Now, CCI Joins Other Regulators To Keep A Check On Indian Fintech Space

At a time when the fintech sector is fighting regulatory issues, the Competition Commission of India (CCI) has initiated investigation against some players in the space to check if their ways of using technologies are impacting the competition.

CCI chairperson Ravneet Kaur told PTI that some fintech entities are being checked for tech-enabled anti-competitive policies.

“The CCI is conducting enquiries into some entities in the fintech sector. We are looking into how technology is being leveraged by fintech players and whether they are impacting competition in the market. The enquiries are going on,” Kaur said.

This comes amid the commission’s efforts to ensure an open digital space for fair competition. 

Kaur further said the commission is focused on probing big tech companies as well as various other sectors, including fintech and online intermediary service providers, to check for flouting of fair competition practice norms.

Kaur’s comments come days after it was reported that the CCI is working on the proposal of a digital competition law in the country to bring big tech players under its ambit. The law will likely see suggestions to prevent abuse of dominance and suggest measures to ensure neutrality of digital platforms and no search engine bias.

Kaur also pointed out that despite legal challenges in the regulatory landscape, the watchdog continues to monitor, assess, and take necessary action to ensure a competitive digital market. 

Meanwhile, in the fintech space, Vijay Shekhar Sharma led Paytm recently went through a major regulatory setback with the Reserve Bank of India (RBI) imposing restrictions on Paytm Payments Bank (PPBL). 

The central bank clamped down on PPBL on January 31, 2024, barring it from taking any deposits or credit transactions or top-ups in any of its customer accounts. The central bank also stopped Paytm Payments Bank from providing any other banking services, such as UPI facility and fund transfers, after March 15.

Besides, a parliamentary panel recently flagged dominance of Google Pay and PhonePe in the digital payments space. Together, these two players controlled an overwhelming majority of the total transactions processed on the payment network in 2023. 

The tussle between Indian regulatory bodies and big tech players like Google has been going on for the past few years.  In 2022, the Parliamentary Standing Committee on Finance urged the Union government to introduce a new digital competition law to reign in big tech players.

At that time, the panel had sought more power for CCI by setting up specialised Digital Markets units within the CCI to closely monitor big tech players and adjudicate on digital market cases.

In 2023, the CCI set up an in-house digital market data unit. This unit acts as a specialised interdisciplinary centre of expertise for Digital Markets with the composition of various officers from the different divisions and multiple streams of CCI.

Kaur told PTI that the unit is now functional within the CCI. 

CCI’s bid to democratise the digital market brought it face to face with Google earlier last month. Prompted by startups registering complaints of Google removing their apps from its play store, the CCI had ordered a probe into the tech giant’s contentious user choice billing system on March 15. 

Startups have been engaged in a four-year dispute with the tech giant regarding its alleged anti-competitive behaviour stemming from its dominance in the Android ecosystem and Google Play App Store.

Shortly after initiating the probe, the commission dismissed startups’ interim relief applications, citing their failure to meet the necessary criteria for grant of interim relief as propounded by the Supreme Court.

“There has been a lot of change and companies are realising that they cannot get away by indulging in anti-competitive practices. We are not only looking at enforcement actions but also advocacy efforts, and overall, there has been a positive impact,” Kaur said in response to a query about the impact on the market following the CCI’s major rulings against Google.

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