Winners take all

Indian regulators must deal with network externalities

As India’s economy modernises, the tasks facing the country’s regulators become ever more complex. More and more sectors are exhibiting a “winners take all” structure. In “normal” competitive markets, regulators have a straightforward set of objectives and tools. They intervene to make sure there is no cartelisation, that anti-competitive practices are not being used, and so on. Generally, the assumption in this case is that left to itself the market will take care of consumer welfare, and the regulator’s job is merely to ensure that no participant is seeking to distort the functioning of the market.

However, in the modern