With optimal competition and regulation, digital economy can make USD 1 trillion of our USD 5 trillion economy in next five years – Jay Panda, National Vice President, BJP and Former MP

December 01, 2019, New Delhi

The size of digital economy in India is around USD 181 billion dollars today. If handled optimally, it can contribute substantially to our economic growth. One of the ways to do this could be to distinguish large companies from smaller ones. Large companies, particularly those turning into utilities, must seek consent from consumers for data use and should be subject to stringent regulation. Their smaller counterparts, including start-ups, however, may need not be subject to such severe regulation. These thoughts were shared by Baijayant ‘Jay’ Panda, National Vice President, BJP and Former MP.

He was speaking on the theme of Making Competition and Regulatory Regimes Matter in Increasingly Online Developing World, at the opening of a flagship event on Competition,
Regulation and Development, organised by CUTS International and CUTS Institute for Regulation and Competition. The event spans over two days and will conclude on 2nd December.

Sangeeta Verma, Member, Competition Commission of India, highlighted that competition regulation cannot be seen in isolation from development goals. Regulators need to understand how digital markets are evolving. Data driven acquisitions need an evolved merger and acquisition thresholds, as Competition Law Review Committee in India has introduced deal value thresholds in place of mere asset value thresholds. In pursuit of dynamic efficiencies, emerging monopolies need to be rewarded for innovation.

In order to efficiently understand and examine developments in online economy, competition authorities need to be capacitated. However, as George K. Lipimile, Director General and Chief Executive Officer, Competition Commission of Common Market for Eastern and Southern Africa, a regional competition authority, noted, competition authorities in emerging countries have limited resources and lack requisite capacity. There might be a need for a new model law for competition to deal with evolving issues in digital economy.

Pradeep S Mehta, Secretary General, CUTS International, noted that emerging economies will need to tailor competition and regulation regimes for their requirements and cannot solely rely on experiences of advanced economies. There is a need to have a dual approach on optimal regulation and competition enforcement, informed by a whole of government approach. He suggested institutionalisation of National Competition Policy to ensure better coordination between competition authority and sector regulators, both at the level of centre and states.

Professor David J. Gerber from Chicago-Kent College of Law highlighted the models adopted by United States of American and European Union on examining digital economy. He mentioned that developing countries will need to tread their path carefully. Former Finance Secretary and Chairperson of CUTS Institute for Regulation and Competition Arvind Mayaram appreciated the engagement of competition regulator with civil society and hoped that the same will continue. The need for capacity building of regulatory agencies, and closer involvement with external expertise, to enable them to keep abreast of evolving issues, was also highlighted. Amit Kapoor, Honorary Chairman, Institute for Competitiveness, advocated the need to promote competition among ecosystems in the digital economy.

Pradeep S Mehta also highlighted the need for greater evidence-based approach to ensuring optimal regulation and competition in digital economy. He pointed out that over the last few years, CUTS has undertaken several consumer facing studies to understand the
behaviour, perception of users in digital economy.

Other participants in conference included Allan Asher, Chair, Foundation for Effective Markets and Governance, Australia, who cautioned against overemphasis on national security considerations as an exception to privacy standards.

For more information, please contact:
Amol Kulkarni ; amk@cuts.org; 099296 42313
Ujjwal Kumar ; ujk@cuts.org; 091990 30799