E-commerce policy risks putting cart before horse

By Kalyani Singh, Chandhiok & Mahajan
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On 24 February 2019, the Department for Promotion of Industry and Internal Trade published the draft National E-commerce Policy (ECP), which sets out a proposed framework for the sector. While the ECP states that it aims to fill in the regulatory gaps, it also highlights several competition issues.

Market structure

Kalyani Singh
Partner
Chandhiok & Mahajan

Data is the main premise around which the ECP structured. It seems to suggest that data implies market power and monopoly. It notes that access to data can give rise to market distortions and that businesses would find that once it scales beyond a certain point, it makes entry into that area by a second comer next to impossible. According to the ECP, all of this results in barriers to market entry.

However, it does not identify any specific market, which is typically a starting point to assess any competition issue. The ECP broadly defines e-commerce to include buying, selling, marketing or distribution of goods, including digital products, and services through an electronic network. Despite this definition, it seems to include social media networks and search engines within the ambit of e-commerce. Such a consolidated definition of a market is contradictory to competition law jurisprudence.

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Kalyani Singh is a partner at Chandhiok & Mahajan.


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