Ensuring fair trade rules in digital markets and emerging areas like AI, biotech a challenge: MCA secy

Fair trade regulators face a “major difficulty” in defining the boundaries of competition in the digital markets, corporate affairs secretary Manoj Govil said on Friday, adding that emerging areas--such as artificial intelligence, biotechnology and the green economy--have also brought about novel challenges for antitrust authorities.

Speaking at the concluding ceremony of a conference of the competition authorities of the BRICS grouping, Govil said these emerging sectors often lack established regulatory frameworks, making it difficult for regulators to address antitrust concerns by balancing the promotion of innovation with the prevention of monopolistic practices. There is a need for the antitrust authorities to move swiftly on this front, he added.

He also said ensuring fair competition in the digital markets, where network effects and data access can often create entry barriers for new players, poses a significant challenge for regulators.


“Today's world is one of rapid technological advancement and glorification of digital markets. And the competition authorities are expected to design new and novel instruments to ensure a level playing field in the market. At the same time, they should take care not to be too intrusive that might interfere with the process of innovation…,” Govil said, bringing to the fore the need to enforce fair trade rules without stifling innovation.

“The digital revolution has transformed the way business is conducted, giving rise to digital giants that wield immense market power,” he said, explaining the difficulty in oversight.

Given that these issues cut across international boundaries, a platform of dialogue among jurisdictions, including this BRICS conference, is necessary, he said. Sustainable growth is another area of importance to emerging economies, he added.

Ex-ante norms

To ensure fair competition in the digital markets, Govil said, competition authorities across the globe have not only reshaped their existing norms, but also started the process of putting in place ex-ante regulatory frameworks.

Ex-ante regulations for digital markets represent a “proactive approach” to address the unique challenges posed by the digital economy before the anti-competitive behaviour occurs, he added.

“These regulations are designed with a view to preventing market distortions and ensuring fair competition in an environment characterised by network effects, data-driven dominance and rapid technological change by imposing obligations on dominant digital platforms,” he added.

India, too, is deliberating on whether to come up with a new law to regulate the digital market and if an ex-ante framework needs to be adopted here as well following the recommendation by the Parliamentary Standing Committee on Finance, he added. Govil is, in fact, heading a panel on the digital competition law, which is likely to submit its report by the end of October.