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Tech Startups in India & Its Competition Law

It is quite undeniable to state that an individual’s life revolves around new tech especially given the odious times of the pandemic. with its increased usage in our daily lives, companies like Facebook and Google seem to be omnipresent.

Thus the influence they present on anybody’s life is tremendous and sometimes unwarranted. This especially presents a problem for the individual if such an undeniably tremendous power goes unchecked and unregulated.

Given the burgeoning influence it has on society and the catastrophic circumstances it might have in the future given the spread of fake information, the Government has taken matters into its own hand.

This has led to the initiation of newer regulations and rules with regard to competition. These laws are more geared to deal with the burgeoning, unchecked power of big tech firms. It can, in fact, be stated that such laws are being passed to curtail the growing influence and power of the big techs.

historical development of the MRTP act

the monopolies and restrictive trade practices law was passed in 1962 to regulate and curtail the monopolistic trade in the Indian economy. It is here to be noted that initially it was initially had a socialistic character and did not apply to the public sectors.

It was due to this attribute of non-regulation of the public-owned entities like the banks, corporations, etc. that led to the passage of the Competition Act in 2002. Its main objective was to emphatically deal with anti-competitive agreements. In compliance, it also wanted to end the abuse of a dominant position and the acquisitions in the economy.

But what actually led to the debacle of the MRTP act? It was mainly due to the inefficiency that had crept in the system due to bias that had seeped in the system. It had led to the bias against the private sector which wasn’t quite accommodating.

On the other hand, the liberalization in 1991 had shaken the foundation of the robust MRTP structure in the Indian economy. It was also perhaps due to a lack of clarity on a variety of definitions that made it quite ambiguous.

Thus with liberalization in trade, robust competition law was effectively needed as trade and competition are effectively intertwined. But this also meant that Competition laws had effectively monitored the cutthroat competition that was presented by the foreign corporations to promote healthy competition and protect consumer interest.

It is to be noted that with increasing Competition law regulation, the system has become reductant and crippling. It with its regulatory authority has started to emphatically affect the tech companies in big ways in order to regulate their size and market dominance. In fact, internationally, the authority of Google and Microsoft have been challenged.

Coupled with it the Indian authorities have also invariably placed allegations against Flipkart and Amazon for their increasing discount sales in the economy. On the other hand, allegations have been filed against Facebook for renewing its investment with Reliance Jio.

Though the government in India is emphatically trying to control the competition and monopoly in India, its measures are increasingly becoming reluctant. It is to be noted that free trade is itself a competition regulator where the inefficient move out of the market.

With extra ostentatious and complex competition laws for a developing country, these are usually crippling. Competition laws are a luxury for the developed country that developing countries like India can ill afford.

On the other hand, the government’s new attitude towards regulating the big tech firms has been strongly reflected in the new amendment bill of 2020. This emphatically molds and changes the regulatory structure of the CCI in restructuring procedures for effectively regulating the guidelines.

The new bill also increasingly seeks to expand the Act to invariably and quite detestably include the digital markets. A recent example of the same is the heavy regulations that have been proposed for the arrangement and buyers cartel. With various reductant measures to regulate the digital world with the chief compliance officer and a series of measures, inefficiency is bound to seep in.

With the increasing popularity of the tech companies and corporations, it has been seen how the tech world is increasingly dealing with the cases such as the ola uber pricing issue and the other google antitrust allegations.

Talking about the mergers laws and the applicability of the competition laws, it is to be noted that the current merger control framework is traditional and hence reductant as CCI approval is needed if the two companies involved in the merger cross a certain limit of assets and turnover thresholds.

But given the nature of the tech firms, these are very asset-light and might actually not earn revenue for many years. This is due to the fact that the company’s more immediate goal is to expand and gain a consumer base in the market. Thus, this might lead to overlooking high-value transactions that might escape scrutiny.

In fact, the regulation of the digital framework regulation by just CCI will not help. This is due to the fact that it might also require the help of a data protection bill and more importantly of the broadcast company of India. Thus, the increasing number of regulations is not the need of the hour but the accommodation of the same is.

