School of Law

Five Year Integrated B.A.,/B.B.A.,/B.Com., LL.B. (Hons.)

Literature Review :- The Progress of E-commerce and

COMPETITION LAW

Course Instructor : Name: Jeba Boktiar Mondal

Prof. Shinil ID No : 20181BAL0022

1
After analysing several papers on the topic of progress of E-Commerce and Competition
Law, I have come across various issues. E-commerce is an umbrella term which includes the
sale, purchase, marketing and distribution of goods and services through electronic networks
and the internet. India is the fastest-growing market for the e-commerce sector globally.
Revenue from the sector is expected to increase from $39 billion in 2017 to $120 billion in
2020, growing at an annual rate of 51%, the highest in the world. This monumental growth of
the e-commerce sector is chiefly due to the increase of smartphone and internet users in
recent years. The number of internet users in India has increased from 445.96 million in 2017
to 665.31 million in 2019 and is expected to increase to 829 million in 2021. There has been a
steady increase in investments in the e-commerce sector since the year 2009, with an
astounding 1650 companies entering the industry in 2015. It is estimated that presently
around 4757 start-ups operating in the e-commerce segment are active in India. E-Commerce
in goods category has grown at a steady compound annual growth rate of 57% in the last
seven years and is expected to grow by 18.6% till 2022. The online retail market in India is
estimated to be worth $17.8 billion in terms of the gross merchandise value (GMV) as of
2017. The sales from online travel and hotel bookings in India are likely to reach $39.09
billion by 2021, growing at a CAGR of 16% between 2015 and 2021. The food-tech industry
in India is estimated to grow at a CAGR of more than 12% between 2016 and 2021.

The Competition Commission of India (CCI) conducted a market study on electronic

The CCI identified certain areas of the e-commerce ecosystem which are likely to come
within the ambit of competition issues. Exclusive agreements between the online retailers (e-
tailers) and the sellers, deep discounts offered on the online platforms which are oftentimes
predatory in nature, platform neutrality and platform parity clauses, are some of the areas
highlighted by the CCI in its afore-mentioned report. In the year 2019, there had been several
clashes between dominant e-commerce companies and the CCI. Google found itself under the
scanner of CCI after paying a record 4.34 billion Euros in fine to the European Commission
for breaching European Antitrust laws. Google was found to abuse its dominant position in
the Indian smartphone mobile device market too and was fined accordingly.

2
Competition laws have been developing steadily throughout the different nations of the
worlds since e-commerce has appeared and grown to be a novel market area, a serious boon
to the economy. It will not be an exaggeration to say that e-commerce is the marketplace of
the future. While the different countries all have their respective antitrust laws, it was also
inevitable that they had some noteworthy encounters with the enterprises of the e-commerce
marketplace. In the year 2000, there was a long trial against Microsoft for antitrust violations
related to its software marketing activities in the USA. The US government brought the case
against Microsoft because, among other things, Internet Explorer was alleged to control the
browser market since it was packaged as part of the Windows operating system. That made
entry and maintaining market share complicated for competitors, even though any Windows
user could load competing browsers. The court found that Microsoft unlawfully tied its Web
browser to the Windows operating system, but the Department of Justice settled during the
following appeal, so Microsoft was able to continue incorporating its browser into Windows.
The Indian competition law regime is in its nascent years. Therefore, it is not a surprise that
there exist very few comprehensive works on this subject and even fewer dealing with the
relation between competition laws and e-commerce. The report of CCI on its study titled
‘Market Study on E-commerce in India’ perhaps the most crucial and updated resource which
will guide the future of competition law and e-commerce in India. The Market Study was
pretty in-depth and thorough, which allowed the CCI much needed insight into the current e-
commerce scenario of India. The CCI has identified and called out several issues to light in
its report of the study and although the CCI has refrained from calling any measure anti-
competitive or justified in a proper context, it has advised the business owners and enterprises
to impose some self-regulation if they wish to conduct their respective businesses without
any hindrances or complications.

E-commerce platforms create significant market opportunities and offer great potential for
businesses to widen their market access. This also leads to a growing dependence of
businesses on these platforms. A fragmented supply-side and only a few major intermediary
platforms create a situation of asymmetry of bargaining power. As the study reveals, this
bargaining power imbalance and information asymmetry between platforms and their
business users may be prejudicial to the interest of business users. Moreover, the possibility
of multi-homing by businesses does not appear to act as a competitive constraint since all

3
major platforms have similar practices on the sellers’/service providers’ side of the
marketplaces, which similarly affect the businesses.

Moreover, I would like to draw my opinion that the e-commerce sector is a booming and
lucrative industry, and the few heavyweight enterprises in this sector keep finding different
avenues of bypassing the existing laws and exploiting their dominant position. With the
increase in users of e-commerce and the evolution of artificial intelligence-based targeting
and personalisation algorithms, exploitation of these types should be expected to be on the
rise. Since the industry and market is ever-evolving in nature, the application, interpretation
and scope of the laws dealing with them also need to keep improving. The development of e-
commerce has been heartily welcomed by consumers. E-commerce has ushered in a new
wave of competitive benefits such as lower prices of air tickets, books, clothes, CDs and
Insurance policies. The fact that e-commerce merchants do not need traditional brick-and-
mortar shop-rooms to sell their goods means that people with less starting capital can also
trade on the digital marketplace. The digital marketplace has virtually global reach and thus
enables the e-commerce merchants to access a wider geographic market.
Thus it is evident that the CCI is not underestimating the exponential progress of the e-
commerce industry in India and taking some right measures to ensure its steady growth.

4
5