By Parumita Pal and Hrishav Kumar*
The switch from traditional brick-and-mortar business models to rapidly a evolving digital mode of doing business has impacted the way the Competition Commission of India (“CCI”) has been looking at cases involving data privacy and protection issues. The decisions by the CCI in the past few years indicate how the CCI has been slowly acclimatizing itself to these changing markets. Particularly with regard to competition cases involving WhatsApp as a party, the paradigm shift in the CCI’s decisional practice is evident.
Can the CCI Regulate Data Sharing and Privacy Concerns?
Interestingly, in August 2020, the CCI noted that Facebook and WhatsApp undeniably deal with sensitive data which is amenable to misuse (i.e., through targeted advertisement) and may raise potential antitrust concerns, among other data protection issues. However, in absence of any concrete accusation or specific information, the case against WhatsApp was dismissed with respect to the allegation of misuse of consumer data.2
In June3 and November4 2020, while analyzing two combinations involving prominent players, the CCI noted that business combinations between entities having access to user data can be analyzed from the perspective of data-backed market power. Be that as it may, both combinations were approved by the CCI with a caveat that any anticompetitive conduct resulting from data sharing could be taken up under enforcement provisions (i.e., Section 3 and Section 4) of the Competition Act, 2002 (“Competition Act”).
Notably, the CCI in its E-commerce Report and Telecom Report had highlighted some data related issues that may raise competition concerns. The Market Study on E-commerce in India (“E-commerce report”) observed the intermediary role of the platform which allows it to collect and leverage competitively relevant data to enhance the quality of their platform and either introduce their own private label or boost its ‘preferred seller’.5
Is the CCI Stepping Beyond Its Jurisdiction?
Interestingly, in its Market Study on the Telecom Sector in India (“Telecom Report”) the CCI observed that while overlapping jurisdictions between institutions cannot be eliminated, they ought to be harmonized through better regulatory design and improved lines of communication.7
The legislature had foreseen such issues and included inbuilt safeguards to deal with such issues. While Section 60 of the Competition Act contains a non-obstante clause and expressly provides that the provisions of the Competition Act will have effect notwithstanding anything inconsistent contained in any other law, Section 62 expressly provides that. The Competition Act would be in addition to and not in derogation of the provisions of any other law.
Presently, the matter is pendente lite in the DHC and awaits consideration by the division bench. Needless to say, the case would leave behind a historic precedent for similar disputes on the subject.
Global Trends: Antitrust Wave Against the Big Techs?
‘Data’ is the new ‘profit’ and the global trends indicate that the antitrust regulators worldwide are well aware of it. In Europe, the European Commission (“EC”) has proposed two legislative proposals: The Digital Services Act (“DSA”) and the Digital Markets Act (“DMA”), as part of the European Digital Strategy. While the DMA governs gatekeeper online platforms and targets lack of competition in the digital market, the DSA governs online intermediaries and is essentially concerned with transparency and consumer protection.9 Meanwhile, in the United States, the House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law released an investigation report on competition on digital markets. The report is the result of 16 months investigation launched against the Big 4 tech giants- Google, Apple, Facebook, and Amazon.10
* Parumita Pal is an Advocate and also a part of the Competition Law practice at a leading law firm in Delhi. Hrishav Kumar is the Co-Founder of Caim Consulting. Caim Consulting is a non-profit initiative pioneered with an aim to deliver cost free legal assistance to start-ups, innovations and businesses, especially those in their incubatory phases.
1 Vinod Kumar Gupta v. WhatsApp Inc., Case No. 99 of 2016.
2 Harshita Chawla v. WhatsApp Inc & Facebook Inc., Case No. 15 of 2020.
3 Combination Registration No. C-2020/06/747.
4 Combination Registration No. C-2020/09/775
5 Market Study on E-commerce in India, Competition Commission of India (January 8, 2020).
7 Market Study on the Telecom Sector in India, Competition Commission of India (January 22, 2021).
8 WhatsApp LLC v. Competition Commission of India, W.P.(C) 4378/2021 & CM 13336/2021.
9 Aline Blankertz and Julian Jaursch, What the European DSA and DMA proposals mean for online platforms, Brookings (January 14, 2021), https://www.brookings.edu/techstream/what-the-european-dsa-and-dma-proposals-mean-for-online-platforms/.
10 Investigation of Competition in Digital Markets, Subcommittee on Antitrust, Commercial, and Administrative Law (October 4, 2020).
12 The Federal Court of Justice provisionally confirms the allegation of abuse of a dominant market position by Facebook, Federal Court of Justice (june 23, 2020), https://www.bundesgerichtshof.de/SharedDocs/Pressemitteilungen/DE/2020/2020080.html.
13 Higher Regional Court Düsseldorf, Kart 2/19 (V), (March 24, 2021), https://www.justiz.nrw.de/nrwe/olgs/duesseldorf/j2021/Kart_2_19_V_Beschluss_20210324.html.