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Arbitrability of IP Disputes in India

Courts around the world have been systematically enlarging the ultimate scope of alternate arbitration dispute mechanisms. This is due to the fact that it has been witnessed throughout the years that arbitrability of ip disputes has progressively become the default commercial dispute mechanism around the globe.

Thus, it is quite imperative that the scope of alternative dispute mechanisms is widened in order to reduce the burden on courts. But talking about the Indian jurisprudence, on the contrary, it has been encountered that time and again courts have emphatically6 and effectively held that the disputes concerning various Intellectual Property Rights as non-arbitrable.

But why is this case with India? This is due to a pertinent and prime reason that courts often strongly are of the opinion that enforcement of IPR involves the public policy aspect. This effectively means that it would be strong going against the interests of the public if such contentious matter of intellectual rights is made arbitrable.

On the other hand, what makes the possibility of enactment of arbitration difficult is the fact that the Indian domestic statutes such as the Arbitration and Conciliation Act of 1996 and various other IP legislations do not effectively provide a concrete expression.

This concrete expression pertaining to the availability of Arbitration in IP Disputes is not strategically laid out by the aforementioned Acts.

To state the specifics to reinforce the fact, it is to be noted that Section 89 of the code of Civil Procedure, 1908 strategically states that the court has the extreme power to refer the IP matters to ADR. Thus, Courts are given the authority or the extreme power to deem fit and consequently allow arbitration, mediation, or conciliation for the alleged settlement of disputes.

Given the aforementioned authority, Courts have been strongly trying to settle the ADR practices. They have also come up with various tests to strategically and easily determine the arbitrability of various types of disputes. Thus, one can conclude that the arbitration process in India is well laid out by the courts that laid out the tests and measures to effectively determine the arbitrability of disputes.

To cite a case, the case of Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd. Serves as a perfect example. In the aforementioned case, the Supreme Court had strongly held that all the disputes which directly pertain to “right in personam” are arbitrable in nature. On the other hand, for clarity, it was stated that all the disrupts that highly relate to “right in rem” are effectively unsuitable for arbitration.

So, the gist of the aforementioned example gives us a much-needed sneak peek into the world of arbitration in India. It intelligently informs us that a major aspect that determines arbitrability is actually the nature of judgment sought by the aggrieved. This determinative attribute states that if the judgment that is sought by the arrived is against
The current status

To judge the current status of arbitration in India, the latest case of the Delhi High Court Judgment is worthy to be scrutinized. The case of Golden Tobie (P) Ltd. v. Golden Tobacco Ltd., is the case where the defendant had effectively filed an application under Section-8 of the aforementioned act namely Arbitration and Conciliation Act, 1996.

To lay down the facts of the case, the parties had entered into a master long-term supply agreement. Now, by the agreement, the defendant had supplied exclusive brands of the defendant to the Plaintiff. Here, to complicate the matter, the plaintiff had subsequently had entered into a trademark license agreement.

The reason by the plaintiff for the same was stated, he had acquired or had been effectively granted an exclusive non-assignable, non-transferable license. The license gave the power to the plaintiff to strategically manufacture the Defendant’s product.

Here, it was stated by the plaintiff, that despite the humungous operational expenditure and capital spent by the plaintiff to amicably and effectively increase the availability of the Defendant’s products, he was issued a termination notice.

Now here it is to be noted that since the commercial production had not yet begun in strength, the agreement was rightly terminated. Subsequently, it was informed by Defendant, upon receiving another termination letter that the timely payment had not been made.

Thus, this meant, according to the defendant, that the plaintiff had no right to potentially and effectively sell his products or manufacture the exclusive brands in the market. Hence, when this suit was filed, it was decided by the apex court that the matter under consideration will be referred to the sole arbitrator.

Thus, given the aforementioned case, it can be strongly argued that the arbitration in Intellectual property rights matters only arises out of the nature of the dispute. This also reinforces the idea that if the procedures are well in place, they can bring an affirmative impact.

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South Asia

The ”occasional dimness” issue is one that torments huge pieces of South Asia in long stretches of dry season (for a new outline, see Lim and Johnston, 1999).

The repeat of the El Nino Southern Oscillation (ENSO) peculiarity is likewise accepted to have drawn out the dry season also strengthened the inescapability of woods fires.

