Home/ News / India/  Probing cartels a challenge in digital age, says CCI chief

NEW DELHI: Secure communication in the digital age has made it a challenge to bust cartels, as colluding businesses find it easier to share sensitive information on price and supply among themselves, Competition Commission of India (CCI) chairperson Ashok Kumar Gupta said.

“In this digital age, cartel investigations have become increasingly challenging as new forms of end-to-end encrypted messaging applications are being used by cartelists to communicate," Gupta said in a speech at an internal event shared by the regulator on Friday.

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The competition regulator’s concerns about modern means of communication is significant given that proving the existence of communication or a ‘meeting of minds’ among the colluding members is key to busting cartels. This is also true for establishing instances of bid rigging. For example, a phone call between the leaders of firms competing for a juicy public contract just before deadline for placing the bid followed by no contact for a long period would be a key evidence investigators will be searching for to solve the case.

Gupta urged in his speech to experts researching on cartels to come out with “a forensic toolkit for guidance of investigators and enforcers in investigating cartels in this era."

Cartels include associations of producers, sellers, distributors, traders or service providers who agree among themselves to limit or control the production or supply of items and manipulate prices. The threat of cartelisation is perceived to be high in industries such as cement where cross-holding among companies is high. Mint reported on 10 December that CCI has conducted searches on the premises of leading cement makers and of an industry lobby to find evidence of price collusion.

Gupta said CCI is keeping an eye on the competitive landscape of the country where technological innovations and disruptive technologies are on the rise.

The digital economy itself, where data-rich companies get an edge due to information asymmetry in the market pose a threat to competition regulators. Gupta said the rapidly evolving digital landscape is posing new challenges for competition law enforcers, questioning the traditional parameters of competition regulation. Given the fast evolving nature of the digital markets, the agencies need to quickly find remedies to deal with challenges arising out of new business models, he said.

Gireesh Chandra Prasad
Gireesh has over 22 years of experience in business journalism covering diverse aspects of the economy, including finance, taxation, energy, aviation, corporate and bankruptcy laws, accounting and auditing.
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Updated: 26 Mar 2021, 05:10 PM IST
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