By Mohit Kalawatia & Shivangi Mittal
In January, immediate messaging platform, Whatsapp, revealed its updated privacy policy, which permitted the business to share user information with Instagram and Facebook, the app’s parent business. Whatsapp’s updated privacy policy prompted Indian customers to flirt with rivals such as Signal and Telegram. Additionally, India’s IT ministry reportedly wrote a letter to WhatsApp CEO Will Cathcart, asking the business to withdraw the proposed modifications. It has also objected to Whatsapp’s differential remedy of Indian and European customers in the Delhi High Court. While India nonetheless awaits a information protection legislation, there is a need to have to analyse whether or not information protection is the principal concern at play.
Globally, antitrust regulators are contemplating the privacy implications of technologies platforms’ ownership structure, their use of user information, and a ‘lock-in’ impact, i.e., the user’s inability to switch to an option service provider. In July 2020, the CEOs of Facebook, Google, Apple, and Amazon appeared prior to the US House Judiciary Antitrust subcommittee. They had been questioned about their organization practices, like privacy policies and their effect on customers and competitors alike. Similarly, in their joint paper, the French and German Competition Regulators stated that privacy policies could be scrutinised from a competitors standpoint, specially when it entails a dominant entity.
The Competition Commission of India (CCI)’s current market place study on the Telecom sector indicates that the Indian regulator is sensitive to probable troubles of information concentration and privacy. Its jurisprudence suggests that the Commission has adopted a more conservative strategy. For instance, in Vinod Kumar Gupta vs Whatsapp, it held that privacy troubles are not a matter of competitors law. They ought to be resolved as per the relevant provisions of the Information Technology Act, 2000.
According to media reports, the CCI could investigate WhatsApp’s updated privacy policy as an abuse of its position as the dominant immediate messaging platform. Whether or not the CCI requires up the matter, this episode highlights the wisdom of market place forces. They will automatically avert abuse of dominance when adequate options are offered.
The availability of options like Signal and Telegram enables customers to exercising efficient decision, as switching fees are low, and they offer you comparable functionalities. Therefore, network effects could not entrench dominant positions if most participants can conveniently migrate to other platforms. If information protection becomes the parameter for competitors, regulatory authorities could not need to have to intervene. However, we can not be as sanguine about the dominance of massive companies in each and every segment of the digital economy.
Market shares in a segment that need important sources to attract customers or sustain a robust user base could not witness such mobility across platforms, as communications applications. A market place study released by the United Kingdom’s Competition and Markets Authority in July 2020 delivers an instructive instance. The study showed that Google raced previous rivals like AltaVista, and Yahoo as the top search engine mainly because it provided more rapidly and more relevant search outcomes. It additional highlighted that elements like crawling and indexing capabilities, amongst other folks, effect high-quality in search engines—financial and human capital expected to create these act as an entry barrier. Thus, even even though it is seemingly a lot easier to switch search engines, customers are unlikely to do so if they are sceptical about the high-quality of option services.
Meaningful customer decision in digital markets goes beyond the existence of several comparable services that customers can access. It depends on a complicated interaction of functionalities that companies offer you, their high-quality and the scale at which these are offered. Competition guidelines are created to not only remedy direct harm to customers but also indirect harms due to lack of competitors. In the quest to improve customer welfare, assessments by competitors regulators in digital markets ought to adopt a nuanced and versatile strategy as an alternative of a one-size-fits-all one.
The Authors work at Koan Advisory Group.
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