"Emerging Trends in Competition Law and Digital World" by Abir Roy, Co-Founder, Sarvada Legal
"Emerging Trends in Competition Law and Digital World" by Abir Roy, Co-Founder, Sarvada Legal

One of the biggest challenges faced by competition law regulators around the world is the Competition Law implication in the digital world. The CCI is also grappling with the issues in the digital world, which perhaps, require a novel approach within the broad framework of the law. Keeping this in mind, Sarvada Legal is coming out with weekly trends on competition law and Digital world.

We have released three trends till now which focusses on how Digital world has fundamentally changed the business landscape, network effects et all. Also, we have analyzed the growth of Google and Facebook in realm of digital advertising (search and display advertising, each being a separate market in itself).

We have made the following observations in these trends:- 

  • Competition Law essentially evaluates a firm’s conduct/behaviour in the market. For the Digital world, this branch of law cannot afford to be reactive. Proactive measures must be taken in terms of effective market studies to understand and address alleged behavioural concerns.
  • Owing to the inherent differences in the ways in which markets functions, authorities must constantly re-evaluate enforcement strategies within the text of the law to keep pace with the needs and challenges of the market
  • The evolution of the Digital Economy is increasingly being seen, across jurisdictions, as an area where a deeper understanding is imperative to formulate strategies for future regulations and enforcement. Firms that provide access to the necessary infrastructure for interactions on a platform, and thus act as “gatekeepers” while also acting in a dual capacity as a competitor on the platform raise issues of conflicting interests that require to be evaluated.
  • Traditional notions of pricing with profit driven approaches have been replaced with new business models which focus on growth. Even after having nil or very thin profit margin, such companies continue to function on same model and manage to get huge and multiple rounds of funding from sophisticated investors. The investor outlook has also undergone a drastic change with potential for network being primary concern for investment against profitability.
  • The propensity of the digital world has been winner takes it all, which makes it all the important that the competition authorities take a clarion call to active expeditiously and proactively to ensure that such entities with market power conduct in a fair manner in the market.
  • We have also tried to enlist the growth story of Google and Facebook globally in the realm of search and display advertising, their business model and probable Competition Law implication thereof.
  • We have also mentioned certain novel approaches which the CCI can take into account, keeping the legislative framework in mind.   

We have attached the trends. You can also view our trends on digital market at https://drive.google.com/drive/folders/176sOGer8plE-u2s-oOAcyw2wpg-JFjOI?usp=sharing and our previous write up on latest issues in the Competition Law space at https://drive.google.com/drive/folders/12i58m1oHwnq3otw-_OMZmrbErBB_84qs?usp=sharing