Competition: Platforms

The platform economy has become a significant focus of competition law in India, given the growing influence of digital platforms in various markets. This has led to increased scrutiny by the Competition Commission of India (CCI). The CCI’s proactive approach, coupled with evolving policy frameworks, aims to create a balanced and competitive digital marketplace in India. The Indian government released a draft e-commerce policy in 2019 aimed at addressing competition issues in the digital economy. The Consumer Protection (E-Commerce) Rules (2020) were also introduced to protect consumer interests in the e-commerce space. The CCI conducted a market study on the e-commerce sector in 2020, which provided insights into competition issues such as platform neutrality, deep discounting, and search rankings.  

The CCI’s investigation has uncovered that both Apple (a prima facie opinion) and Google are utilizing anti-steering provisions, mandating app developers to exclusively use their own payment systems. Furthermore, they impose significant revenue commissions on developers for utilizing these systems. The Commission is of the view that the presence of the anti-steering clause restricts the choices for app developers. In the Case No. 39/2020, CCI found that Google ties or bundles specific apps and services (such as Google Chrome, YouTube, and Google Search) on Android devices in India with other Google applications, services, and/or application programming interfaces like Google Play Store. Google’s bundling strategy is seen as reinforcing its dominance across markets and impacting the competitiveness and vibrancy of markets, such as search, web browsing, and online advertising. The Commission directed Google to implement the remedies (as stated in its order) to prevent competition harm. 

In the case of XYZ v Alphabet Inc and Others, it was observed by CCI that Google possesses extensive and detailed data about app users, including comprehensive personal and financial transaction information. With access to this financial transaction data, Google has the ability to distort competition in downstream markets. The investigation also revealed that Google not only has the capacity but also the motivation to utilize this data to target premium users with its own products. It was observed that the adverse effects on competition are twofold: first, it puts rival apps at a disadvantage by providing Google with customer data that enables it to outcompete them, and second, it solidifies Google’s position in the online target advertisement sector.  

In this case, the Commission also observed that Google’s payment policy mandates app developers offering paid apps or in-app purchases (IAPs) to use Google Play Billing System (GPBS). Due to this mandatory requirement, app developers are restricted from utilizing their preferred payment processing system for handling app purchases and in-app transactions of digital products. This compulsory imposition of GPBS closes off opportunities for other payment processing service providers to cater to app developers handling payments for paid apps and IAPs. Additionally, it disincentivizes app developers from creating their own in-app payment processor.  

In another case, MMT-Go was accused of providing substantial discounts on hotel rooms, offering prices that hotels themselves find impossible to match. While recognizing that deep discounts are commonly employed in platform markets to create network effects, the Commission highlighted that, in the case of MMT-Go, which has held a dominant position since 2000, the practice might not be introductory and could be aimed at purposes beyond network establishment. The Commission also found that MMT-Go and OYO had entered into exclusive arrangements, resulting in market foreclosure and denial of market access to FabHotels, Treebo, and independent budget hotels. This agreement had the potential to favour OYO in the downstream market for franchisee budget hotels, posing a threat to fair competition.  

According to the report of the Parliamentary Standing Committee on the anti-competitive practices (ACPs) of Big Tech, the Government of India examine the need for an ex-ante regulatory architecture in the context of systemically important digital intermediaries that may address some of the anti-competitive issues. The Digital Markets Report 2024, highlighted the growing influence of digital platforms and the need for a robust regulatory framework to address competition concerns. The report constituted a Committee on Digital Competition Law (CDCL) to deliberate on this manner and it includes a draft Digital Competition Bill that proposes obligations for significant enterprises providing specific Core Digital Services.