CLRT

Unfair Business Practices of E-Commerce Platforms and the Need for Ex-Ante Regulation for Digital Markets

A Reuters investigation in October 2021 revealed that Amazon, a leading e-commerce platform in India, copied products of retailers that it hosted and downgraded them in search rankings to promote Amazon’s private label allowing the firm to make profits at the cost of its rivals. Such practices potentially stifle innovation, erect entry barriers for small businesses and diminish trust in digital markets in general. The theoretical possibility of a dual role e-commerce platform— that of a marketplace and a retailer simultaneously—engaging in self-preferencing was suspected for a long time. The recent events in India lent evidence to the theoretical possibility of self-preferencing. While in the US, some lawmakers called for initiating criminal proceedings against Amazon for misleading the US Congress about its business practices, the European Union (EU) is debating ex-ante regulation for digital ‘gatekeepers’ that address practices such as self-preferencing and interoperability.

Despite being a prominent digital market, India does not have a regulatory framework to address anti-competitive and unfair practices in digital markets, where competition law is known to have limited efficacy. Against this backdrop, two separate panels in this conference addressed the following issues.

1. Why has an ex-ante regulatory framework become critical in digital markets?
2. What are the risks of not having a similar regulatory framework in India? Also, what are the institutional challenges facing the adoption of such tools?
3. Do the ongoing efforts in the EU, Germany and the UK offer appropriate regulatory models even for emerging markets such as India?