WT/GC/W/902  
 
13 October  2023 
(23-6921) Page: 1/5 
General Council  Original: English  
 
WORK PROGRAMME  ON ELECTRONIC COMMERCE  
PROMOTING COMPETITION  IN E-COMMERCE  
Communication  from India  
The following communication, dated 13 October  2023, is being circulated at the request of the 
delegation of India.  
 
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1  INTRODUCTION  
1.1.  The developed countries ' lead in digital infrastructure, easier and cheaper access to capital and 
skills in data collection, storage and processing has pro vided a first -mover advantage to their firms 
in e-commerce. Unlike conventional businesses, e -commerce companies are able to exercise a much 
wider and deeper span of control over business operations across geographies and business verticals 
cutting across functions, commodities and services verticals through digital platforms. The largest 
such platforms are increasingly investing in all parts of the global data value chain giving them a 
distinct comparative advantage, allowing them to transform into digital  corporations with a global 
reach. As per UNCTAD, their dominant position has strengthened further with the impact of 
the pandemic.1 
1.2.  On the other side of the spectrum, the ability of developing countries to export goods and 
services through e -commerce pla tforms, or even serve the domestic market through home -grown 
players, is limited on account of critical limitations such as access to capital and higher cost of capital, 
maturity and quality of digital infrastructure, level of technological development and  logistics 
maturity. Thus, in case of many of these countries, e -commerce businesses are largely run by a few 
major multinational companies mostly from the developed world. In this new configuration, 
developing countries and LDCs, in particular may find th eir data and its associated value capture 
being concentrated in a few global digital corporations and other multinational enterprises that 
control the data.  
1.3.  UNCTAD2 in its digital economy report highlights the highly uneven state of play in the data -
driven digital economy and postulates that the traditional digital divide between the developed and 
the developing countries, understood in terms of Internet connectivity, access and use, remains 
high, and is a recurrent challenge for development.  
2  FORMS OF MARKET POWER  
2.1.  Digital markets are characterised by the following typical forms of market power:  
1) Platform power3 – the market power of a firm in a multisided market based on network 
effects, a central role for data, and linkages across products, generating significant 
economies of scale and scope.  
 
1 UNCTAD , 2020, 'Coronavirus reveals need to bridge the digital divide '.  
2 UNCTAD , 2021, 'Digital Economy Report '.  
3 Bundeskartellamt, 2016, 'Paper on Platform Market Power - Results and Recommendations '; 
Bundeskartellamt, 2016, 'Working Paper - The Market Power of Platforms and Networks (Executive Summary) '; 
OECD, 2018, 'Rethinking Antitrust Tools for Multi -sided Platfor ms'; OECD, 2022, 'The evolving concept of 
market power in the digital economy: OECD Competition Policy Roundtable Background Note '. WT/GC/W/902  
 
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  2) Intermediation power4 – this power, on account of the role of a platform as an 
intermediary or a broker in bringing together different groups of consumers, is significantly 
important in the context of platform mon opoly, oligopoly and/or conglomerates, and 
information intermediaries with superior control over data.  
3) Bottleneck power5 – a monopolistic incumbent holds 'bottleneck ' power, as a point of 
congestion, to funnel attention of and access to consumers, limitin g the ability of rivals to 
compete.  
4) Portfolio power6 – generally in the context of conglomerate mergers where at least one of 
the firms has market power and the post -merger firm seeks to leverage that market power 
through bundling or tying products togeth er. 
5) Gatekeepers7 – the ability of large digital firms to "control access by a group of users to 
some goods or another group of consumers ". This could include controlling access by firms 
to their final customers based on the gatekeepers ' access to consumer  data, ability to 
maintain rankings and prominence and ability to control reputation.  
6) Strategic market status8 – few firms controlling market access by virtue of their position 
as a gateway or bottleneck in digital markets leading to higher prices and bar riers to entry 
and growth for entrepreneurs.  
 