Singapore has encountered especially extreme negative natural effects of this problem, particularly in the later long periods of 1997, in the early long stretches of 1998, and in mid-1999.

The worry among Southeast Asian nations has reached a higher-than any time in recent memory level both in the public and private areas.

The examinations done on the 1997 murkiness found that the expense for Singapore alone arrived at US$163.5–US$286.2 million, with the best effect on the travel industry during the time of the murkiness.

Table 1 shows that wellbeing expenses and misfortune in the travel industry account\ for US$3.8–US$4.5 million and US$136.6– US$210.5 million, separately.

Backhanded expenses in the type of loss of perceivability, grand perspectives, and sporting exercises are likewise huge, in the region of US$23.2–US$71.2 million.

Furthermore, these quotes might be a misjudgment of the genuine expenses since not everything is probably going to be represented.

If the recurrence of the fog scenes increment, the related expenses are probably going to increment. Henceforth, it is basic to focus on the issue brought about by the fog in Singapore.

The significant reason for this ”occasional murkiness” issue is backwoods, shrubbery, and field fires in the islands of Kalimantan and Sumatra in Indonesia, and less significantly in Sabah, Sarawak, furthermore different pieces of Malaysia.

Practically these fires currently appear to be preventable, since they are intentionally set to clear land for development.

Hypothetically, the public authority specialists at focal, commonplace, and neighborhood levels in these nations ought to be liable for controlling exercises in their domain that cause widespread harm and pain, not just among their own populace yet additionally across their borders in adjoining nations.

Practically speaking, in any case, air contamination control through regulatory arrangements and practices is remarkably hard to carry out and keep up within a situation of this sort in agricultural nations, especially during a period of devastating financial mishaps, the new Asian financial emergency, and political vulnerability in Indonesia.

The worldwide academic local area has been checking and estimating enormous scope land and backwoods fires in various districts for numerous years, helped by refined recognition advancements.

Nino and its dry season creating impacts in Southeast Asia would empower watchful organizations in the district to plan all the more wisely in light of previous experience.

However, nobody proposes that the present lacking strategy reaction to the issue is expected principally to an absence of essential logical information about the issue.

A further logical examination of this sort is significant all around the world, yet the exploration cost is anything but a significant piece of the expenses of avoidance that ought to be met around here.

On the substance of things, a reformist (or even coalitionist) system in Indonesia may be relied upon to put generously in dimness-related research, yet with weighty reliance on worldwide wellsprings of specialized help.

Such an approach should embrace a management-directed research technique, which would comprise of two essential elements.

To begin with, this technique ought to mirror a genuinely genuine and efficient work to coordinate the many disciplines, both hard and delicate, that add to land use and sane asset the board in the fire-related spaces of the district.

Second, the logical research methodology for the battling area and woods flames ought to underscore remote detecting and GIS-related strategies for data gathering and handling. All things considered, any authorization regime will require close checking of the situation just as following methods and results.

These would seem, by all accounts, to be the two most financially savvy kinds of examination to be pushed to strategy producers in the area, however, they do experience the ill effects of specific weaknesses. Remote detecting, for instance, can just catch flames to a certain extent.

Assuming that the region impacted is little, there is a lot more modest possibility of location. This number and exactness of the factors utilized, which might incorporate the size of flames, region impacted, the thickness of overcast cover and climate conditions, decide the helpfulness of GIS-related strategies, and the Indonesian specialists may experience issues in social occasion precise data to utilize the GIS strategy.

Hence, other significant sorts of logical examination additionally merit proceeded with help from outside sources. The haze resulting from the fires in Indonesia has caused severe economic and environmental damage in the region and will continue to do so if no prompt and effective measures are taken.

This study has reviewed the related issues and suggested policy responses from different perspectives, and some incentive mechanisms for preventing or reducing the effects of the fires have been discussed. A ‘‘stakeholders approach’’ to sharing the costs of certain programs to combat the fires has been suggested.

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India’s E-commerce Regulatory Contradictions

Despite excessive e-commerce regulations in India, one can emphatically maintain that much is yet to be rectified. This needs to be specifically done in the P2B sector also known as the platform to the business model.

