This policy brief provides a comprehensive analysis of competition issues in digital markets, elucidating their distinctive characteristics and implications on market dynamics. Recent orders, both final and prima facie, of the Competition Commission of India (CCI), have found digital companies to be indulging in unfair market practices related to tying, bundling, self-preferencing, data usage, anti-steering provisions, deep discounting, exclusive tie-ups, advertising policies, and restriction of third party applications; leveraging their dominant positions; and creating ecosystems and walled gardens to the detriment of competition and, consequently, consumer welfare. Key areas of concern highlighted by the CCI include exploitative business practices, unequal bargaining power, and exclusionary behaviours towards competitors. Drawing from the 53rd Report of the Parliamentary Standing Committee on Finance, specific anti-competitive practices are identified, along with the theoretical framework of competition harm underpinning these practices and proposed remedies. The policy brief concludes with pertinent questions related to the growing demand for regulating competition in digital markets and proposes further consultation to formulate regulatory strategies that are India-specific rather than just borrowing from international proposals.
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