[Siddharth is a student at National Law University Jabalpur.]
In July 2023, the Court of Justice of the European Union (CJEU) delivered a crucial judgment which clarified huge questions related to the intersection of competition law and data protection law. Many commentators have analyzed the various aspects of the judgment and how it changes the landscape related to the said intersection. In this piece, the author highlights various aspects which can prove helpful to the Competition Commission of India (CCI) since the Parliament passed the Digital Personal Data Protection Act 2023. Secondly, it also takes into consideration the fact that some flaws exist in the judgment which were avoidable. Lastly, it concludes that going ahead, there will be various instances where there is a need to have a clear distinction of jurisdiction when it comes to the CCI and the Data Protection Board.
What was Held by CJEU in the Judgment?
The primary question which was asked to the court was whether Article 51 of GDPR must be interpreted to mean that the competition authority of a state can in an issue related to abuse of dominance find that the handling of personal data by the company was inconsistent with the GDPR. CJEU, while relying on the order of the EU Commission, stated that it would be important to take into consideration the aspect of processing personal data without which there will be an undermining of the effectiveness of competition law within the EU. The court ruled in the affirmative that it was a settled position of law that member states, including their administrative authorities, must assist each other in full mutual respect to fulfil any obligation arising out of the treaty or any of the institutions of the EU.
What can the CCI Incorporate from the Judgment?
One of the most important observations which CJEU gave was that while assessing whether there has been an abuse of dominance by any particular marketing entity, the competition authority can also take into consideration other factors which are related to the governance of personal data mentioned in the GDPR. Further, in paragraph 50, CJEU emphasised the importance of personal data in the functioning of a digital company. Therefore, any disregard for the importance of personal data while deciding on the question of abuse of dominance is not correct according to CJEU. Such an observation is extremely helpful from the perspective of the CCI which is also seriously contemplating the passage of the Digital Competition Act.
It was also highlighted by the judgment that within Article 102 of TFEU, the Competition Supervisory Authority has the power to correct any of the distortions which take place within the market. As a result of this power, the Competition Supervisory Authority can investigate the processing of data by the companies. Similarly, in India’s context, Section 19 of the Competition Act 2002 provides power to the CCI to investigate certain agreements and the dominant position of the enterprise. Notably, in Google v. CCI, it was noted by the CCI that by getting access to huge volumes of data, Google can distort competition. The CCI also stated in its order that Google could use such data for creating profiles of consumers and monetization through advertising resources.
In India, the usage of data by companies varies according to their size and growth. Processing and collection of huge amounts of data inevitably qualifies under the category of a qualitative threshold.
While dealing with the parameters related to the qualitative threshold, the CCI can look at factors such as whether a company enjoys an entrenched position in the market, provides a core platform service, and the nature of data which is being dealt with by the company. Such parameters will ensure that big tech’s conduct in India’s regulatory landscape is regulated As this author argued, in India, the CCI now has the power to investigate such breaches of competition law on account of the recent addition of the phrase “substantial business operation” in the Competition (Amendment) Act 2023. Further, any investigation that the CCI carries on the abuse of dominance while considering the collection of data as a factor requires that the Data Protection Authority of India cooperate with the CCI. Thus, there is a requirement to have robust cooperation between both authorities to deal with cases of handling personal data and whether such processing amounts to abuse of dominance. Such an investigation by the CCI will have to be read with Sections 5 and 4 of the Competition Act 2002 which respectively provide for regulation of combination and abuse of dominance.
Why CCI Must also be Cautious While Implementing any Measure to Assess the Anti-Competitive Conduct of Big Tech Companies?
The CCI must be mindful of the fact that the overarching purpose of the Bunderskallmt and EU competition authorities has been an ex-ante regulation. In comparison, India’s competition watchdog must be careful while assessing the criteria for processing huge amounts of data since the legal conditions of both countries vary significantly. Various countries in the EU have been skeptical of adopting such an ex-ante regulation. Countries such as Germany have their regulation to deal with qualitative thresholds. Other countries such as the Netherlands and the United Kingdom are also evaluating their options whether there is a need to follow ex-ante regulation or not. Therefore, any qualitative threshold in an ex-ante regime should be assessed and scrutinized carefully.
Further, India’s data protection Industry is in a very nascent stage and the law is yet to come into force. Recent reports suggest that various industries have sought a time of up to 12 months to fully implement the law. In such a situation, the CCI must tread cautiously. At the same time, it is imperative that the CCI also effectively uses the Digital Market Data Unit to explore possible qualitative thresholds which can be used to handle anti-competitive conduct in the market. The CCI is the sole authority in India to deal with cases of anti-competitive conduct in comparison to the EU, where there are national supervising authorities as well as a leading supervising authority.
Conclusion
This piece attempts to analyze the effects of CJEU’s judgment on the powers of Bunderskallmt. After going through the above discussion, it becomes clear that with changing times, competition authorities are also required to change their approach in order with new challenges coming due to changes in the modus operandi of business operation of various companies. The author would also like to highlight the fact that the CCI in current times has been proactive in dealing with antitrust issues emerging out of big tech which is visible from cases such as Google v. CCI, Amazon v. CCI, Meta v. CCI and so forth. Thus, it is hoped that the CCI also takes a proactive step to combat the anti-competitive conduct of big tech by deploying qualitative thresholds by taking inspiration from their EU counterparts. Lastly, the multitude of cases arising in the present and likely in the future also suggest that there is a need to map out the jurisdiction of the Data Protection Board of India and the CCI.
Comments