Owing to regulatory lacuna or void, several allegations have been registered regarding unfair trade practices. Allegations against E-marketplaces have surfaced which involve allegations like skewed placements and ranking, self-preferencing, and opacity and regulations in terms of the use of consumer data.

Thus, given the fact that the e-commerce sector is garnering more and more important, it is quite crucial that regulatory rules are played attention to.

Given the unprecedented last year, the domestic e-commerce market in India has flourished. One might even say that the digital revolution had been ushered by the onset of the pandemic.

this was mainly due to the fact that many individuals were forced to return to their home environment where the usage of e-commerce platforms and digit platforms became an inevitability.

In fact, the increased internet access and high smartphone penetration have fastened the process of digitalization of India. On the other hand, an immediate push for “digital India” by the Modi government has also contributed to the digitalization of India.

If the statistics are to be scrutinized, the pandemic inflicted woes on India’s retail sector that had shrunk by a significant 5 percent. But on the other hand, this opportunity was relished by the e-commerce sector which recorded a growth of a staggering 5 percent. This significantly had ramped up the valuation of the sector to a total valuation of $38 million.

If you are an avid online shopper, chances are you have increasingly heard about e-marketplaces. It can be rightfully stated that e-marketplaces can be seen as the new emerging trend in the Indian market. It is to be noted that – marketplaces connect sellers and business users with consumers but virtually.

E-marketplaces have garnered much popularity and have been presenting a tough fight to the physical retail sector that is still recuperating from the aftereffects of the pandemic. with the fall of the physical marketplaces and due to the variety of perks that were being offered by the e-commerce sector, such as massive discounts, home delivery, variety of products, etc. e-marketplaces have garnered much attention.

The tech giants that had the most to gain were namely Flipkart, Amazon, and food delivery aggregators namely Zomato and Swiggy.

As aforementioned, due to the stiff competition being provided by the e-commerce sector, there has been a growing unease for business users that sell their services offline.

Due to this trend, various allegations have surfaced like that of extremely unfair practices and trade which have been undertaken by presenting deep discounting and preferential treatment of platforms for its own offerings.

These allegations gain importance since the state of competition in the Indian e-commerce market tells the story of the concentration of immense power in the hands of a handful of e-marketplaces.

The unfair practices and growing share of a handful in the market have made it unavoidable for small businesses to partner with them. This is usually due to the fact that various small businesses want to set their foot in the market.

This detestable attribute has put the e-commerce giant in an indispensable position. This is due to the fact that the circumstances have arguably accorded them the status of being ‘gatekeepers’ within the sector.

On top of it, owing to the vast bargaining power imbalances that have cropped up into the system, the business is at a severe disadvantage to not be able to negotiate with such e-marketplaces giants. Thus, this has led to the practice of unfair practices and unfair treatment in the sector.

Talking about the regulation of the e-commerce sector in India, it is to be noted that e-commerce in India does not pertain to a particular sector. Due to this analogy, different aspects of e-commerce are particularly regulated by various other regulators in a particularly fragmented manner.

Now one might argue that various e-commerce regulations are in places like the Competition Act, passed in 2002, or the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 and the consolidated Foreign Direct Investment Policy, that have been significantly drafted for the convenience of the sellers. But it is a fact that all the aforementioned laws are quite toothless in the face of seller woes.

To put the analogy in perspective, it is sagacious to anise the Competition Act, 2002. According to the law, it is to be noted that it allows for significant and effective intervention only if the unfair practices are carried out by some ‘dominant’ entity.

It is due to this detestable attribute that various entities that actually relishing the fruits are left scot-free. Given the nature of the Indian e-commerce market, it is concentrated with a few big players, and not by a clear dominant player.

It is due to this attribute that the Competition Commission of India has been not been effectively and significantly be able to intervene in regulating such oligopolistic concentrations that are much more crippling in nature.

Thus, the need for regulation is immense in the Indian e-commerce sector given the character of the market. Thus, newer regulations and alterations to the existing ones are the need for the hour. But will the government take cognizant of the e-commerce regulations is it something we’ll have to wait and watch?

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The Regulation of Cryptocurrency in India

Call it the world’s greatest invention or the contentious asset of worry, you cannot deny the fact that cryptocurrency has wrapped investors around their fingers.

