Competition landscaping in AdTech industry: Why India may require a ‘unified’ approach

The rise of Big Tech has affected almost all walks of life. Be it faster communication, the advent of e-commerce, the adoption of high-tech modes of transportation or usage of sophisticated navigation, the rise of tech has influenced all facets of life. The use of convenience which precedes this deployment is also matchless where the growth of Big companies is almost meteoric. This growth, however, hasn’t come without its limitations.

One of the biggest concerns in the rise of Big Tech is the increased concentration of economic resources.(File)

Regulation of the Big Tech

One of the biggest concerns in the rise of Big Tech is the increased concentration of economic resources. The business operations of the Big Tech companies, primarily Google, Meta, Amazon, Apple and Microsoft, have invited scrutiny from competition authorities across the globe and subsequent action, thereby suggesting that the application of antitrust laws may be the most effective regulatory tools when it comes to keeping a check on the tech companies. Some of the most important concerns as highlighted by competition authorities in the US and the EU include pronounced ‘network effects’ and levying of ‘entry barriers’ by the Big tech companies through strategic mergers and acquisitions.

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AdTech industry

One of the sub-issues, which have gained considerable prominence, in this domain includes competition landscaping in the Advertisement Technology (‘AdTech’) industry. Some of the important stakeholders in this industry include publishers, advertisers, supply-side platforms (SSPs), demand-side platforms (DSPs), intermediaries and end-users. AdTech has attracted the limelight as it is intrinsic to the core of the business model of digital marketing entities. At a conceptual level, Big Tech companies collect and process user data at a mass level and then sell it to advertisers thereby allowing almost pin-point level accuracy in terms of user targeting. The industry is contended with data-privacy concerns where the intermediaries adopt lax policies to obtain consent of the end-user. There is also conflict of interest where some of the large companies, like Google and Meta, provide high technology to the supplier (publisher) and buyer end (advertiser) of the market connecting them on one hand, and on the same time selling advertisements on their own platforms using the same technology.

Ongoing investigations

Some of the leading countries which have done work in this space from a developed-jurisdiction perspective could be Australia, France and the UK. Some of the common issues as identified by these countries include the overwhelming dominance of Google across the AdTech supply chain, i.e. Publisher Ad server, Supply side platforms (SSPs) and Demand side platforms (DSPs), blackbox decision making and withholding of information from the publishers when it comes to communicating the actual price of the inventory. One of the most interesting observations is that all three countries have thoroughly relied upon the business practices of the investigated company across the globe, and not just in the given jurisdiction, to truly understand its business model and return a finding. For instance, the Australian Competition and Consumer Commission (ACCC) has cited the submission made by Google before its French counterpart, raising a red flag that the tech giant may have benefited due to the lack of coordination between national authorities and the subsequent information gap created.

The Competition Commission of India (CCI) is currently mapping competition in the AdTech industry where the issues raised by the informants remain, more or less, the same. The informants have alleged that Google indulges in monetisation of zero-click searches, imposes one-sided terms and conditions when it comes to the usage of technology service agreement and withholds the actual price of the inventory sold on a factual basis.

A case for a unified approach

It is not unknown that the AdTech industry deploys some of the most sophisticated technologies in the world. Sifting antitrust concerns through it might require a nuanced approach. For instance, once a demand is generated at the supplier’s end to show an advertisement to the end consumer, the routing of this information to the buyer, i.e. the advertiser, and subsequent allocation of the selected advertisement requires careful attention. The conflict of interest is also untypical where there might be an interchange of usage of terminology like intermediaries and SSPs.

In digital markets, however, time is of the essence. It may be prudent for the Competition Commission of India to make a fine balance and pay reliance on the work already done by mature regulators to navigate these issues and take timely action. It is a matter of fact that the Indian competition authority has signed Memorandum of Understanding (MoU) with almost all the developed competition authorities for greater cooperation. The Indian Competition Act even allows the antitrust watchdog to look into anti-competitive conduct which may have taken place outside the territory of India but has an effect within.

Conclusion

India lies at the cusp of transformation. The government has recently amended the Competition Act, 2002, enacted the Digital Personal Data Protection Act, 2023 and replaced British-era criminal legislation with Indian versions. Even the Competition Commission of India is guarded with the appointment of new Commissioners. It would be in line with the principle of ‘economically efficient allocation of resources’ on the part of the CCI to adopt a unified global approach and give a coordinated response ensuring fairplay for all. Such a measure is not only likely to save the scarce resources available with the CCI but also allow timely course correction of the market.

Sumit Jain is the founding director at the Centre for Competition Law and Economics (CCLE).

Dr. Versha Vahini is a professor at Bennett University.

Source website: www.hindustantimes.com

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