The CCI will create a digital market unit to assess the behavior of big technologies

The Competition Commission of India (CCI) will set up a Digital Market Unit (DMU) to better understand and assess the behavior of e-commerce platforms and other companies in the digital economy so that any anti-competitive behavior by companies in the the new era is not going unnoticed by the regulatory framework, senior officials said on Saturday.

ICC Chairman Ashok Kumar Gupta said: “Given the increasing number of cases and the complexity of the digital sector and the growing need for data and technology skills, we now plan to establish a dedicated unit to digital markets within ICC as a center of expertise for digital markets.” Kumar was speaking at the National Conference on Competition Law organized by ICC and Ministry of Commercial Affairs as part of the commemoration of 75 years of independence.

The government is currently working on amendments to the competition law, which are expected to be tabled during the monsoon session of parliament. These amendments should update the law to better regulate businesses in the digital economy.

As with countries, the emergence of digital markets has raised new competition issues and new concerns for India as well, said ICC member Sangeeta Verma, who was also present at the occasion.

“These are new in our understanding and in our assessment frameworks. The scale of transactions and transparency issues associated with digital markets add to the complexity. But our advantage is that our Competition Act is quite flexible. It enables the examination of most behaviors likely to pose a competition problem… We are strengthening the capacities of the Commission thanks to our case experience, market studies and a proposal to create a unit dedicated to digital marketplace, training programs and in-depth dialogues with competition regulators in other countries,” said Verma.

Ashok Kumar Gupta said the average time taken by the regulator for M&A clearing is only 17 working days. In more than 900 transactions reviewed by the TCC so far, remedies – changes to the transaction to ensure that the combined entity does not harm competition in the marketplace – have only been ordered in 22 cases, or 2% of the total cases. These are the cases where the investigation has shown harm to competition, he said.

“We strongly believe that our balanced approach to regulation has resulted in a market-friendly regulatory system that quickly facilitates synergistic transactions and combinations that alone have anti-competitive potential are subject to detailed scrutiny,” Kumar said.

Gupta also said about a quarter of all M&A approval requests are in fast-track mode, or green channel, under which the regulator gives quick approvals. Increasingly, CCI will conduct more market research to better understand market structures and competition dynamics in critical sectors, Gupta said.

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