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CCI Chairman Ashok Kumar Gupta: Digital markets lately have become ‘centres for unchecked dominance’

The Competition Commission of India (CCI) is currently investigating allegations of anti-competitive conduct by online platforms including Amazon, Flipkart and MakeMyTrip.

By: ENS Economic Bureau | New Delhi |
Updated: August 11, 2021 10:26:43 am
CCI Chairman Ashok Kumar Gupta (Twitter/CCI_India)

Digital marketplaces have become “centres for entrenched and unchecked dominance,” the chairperson of the competition regulator said on Thursday, noting that unfair “platform-to-business rules” and unequal bargaining power between digital platforms and businesses could result in exploitation.

The Competition Commission of India (CCI) is currently investigating allegations of anti-competitive conduct by online platforms including Amazon, Flipkart and MakeMyTrip. Google is currently facing three separate CCI investigations into its conduct in the Smart TV, mobile operating system and online payment platforms spaces.

“While there is no doubt that digital markets are the epicentres of technological progress in innovation, lately they have become centres for entrenched and unchecked dominance,” said CCI Chairman Ashok Kumar Gupta at a virtual event organised by the Center for the Digital Future (CDF).

Gupta noted that digital markets in India were rife with single players or duopolies commanding a significant market share.

“The relationship of multiple actors in the ecosystem with these (online) platforms has been increasingly raising competition concerns. Situations can arise where dominant firms in the market are in a position to extract large rents, or even oust their trading partners,” he said, adding that competition had to be increasingly mindful of unequal bargaining power between business and platforms.

The National Restaurant Association of India (NRAI) recently filed information with the CCI claiming that online food delivery platforms Swiggy and Zomato are charging exorbitant commissions to restaurants and are using customer data to promote their own cloud kitchens.

Gupta also said that a recent e-commerce market study by CCI concluded that in cases where online platforms serve as both the marketplace and a competitor, they have an “incentive to leverage the control or the platform in favour of their preferred vendors of private label products to the disadvantage of other sellers or service providers with the platform.”

The CCI had earlier this year ordered a probe into Flipkart and Amazon over allegations of preferential treatment to certain sellers on their platforms through preferred listings and through the platforms agreeing to bear the cost of discounts from certain sellers during key sales periods.

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