Kaur also said the commission’s role is to provide a 'level-playing field' in the Indian market.
Speaking at the Global Economic Policy Forum held in New Delhi last week, the Chairperson of the Competition Commission of India (CCI), Ravneet Kaur, stated that the Commission is trying to catch killer and creeping acquisitions in the digital market.
"Killer acquisitions" refer to a practice where a dominant company acquires a smaller competitor, with the primary intent of stifling potential competition.
Creeping acquisition is a process through which shares of the target company are acquired gradually from the open market.
CCI Chairperson Ravneet Kaur said the antitrust regulator is keeping an eye out for the deal values of a lot of digital businesses that do not meet the asset turnover thresholds set out under the Competition Act.
Kaur reinforced that CCI’s intention is not to block deals.
“We look at structural and behavioural remedies so that the deal can go through with modifications,”
she said.
As per the 2023 amendments to the Competition Act of 2002, an additional layer of scrutiny was introduced to check the competition impact of those deals that do not meet the asset turnover thresholds set out under the Act and were therefore escaping the regulator’s attention. As per the amendment, any deal value crossing the Rs 2,000 crore (approx. $235 million) mark and the company being acquired having substantial business operations in India would fall under the CCI’s scrutiny.
The Chairperson of CCI also highlighted the issue of AI startup employees being poached by large tech companies.
“There are concerns on poaching of AI staff by big digital platforms of small startups. This is a global concern. If it's found in India, it will be looked at by CCI,”
she said.
Speaking about the regulation of digital giants, Ravneet Kaur mentioned the European Union's Digital Markets Act (DMA) which has been in effect since last year, with a code of conduct for influential digital economy firms. India, with its large startup ecosystem, requires local norms and its own approach to regulation, said the Chairperson of CCI. The realities of the local economy are different, and that should play a role in framing a digital competition law, for which the government has brought out a draft bill for public feedback.
“This is not the case with the EU. So, whereas the EU can look at something like a Digital Markets Act and it has a very different perspective, when we look at framing ex-ante regulation, we are very conscious of the fact that we are having a lot of startups and they are in fact the hub of innovation, and of entrepreneurship. That's where we find growth in the Indian economy,”
said Kaur.
The panel discussion had other big names taking their respective stances on balancing the need for regulation with the need for promoting innovations. The Chief Economic Advisor of India, V Anantha Nageswaran, said that the cost of an innovation forgone is not easy to measure.
K Rajaraman of the International Financial Services Centres Authority said that regulators need to find the balance between innovations and regulations. Regulators must ensure that they do not stifle innovations.
“It is an everyday fight in as much as a regulator is only questioned when something goes wrong, never praised when something goes right,”
he said.
At the conclusion of the discussion, the CCI head emphasized:
“We should work within the Indian economy because our role is to provide a level playing field to promote sustained competition in Indian markets.”
Sources: NDTV, Mint, The Economic Times