3  IMPLICATIONS OF INCREASED MARKET CONCENTRATION  
3.1.  The increase  in market concentration in e -commerce has several implications for businesses, 
for consumers, as well as for regulatory authorities, as highlighted b elow:9 
1) Predatory pricing – digital markets are often subject to predatory pricing whereby the 
dominant firm provides goods/services below cost price, in an effort to undercut rivals and 
outcompete them. In fact, claims of predatory conduct have been one of the most frequent 
critiques levelled against e -commerce businesses.10 
 
2) Access to data – access to large amount of consumer data provides established online 
platforms with a competitive advantage. This data can be used for a variety of commercial 
purposes such as precision marketing, targeted advertisements and credit worthiness 
assessment, enabling these large digital companies to target consumers with tailor -made 
marketing content. In this manner, data generated by activity in one area  can provide a 
competitive edge for entering and expanding business in another area. Besides, access to 
this data also serves as a barrier to entry.  
 
3) Search bias/self - preferencing – influencing search and ranking preferencing is another 
mechanism which im pacts competition conditions in e -commerce markets. Algorithms are 
often used to introduce bias in favour of sponsored products, or orders fulfilled by the 
marketplace itself.  
 
4) Tying or bundling – customers are often required or incentivised to buy two or more 
distinct products as a combined sales package. Such practices adversely affect competition 
through the extension of market power from one market segment to another. Particularly in 
cases in which a firm has significant market power in one product mark et, bundling may 
distort competition in adjacent, otherwise -competitive segments i.e., leveraging power from 
one market to another.  
 
5) Margin squeezing – firms with market dominance lead to margin squeeze wherein the 
dominant firm with vertical integration h as the ability to "squeeze " the profit margins of its 
downstream competitors, through a combination of high access prices and low retail prices.  
 
 
4 Schweitzer et al., 2018, 'Modernising the law on abuse of market power '. 
5 Alexiadis P. And A. De Streel, 2020, EUI Workin g Papers 'Designing an EU Intervention Standard for 
Digital Platforms '; Scott Morton et al. 2019, 'Committee for the Study of Digital Platforms: Market Structure and 
Antitrust Subcommittee '  
6 Church, J., 2008, 'Conglomerate Mergers, American Bar Associati on, Antitrust Section ' 
7 Alexiadis P. and A. De Streel, 2020, EUI Working Papers 'Designing an EU Intervention Standard for 
Digital Platforms ' 
8 Competition and Markets Authority, 2021. 'A new pro -competition regime for digital markets ' 
9 17th Lok Sabha Standing Committee on Finance by Ministry of Corporate Affairs, 2022 -23, 'Anti-
Competitive Practices by Big Tech Companies ' 
10 OECD, 2019, 'Implications of E -commerce for Competition Policy – Background Note ' WT/GC/W/902  
 
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  6) Stifling innovation through free riding – large digital platforms are understood to engage 
in forced free -riding, in which "a platform appropriates innovation by other firms that depend 
on the platform for access to consumers ". Concerns have been raised that this practice 
discourages future downstream innovation.  
 
7) Exclusive agreements – in some instances, e -commer ce platforms enter into an exclusive 
agreement with a brand, allowing sales of the brand 's products, exclusively on their platform. 
This hampers not only the business of other e -commerce platforms but also adversely 
impacts brick -and-mortar sellers.  
 
8) Anti-Steering – Prominently associated with 'App stores ', anti -steering provisions are 
clauses, whereby, a platform prevents its business users from steering its customers to 
payment offers other than those provided by the platform.  
 
9) Adverse impact on MSMEs – contrary to the narrative that e -commerce will benefit SMEs 
and make trade more inclusive, the ground reality is that these high levels of concentration 
that exhibit huge economies of scale and scope, benefit from 'network effects ', and have 
access to vast amounts of user data and their monetisation has resulted in the exclusion of 
new entrants including SMEs of most developing countries to compete in the digital economy. 
SMEs face considerable challenges in selling their products through online retail platforms 
where the platform owner can also function as a vendor. Some of these challenges include 
platforms squeezing the profits of vendors by keeping some of their sale value; leveraging 
their access to data of vendors and consumer s for identifying popular and profitable 
products; compelling vendors to purchase additional services; manipulating search 
listings,  etc. 
 
