Paytm appoints Pallavi Shroff as board member to boost legal firepower
Benglauru: The move by payments firm Paytm to appoint veteran lawyer Pallavi Shroff as a board member is an indicator that the company is boosting its legal firepower in the battle with rivals Facebook, Google and others in the country’s booming but fast-changing digital payments market.
Last week, Paytm (One97 Communications Ltd) said Shroff, managing partner at law firm Shardul Amarchand Mangaldas, has joined its board.
Shroff is an expert in litigation and antitrust law and has been part of some of the biggest antitrust cases in India. Her firm represented Matrimony.com, which together with non-profit body Consumer Unity and Trust Society, won a Rs136 crore ruling against Google India from the Competition Commission of India (CCI) in February for unfair search practices.
WhatsApp’s entry into digital payments is seen as the biggest threat to Paytm, which is currently the biggest payments app in India. If WhatsApp can quickly push its payments service to many of its 230 million users, it will erode Paytm’s hold over digital payments. An early indicator of the seriousness of the rivalry was the resignation of WhatsApp executive Neeraj Arora from the board of Paytm.
In the past, fears have been raised about the dominance of Google and Facebook in India’s internet market. Google has a monopoly in search while Facebook and WhatsApp enjoy a similar position in social networking and messaging, respectively. Together, Google, which also owns the mobile operating software Android, and Facebook take in more than 80% of all digital advertising revenues in India.
Paytm didn’t respond to an email seeking comment. Shardul Amarchand Mangaldas declined to comment.
As Google, Facebook, Amazon, Flipkart and other large internet companies enter new niches and explore acquisitions, competition law issues are likely to increase.
Experts said that Shroff’s appointment to Paytm’s board is likely to have been prompted by the entry of Google and WhatApp into payments as well as the upcoming introduction of a payments service by Reliance Jio. Paytm may explore antitrust action against some of these companies, they said.
“Paytm will use every tactic it can to hold off WhatsApp,” a partner at one of India’s top three law firms said, on condition of anonymity. “Pallavi is one of the best antitrust lawyers in India. And the CCI is going to get a lot more active in the start-up and internet space. It is not surprising that Paytm has appointed her. They would like to have the option of exploring any antitrust issues and Pallavi is the best lawyer to advise them on it.”
To be sure, Shardul Amarchand Mangaldas already has close links with Paytm. The firm represented Paytm in the $1.4 billion fund-raise from SoftBank Group Corp. last year. Additionally, many large companies in India appoint established lawyers on their boards. Shroff is on the board of several companies including Maruti Suzuki and Apollo Tyres.
Interestingly, Shardul Amarchand Mangaldas also works with Facebook India on privacy law issues. Many law firms represent rival companies by assigning different partners.
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