Competition Commission to release study on telecom sector shortly

Competition Commission to release study on telecom sector shortly

The Competition Commission of India (CCI) while gearing up its vigil in a bid to curb unfair business practices has also decided to release its study on the telecom sector as well as the emerging key trend that has emerged – the vertical integration between telcos and digital solution providers, including OTTs and e-commerce platforms.

According to the CCI's Chairperson Ashok Kumar Gupta, the market study on the country's telecom sector, which was initiated in January this year to have a clear understanding of competition in that space, is complete and will be released shortly.

He further noted that the enforcement for the digital space has to be complemented with non-enforcement tools such as market studies.

Currently, the CCI is studying mergers and acquisitions in the digital market, including those deals that might have escaped its scrutiny due to lower thresholds, and pharmaceutical sector.

According to Gupta, the key trends and observations that have emerged from the study inter-alia relate to vertical integration in the industry between telecom operators and digital solutions providers, including OTTs (Over the Top), e-commerce platforms, digital payment platforms and other cloud-based technology solutions.

In recent years, the domestic telecom sector has witnessed the exit of some prominent players amid stiff competition and legal cases.

The ongoing study on mergers and acquisitions in the digital market is aimed at understanding the emerging trends. The study shall also look at those mergers and acquisitions in the digital space that might have escaped the scrutiny of CCI owing to their asset/ turnover falling below the stipulated thresholds. Across sectors, only those mergers and acquisitions beyond certain thresholds are required to get clearance from CCI.

Owing to the concerns in various quarters about possible anti-competitive practices in the digital market, especially in the wake of the coronavirus pandemic, digital economy is emerging more prominently.

Therefore according to the CCI Chairperson, the challenge for the Commission, is to ensure that concentrated digital markets remain open to new entrants and that competition on and between the digital platforms is fair and just.

He added that among other efforts, the regulator has urged e-commerce platforms to put in place a set of self-regulatory measures over certain areas such as search ranking, collection/ use/ sharing of data, user review mechanism, revision in contract terms and discount policy.

He finally noted that it is always a challenge for competition agencies across the globe to strike a right balance, while undertaking enforcement actions, so that anti-competitive practices are curbed and at the same time, the incentives for the technology players to innovate are not curtailed.