventions in merger reviews in technology markets need to be guided by case-specific economic evidence of competition concerns,” he said at a conference by the Confederation of Indian Industry, calling data a crucial factor for economic power and for judging market power on the internet. 

Since the pandemic, the antitrust regulator has decided 140 merger filings in sectors as diverse as financial markets, pharmaceuticals, healthcare, power and digital markets. 

Gupta said CCI has seen a steady rise in cases emanating from new-age markets, which range from across the verticals, such as search engines, online marketplace platforms, app stores, payment gateways, online travel, food aggregators, cab aggregators and social networking.

“Such cases involving search bias, predatory pricing, deep discounting, self-preferencing and leveraging have a direct interface with competition law regime,” Gupta said.

Gupta has said before that data hegemony by digital companies may lead to an “attention economy”, in which big technology players capture user attention, build profiles of their choices and habits and then sell those profiles to advertisers.

“This will help make timely interventions and strike a fine balance so that efficiency and innovation are not stifled and markets remain free from anti-competitive practices,” Gupta added.

The CCI is in the process of introducing a confidentiality regime to align itself with the best global practices in consultation with stakeholders.

In its proposal, CCI has said that parties seek access to confidential versions of the submissions, filings or director general report by other parties so as to effectively present their cases citing principles of natural justice which the Commission is mandated to observe. “Many such cases result in litigation putting the investigation or inquiry in limbo defeating the very purpose of correcting the markets in a swift manner.”