Ex-ante regulation in digital markets in India: Some practical considerations

Abstract

Countries around the world have been perturbed by the business practices of big-tech firms, notably GAFA. Concerns have been raised about (i) fairness, (ii) contestability, (iii) innovation and (iv) transparency. Several countries have felt that they could no longer rely on standard usage of competition law which acts ex-post. They have felt the need to implement some form of ex-ante regulation to procatively address these concerns. Practices that have come under the radar include (i) self-preferencing, (ii) tying and bundling and (iii) Most Favoured Nation (MFN) clauses and across-platform parity agreements. There are also prescriptions on data portability, access and interoperatibility. India has a somewhat chequered experience with exante regulation is areas such as securities, telecom, electricity and ports. Regulatory bodies have been disadvantaged by proscribed powers and capacity. They have had to work under the shadow of lack of legitimacy and have had to deal with the judicial system. These issues cloud the prospects for an ex-ante regulator in digital markets in India. The paper suggests that legislating laws on some of these issues may be a better approach.