UPSC CSE Mains Syllabus: GS-3- Effects of liberalization on the economy, changes in industrial policy and their effects on industrialgrowth.
Statutory, regulatory and various quasi-judicial bodies
India’s antitrust body, Competition Commission of India, is looking into allegations that Alphabet Inc’s Google is abusing its market position to unfairly promote its mobile payments app in the country.
“The Google antitrust complaint alleges the company is able to leverage its strong position in the Android market to promote the app, the source added.”
What is the complaint?
- The complaint alleges the U.S. tech giant more prominently showcases its Google Pay app inside its Android app store in India, giving it an unfair advantage over apps of competitors which hurts consumers..
- This is Google’s third major antitrust challenge in India. In 2018, the CCI fined Google $21 million for “search bias”, but a company appeal against that is pending.
- The CCI last year also started probing Google for allegedly misusing its dominant position to reduce the ability of smartphone manufacturers to opt for alternate versions of its Android mobile operating system.
- Google Pay allows users in India to do inter-bank fund transfers and bill payments. It competes with apps such as Softbank-backed Paytm and Walmart’sPhonePe in India’s crowded digital payments market, where Facebook’s WhatsApp is also planning a similar service.
- Google said on its blog in September that its payments app had rapidly grown in India to reach 67 million monthly active users, driving transactions worth more than $110 billion on an annualized basis.
- Use of such apps has surged in India.
India’s antitrust law:
- India’s antitrust law, The Competition Act, 2002, was fully constituted on March 1, 2009 – replacing the Monopolistic and Restrictive Trade Practices Act of 1969.It created a competition commission to carry out the duties of the act.
- The Competition Commission monitors any economic activity that monopolizes competition within the market; it aims to protect consumers and small enterprises, and ensures the freedom of trade.
- The Act also regulates acquisitions, mergers, and combinations in India.
- It is the duty of the Competition Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.
The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.
- The digital economy is swiftly moving in an upward trajectory in India.
- Financial transactions are being made digitally more now.
- In such a scenario, some companies may strive to appropriate the market to themselves through fair or unfair mechanism.
- This creates adverse conditions for both competitors and consumers. Hence, there is a need to create a fair market mechanism.
Why fair market:
- Competition is the best means of ensuring that the ‘Common Man’ or ‘AamAadmi’ has access to the broadest range of goods and services at the most competitive prices.
- With increased competition, producers will have maximum incentive to innovate and specialize.
- This would result in reduced costs and wider choice to consumers.
- A fair competition in market is essential to achieve this objective.
- Our goal is to create and sustain fair competition in the economy that will provide a ‘level playing field’ to the producers and make the markets work for the welfare of the consumers.
Abuse of dominant position:
- The Competition Act prohibits any business arrangements that could form a nexus within the chain of supply, distribution, storage, acquisition, control of goods, or provisions of services.
- While India’s laws do not prohibit ‘dominance’, its abuse through price manipulation, exploitation, or exclusion is prohibited.
- An establishment has a dominant position if it can influence competitors or consumers to its advantage.
- Thus, the Competition Act guarantees that no enterprise abuses their ‘dominant position’ in a market through the control of supply, manipulating purchase prices, or adopting practices that deny market access to other competing firms
- Earlier this year, the CCI imposed a fine of US$20 million (Rs 136 crore) on Google for the violation of competition laws through the abuse of its dominant position.
- This is a clear example of why international companies operating in India need to adhere to the country’s competition laws, and the consequences of non-compliance.
Such anti-trust regulations prevent large multinational corporations, both domestic and international, from gaining undue advantage in the Indian market, and also seek to protect small enterprises.
Source:” Economic Times“.
Possible UPSC CSE Mains Question