Judging a Book by Its Cover?: Analysing the Indian Approach to Defining Platform Markets
44 Pages Posted: 17 Mar 2021
Date Written: February 8, 2021
One of the challenges before competition law today is to develop criteria for market definition in platform markets. This is because the old tests for market definition do not neatly apply to platform markets, given that these markets have certain peculiarities. For instance, should platform markets be defined as one or separate markets on each side of the platform? As platforms are of different types, it is difficult to develop rules that can account for the diversity of various platforms. Platforms markets are also dynamic and our understanding of them is evolving. For this reason, with a few exceptions, competition authorities have been hesitant to lay down rules on how platform markets should be defined – to the point that market definition has been left open in many cases.
However, the Competition Commission of India (CCI), which is an active antitrust enforcer, has defined platform markets or given its opinion on market definition of platforms in a number of cases. However, there is limited literature on the CCI’s market definition practices. This presents an interesting opportunity to examine the extent to which Indian competition law is ready for the challenges presented by digital markets and to analyse the CCI’s decisional practice with specific focus on market definition. The paper first provides a framework within which such an analysis can be conducted by highlighting the key issues identified in academic scholarship for defining platform markets. It then applies this understanding to the analysis of recent CCI orders. The study finds that the CCI has not changed the way it defines markets to account for the particularities of multi-sided platforms. The CCI’s approach has failed to consider the interdependencies operating on both sides of a platform which has led the CCI to make errors in assessing the competitive constraints operating on market participants, to make its subsequent analysis of dominance and abuse ambiguous and ultimately to make the process of market definition redundant. At the same time, CCI’s recent telecom market study report presents some hope that its approach is evolving with the times.
Keywords: Multi-sided platforms, indirect network effects, market definition, digital markets, competition law, Competition Commission of India, Competition Act.
JEL Classification: K21
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