The fancy of the investors is quite justified given the high returns they earn in comparison to other assets in the market. Of all the investors around the world, Indian investors particularly have been largely invested in the concept.

According to the reports, the Indian Crypto asset industry witnessed tremendous, exponential growth over the last five years.

In fact, one can argue that the popularity of the asset had touched such heights, that authorities and great personalities have joined the debate. It is no news that financial literacy in India is mainly a farfetched concept, with many having little to no knowledge about it. But given the statistic, still more than 15 million Indians effectively now hold digital currencies.

Given the humungous support that has been received by the contentious digital asset, cryptocurrencies, like any other financial asset, also need to be regulated.

This needs to be emphatically done to effectively protect consumer welfare and to highly promote innovation as well.

Certainly, if you are a finance enthusiast or a market spectator, chances are that you know that the government is not particularly kind to the digital member of the financial asset family.

In fact, one can quite rightly describe the government’s demeanor towards cryptocurrency as belligerent.

But even given the central’s tough arduous stance on the digital asset, crypto assets, no matter what, are likely to form the basis of future forms of the internet. In fact, this is quite evident as the world of cryptocurrency in India is growing at an appreciable, astronomical pace.

For the crypto investors, recent weeks have been a roller-coaster ride.

This is due to the fact that the popularity of the crypto comes at a time when New Delhi is specifically aiming to introduce a bill to regulate the asset.

Her, it is worthy of mentioning that experts argue that the crypto market will be the future of the financial sphere in India.

Therefore, one can conclude that India, in future and present terms, is well placed to capitalize on this due to its burgeoning private crypto market. Given the aforementioned argument, it would be extremely unwise to place a ban on private crypto assets.

This will apparently lead to a significant revenue loss to the government. As a matter of fact, if the government even tries to censor the private currency, there are emphatically high chances of clandestine activities to be conducted and to force the nascent industries to operate illegally.

Thus, in lieu of normalcy, it is highly advised that a balanced regulatory approach be followed. It is imperative that the regulatory approach should effectively addresses concerns of money laundering, regulatory certainty, fiscal stability, and investor protection.

This all should be achieved while strategically preserving innovation. This suggestion garners all the importance due to the fact that the financial health of the economy and citizens is not too sound at the moment, any immediate, crippling regulation will certainly lead to financial shock in the economy, something that India can ill afford at the moment.

As a matter of fact, adoption of such a technique should not be an arduous task for the government as most of the aforementioned regulatory necessity to address the policy concerns related to crypto-assets, namely foreign exchange management, investor protection, tax evasion, and money-laundering and tax already exists in the financial legislation. What the need of the hour is the need for adaptation to accommodate an emerging technological paradigm.

Talking about an effective crypto regulatory framework, it should specifically include innovation-friendly, technology-neutral, and consistent to effectively and emphatically harness the full potential of India.

In fact, the prerequisite demand for a consistent, emphasizing framework is that it must lay down clear definitions to strategically and smartly identify the relevant regulatory bodies.

This will systematically help in clearing the ambiguity around the framework structure and operations of the government with respect to crypto. It is no news that in the finance world, one thing that is most certainly detested is uncertainty.

Thus, clarity on the laws and propaganda of the government is needed. It should also provide crypto asset service providers with safe harbor–protection from liability for the actions of investors on their platform.

Finally, one cannot deny the fact that where there are profits there is avarice for higher incomes and thus a high propensity for conduction of illegal activities.

To address this irregularity or inconsistency, the Government should emphatically adopt a co-regulatory approach.

In the co-regulatory approach, various other regulatory authorities and associations like RBI, SEBI, and the Ministry of Finance should be brought into the picture for sharing responsibility for oversight and regulation.

But is supervision and scrutinization by the regulatory authorities enough? To monitor the private players, incentivizing industry whistleblowing is important.

This is necessary as the players within the crypto-market will work to keep a check on each other’s activities, which will emphatically reaffirm the government’s idea of regulation.

Thus, given the aforementioned arguments, it is quite imperative for the government to alter its stance to ban private currency in the market. In order to avoid clandestine, illegal activities, the government will have to be mindful of the investors’ choices and decisions as well.

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