Digital cos’ data hegemony may lead to ‘attention economy’, says CCI chief

Competition Commission chief Ashok Kumar Gupta on Thursday flagged that data hegemony by some digital companies may lead to “attention economy” in which big tech players work to capture users’ attention, build profiles of their choices and sell the profiles to advertisers. The remarks from the Chairperson of the country’s fair trade regulator assumes significance against the backdrop of concerns in certain quarters about the business ways of big tech entities and also some digital players coming under the lens of the watchdog.

While noting that rapid changes are happening in markets, which are increasingly shifting towards a digital platform-centric configuration, Gupta also pointed out that these platform markets are by their very nature “winner-takes-all or winner-takes-most”.
“Network effects, access to large amounts of data, economies of scale and scope, induced behavioural biases among consumers etc., in digital markets, may heighten market concentration and result in the creation of impermeable entry barriers,” he said.

Addressing a conference on competition law organised by industry body Assocham, Gupta said that data hegemony by some digital companies may lead to an “attention economy”.

In an “attention economy”, big tech players work to capture users’ attention, build profiles of their choices and habits, then sell those profiles to advertisers, he added.

“Moreover, since these digital platforms are the ones who make the rules about how different users would interact on their platform, it gives them an incentive to engage in conduct that may not only impede competition in the market but may also strengthen their incumbency advantage,” Gupta said.

According to him, the regulator has a very important role in ensuring that these platforms remain neutral, offer a level playing field and allow enterprises, big and small, that access consumers through these platforms to compete on the basis of merits.

The Chairperson of the Competition Commission of India (CCI) acknowledged that in these fast-evolving and dynamic markets, a regulator’s task is much like hitting at moving targets, adding that the regulatory stance needs to be nuanced and the enforcement toolbox needs to be adapted to these changes so that the instrumentality remains fit for purpose.

“The challenge is to keep abreast of the developments in these markets and continue to evolve and refine the tools. This will help make timely interventions and strike a fine balance so that efficiency and innovation are not stifled while markets are free from anti-competitive practices,” Gupta noted.

Further, the CCI chief said technology and disruptive innovation in the digital economy are rapidly altering the contours of markets, transforming the ways of doing business, ways of communication and ways of transactions.

“Technology-laden economy” is bringing new issues and concerns to competition policy discourse, he added.

Talking about merger control in digital markets, Gupta said data is a crucial factor for economic power and for judging market power on the internet.

He also noted that since not all digital markets are alike, nor is all data, interventions in merger reviews in technology markets need to be guided by case-specific economic evidence of competition concerns.

“With increasing numbers of acquisitions and investments, large platforms are continually expanding the scope of their business interests, and the motivation may be collection of complementary data that help reinforce their market position,” Gupta said.