The structure of anti-trust laws is generally and neatly divided into ex-post enforcement and ex-ante regulation of market conduct and its participants. It is a matter of social and economic policy choice as to whether any regulation should precede ‘harm’ or follow it, as is the construction of ‘harm’ across statutes. For example, the requirement of a merger notification is an ex ante means to understand and assess the market impact of a merger. On the other hand, abuse of dominant position is an ex-post assessment once the dominance has set in, which may be in the long run. The determination of abuse is subject to a rule of reason and analysis by the competition authorities. Against this background, the question is what happens in the intervening period when an undertaking is slowly and surely inching towards domination, engaging in conduct which would be punished only once it becomes dominant ? What happens to the process of concentration of markets, along with the practices in concentrated markets? These questions are not borne out of academic interest alone and are not completely answered by a simple focus on anti-competitive agreements, as will be seen below. The analysis will zoom in on the Indian market conditions to make a case for questioning the timing of regulatory intervention and proceed to show that new economic methods may be required in this task.
The evolution of anti-trust action, a case study of India
The retail sector in India has been growing and constantly changing. A pertinent example of the risks that Big Tech entities present to such a market can be understood through Amazon’s along with Flipkart’s position in India. This analysis does not focus on the e-commerce platform as the market but the larger marketplace in which the platform occurs and competes with extant structures, including traditional businesses.
In India, two disputes, five years apart, against the same opposite parties, with largely the same issues have led to diametrically opposite outcomes on the anvil of ‘term’ based dominance. The Amazon and Flipkart entities have been embroiled in litigation in India since a long time, most notably due to the competition concerns they portends for the unorganized or the majority of the retail economy of the country. They are not only competing with other platforms but also with various myriad types of retail arrangements through deep discounts, exclusive offerings and a web of related companies which are the significant sellers on the platforms. These practices not only impact the other sellers on the platform but also the players in the value chain. As a digital and online intermediary or marketplace, a platform replaces other intermediaries such as retailers and distributors. This displacement of livelihood has led to calls for ‘capital dumping’ to provide a discursive handle to a problem that arose due to such massive capital backing that erasure of alternatives is inevitable.
Since 2015, the competition regulator, Competition Commission of India (“CCI”) has let them off the hook due to their apparent lack of dominance in the market, as defined. It must be noted that this decision took into consideration the ‘short term’, when e-commerce was just gaining foothold in the Indian markets. While the market practices did not draw the regulator’s ire then, within a short span of five years, they have met CCI’s standards and are under scrutiny by the CCI Directorate General, only to be stalled through court stratagems, curious to understand this volte face by the CCI. The regulator concluded that it will investigate these companies for their market practices, but not for the dominance as they are jointly dominant, a conduct not punishable per Indian law ! In the long term, the share of Amazon has increased to 36% of all online commerce in the country, with Flipkart controlling another 53%. It has caused enough damage not only to the sellers on the platform but also to the other retailers in the offline channel of the market. While the leverage of a dominant entity to gain a foothold into a market is punishable if abusive, the conclusion of dominance is a technical one, often dependent on the delineation of a relevant market. The point is that given the narrow scope covered through the relevant service market of online retail, the judgements are largely devoid of any discussion about the disruption or the impact of the abuse on the retail market as a whole, especially for the offline mode of commerce. These omissions aggravate the tricky situation of striking the iron at the right time, lest the market be considered ‘dynamic’ enough to not need any change or study.
A call for a new normative for markets
This is not to say that competition law is wont to miss out on this commercial movement, from treading the path of dominance to the abuse of it. For example, the conclusion of margin squeeze being incurred by an emergingly powerful entity, in its dealings with downstream players, can prevent resultant harm by the entity as it will become a dominant one. It halts dominance in its tracks, if the market conduct is anti-competitive though it may be restricted only to the platform as a market unless there are sufficient dealings between the online and offline channels. Further, the European Union is cognizant of the ills of the temporal determination and is discussing various measures to supplement its competition law and its application in the digital sphere. The key examples are the draft Digital Markets Act and the New Competition Tool. These policy tools allow regulators to monitor market conduct of platforms, designate them as ‘gatekeepers’ and carry out regulatory intervention tailored to suit the needs of a healthy and fair economy throughout the period of such monitoring, beyond the strict boundaries of time based action and damage.
In light of these new beginnings, the question I wish to raise is, whether there are any economically rigorous tools that anti-trust authorities can use to decide such claims, even in the short run based on holistic predictions? This would change the wait for long run damage to set in as such predictive claims don’t fit within the neoliberal theoretical prescriptions, governing competition laws. With the economic sphere undergoing a significant churn due to digitisation, it is an opportune moment to invigorate this discussion. The aim is to devise means within the scope of law, think of the disruption the breadth of a market and account for its irreversibility once it is set into motion so that the loss of livelihoods is not perceived as a short run cost for development.
 Note that capital dumping is theoretically undersketched and hears calls from across the spectrum of voices. It is used by emerging domestic unicorns, funded by foreign funds to stave off foreign e-commerce, big businesses like Reliance Industries, but also the association of offline traders, retailers and other participants of the supply chain against all online commerce; domestic or foreign.
 In Re: Mohit Manglani v. Amazon Seller Services Pvt. Ltd. and Ors. (2015)
 Delhi Vyapar Mahasangh v. Flipkart Internet Private Limited and its affiliated entities and Amazon Sellers Services Pvt Ltd. and it affiliated entities (2020)
 It must be noted that according to another estimate, both hold approximately 30% of the online commerce share and that online commerce forms a small part of total retail, around 5% but it is continuously increasing.
Photo by Amit Agarwal.