Regulating the intersection of data protection and competition is hard. Dominant platforms can leverage user data to create monopolies, limit user choice and raise competition concerns. As India prepares its own data protection law, it should try and avoid regulatory overlaps and strike a balance between data protection and competition regulation.
Issues of privacy and competition often overlap and we need a coordinated approach between regulators. That works in the US and EU where both the privacy and the competition regulators are active. In India, where we are yet to establish a privacy regulator, the competition commission will step in and regulate privacy aspects of data businesses from a competition perspective. There is a risk that privacy will be decided from a competition perspective. We need a data protection authority asap.
The Competition Commission of India has argued that since privacy is a non-price factor of competition, the competition regulator can regulate it. Privacy is a specialised area that should not be entrusted to a regulator that brings a purely economic lens its regulation.
The National Payments Corporation of India (NPCI) is considering reviving a proposal to limit transactions per entity in the Unified Payments Interface (UPI) ecosystem to prevent market dominance by a few players. Currently, three major players dominate the market, with two accounting for 77% of transactions. The NPCI aims to mitigate systemic risks and promote competition. There are alternative measures like leveling the playing field, regulating data control, and allowing more participants, rather than imposing transaction limits, to ensure a diverse and competitive UPI ecosystem.
In 2011, a biology book was listed on Amazon for $1.7 million, eventually reaching $23 million due to two sellers’ algorithms reacting to each other’s pricing. This incident underscores the challenges and potential regulatory issues as businesses increasingly rely on algorithms. It has gained attention in legal contexts, including Indian courts, where cases challenge the legality of pricing algorithms used by ride-hailing companies.