Faculty Seminar | Competition Regulation in Two-Sided markets: The Indian Experience
December 11, 2019
The paper was presented by Mr. Akash Krishnan, Teaching Associate (Economics), NLSIU.
With the expansion of computing and the internet revolution, two-sided markets are fast becoming ubiquitous across all spheres of the 21st-century economy. The phrase “two-sided market‟ at first sounds like a tautology, i.e., by default, all markets have two sides, a buyer side, and a seller side. Formally, it is defined as a market in which the volume of transactions between end-users depends on the structure and not only on the overall level of the fees charged by the platform. These businesses need to address the “chicken-egg problem‟ and successfully get both sides on board.
While these new forms of business have on the one hand reduced transaction costs, there is empirical and experimental evidence of these markets being highly concentrated, with a tendency to lean toward „winner takes all‟ owing to network effects. Regulators across the globe are attempting to strike a balance between not curbing innovation on the one hand and at the same time, protecting consumer welfare. In this regard, we analyze 25 antitrust cases pertaining to two-sided markets in the Indian context to understand the pattern of judgements in the country in the backdrop of a decade of existence of the Competition Commission of India (CCI).
The cases traverse several industries namely radio-taxi, online marketplace, real estate, healthcare, entertainment, stock exchange, broadcasting, online search and academic publications. We argue that CCI with its non-interventionist policies, reflected by the number of acquittals at the prima facie stage, coupled with instances of high discretion and low predictability falls in the “Market Discretionalists‟ category.