There is a need for India to revisit the desirability of uniform threshold for the merger review control regime in the country to achieve the intended goals across the sectors including the digital, Competition Commission of India (CCI) chairman, Mr Devender Kumar Sikri said.
Referring to the mergers between companies holding big data which may result in profiling of individuals thereby invading their privacy in the digital space, Mr Sikri said, “Since data is not accounted as an asset, the traditional asset turnover criteria which we apply in Competition Law may fail to capture potentially those transactions from the competition review, that is our worry.”
“We must have sector-wise threshold, I think the time has come and the digital sectors need to be really abreast of that,” said Mr Sikri while inaugurating an ‘ASSOCHAM National Conference on Data Protection, Privacy and Security.’
He also said that targets in these sectors (digital companies) have a limited actual turnover or physical assets thus the asset turnover based notification threshold which has been enforced today in the country might have a blind spot in the digital sector.
“If relied-on solely, we will not be able to take stock and evaluate them in the merger review,” added the CCI chairman.
Highlighting the need to strike a balance to embrace the social benefits of the big data while avoiding harms to the individual, Mr Sikri said, “Transparency, accountability and informed consent are going to be the keywords.”
Noting that a data protection law and data protection authority will provide necessary regulatory architecture, he said that while CCI would be addressing the competition issues that may fall within its purview but what is more important is that the regulations and regulators will have to work in tandem as there could be potential abuse of dominance cases which might also involve breach of data protection issues.
“There should be then, appropriate remedies which address both anti-competitive practices and the data. The authorities responsible for data governance in the digital economy will have to have a continuous dialogue to ensure that a cohesive regulatory architecture is in place which promotes efficient digital markets,” said Mr Sikri.
In this quest, he added that industry will have a significant role to play. “You are both providers and consumers of digital services so your inputs and efforts will be crucial in making the regulations work.”
Highlighting that in the present scenario people in many ways are not only using but are also becoming dependent on the data driven digital economy and innovative services it delivers, the CCI chief said that rapidly evolving data landscape and more and more data centric businesses are posing colossal challenge.
“They are altering the traditional parameters of regulation. They are making the regulators develop innovative perspective on how to apply the existing instruments and devise new tools wherever necessary,” he said.
He however said that CCI as the competition authority understands that data companies are not an economic threat in themselves, they are a source of innovation and so must be encouraged for economic development. “But the practices of the dominant digital players need to be competition compliant.”
He also said that collusion between digital players through self-learning algorithms is one of the biggest challenges that the Competition Law enforcers are facing.
“Algorithms are not systems that are moving on their own, somebody has designed them and there is some logic put into that,” said Mr Sikri while citing an example of an airline whose ticket prices shot up to Rs 60,000-Rs 90,000 for a Chandigarh-Delhi flight.
“When we asked the airline they said, we do not know the algorithms are driving it up,” he said. “But we are not going to give it up, though they are still saying that we have these indicators, we have these variables but they are not giving the weightage given to them.”
He informed that the competition watchdog was in talks of many technical people to understand algorithms. “We have been even suggested by the IITian Professors whom we interacted with that you develop your own algorithms to unravel this one but this is not going to be easy.”
Terming it as the biggest challenge and the latest frontier of Competition Law, he said it is the cutting edge where laws for most parts are genuinely struggling to keep pace with the developments in technology.
“Regulators have not yet much idea, I must confess what has to be done to make human centric anti-trust laws apply effectively to the bot intermediated transactions and that connect is a real challenge,” said Mr Sikri.
While several theories of harm regarding data ownership and abuse are building up, on the empirical front, the researches are all at a very early stage, this is therefore a biggest dilemma that is facing the anti-trust authority worldwide including India.
“But instrumentally, I believe a firm legal framework for data protection is the foundation on which data driven innovation and entrepreneurship can flourish while also keeping personal data of citizens secured and protected,” said the CCI chairman suggesting that personal data which is collected, used, shared or stored should be governed by a separate regulatory framework.
In his address at the ASSOCHAM conference, Union Law Secretary, Mr Suresh Chandra said that by creating a good data protection law, India could extend well beyond being a mere supplier to the world’s multi-national corporations.