4  CHALLENGES BEING FACED BY COMPETITION REGULATORS  
4.1.  While competition regulators seek to define the market as a first st ep to regulation, the nature 
of digitalization  itself is to widen the economies of scope or number of potential markets. The 
economies of scope (requiring judgements as to how far market power in one of those markets 
extends into the others) and economies of scale (through huge investments which set high barriers 
to entry for potential competitors) increase the complexity for competition authorities.  
4.2.  Most developing countries have relatively new and small competition authorities with limited 
resources  for taking on competition cases in an increasingly concentrated global economy.  
4.3.  Based on a report of UNCTAD ,11 several competition authorities, including those of Argentina, 
Colombia , Pakistan, Russia and Türkiye, have emphasized the difficulties of using conve ntional 
competition tools based on prices and consumer welfare to handle emerging competition issues in 
the digital economy. Besides, competition authorities such as those of Brazil, Indonesia, Kenya, 
Russia and Türkiye have reported that standard economic  analysis mechanisms and traditional 
competition tools, such as market share and increase in price test, were insufficient in cases involving 
digital platforms.  
4.4.  There is a spectrum of opinions on the way forward for competition policy in digital markets, 
with broad agreement on the fact that existing frameworks are inadequate to deal with emerging 
challenges. It is understood that many countries are exploring potential changes to existing 
frameworks, with envisaged measures ranging from transparen cy and non -discrimination to possibly 
rendering it illegal to exist and act in both the business layers.12   
5  SOME NOTABLE REGULATORY MEASURES ADOPTED OR UNDER CONSIDERATION 
BY MEMBERS  
5.1.  Recognising  that competition laws in general may not suffice to deal wit h anticompetitive/unfair 
business practices in the e -commerce space, several countries have sought to adopt measures to 
promote competition in this sphere.  
 
11 UNCTAD, 2021, 'Competition law, pol icy and regulation in the digital era. UNCTAD Secretariat ' 
12 WEF, 2019, White Paper 'Competition Policy in a Globalised, Digitalised Economy ' WT/GC/W/902  
 
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  1) In the USA,13 the Senate Bill for the Digital Platform Commission Act of 2023 has been 
introduced  with the objective of providing oversight of digital platforms, in order to promote 
competition and protect consumers. The Bill provides for the creation of the Federal Dig ital 
Platform Commission, empowered to provide comprehensive regulation of digital platforms. 
The purpose of the Commission is to regulate digital platforms, consistent with the public 
interest, convenience, and necessity, and the Commission would be enabl ed to impose 
penalties, conduct investigations, designate important digital platforms with specific 
obligations and promulgate new rules.  
 
2) The EU14 has enacted the Digital Markets Act (DMA) to put an end to unfair practices by 
online platforms  designated a s "gatekeepers ". These are digital platforms which provide an 
important gateway between business users and consumers and have the power to act as a 
private rule maker. It includes entities offering online intermediation services such as app 
stores, online search engines, social networking services, certain messaging services, video 
sharing platform services, virtual assistants, web browsers, cloud computing services, 
operating systems, online marketplaces, and advertising services. The DMA defines the 
obligations to be fulfilled by gatekeepers including prohibiting them from engaging in certain 
behaviours. The Digital Markets Act , coupled with the Digital Services Act (The Digital 
Services Act package), aim to create a safer digital space where the fundament al rights of 
users are protected and to establish a level playing field for businesses.  
 
3) In Germany ,15 the amendments to the competition law are based on the concept of strategic 
market status. The amendment allows the German competition authorities to des ignate a 
firm as one of paramount significance for competition across markets based on criteria 
including its dominant position on one or several market(s); financial power; degree of 
vertical integration; access to data relevant for competition; and relev ance of activities for 
third party access to supply  and sales markets and its related influence on the business 
activities of third parties. The German competition authority has the power to prohibit certain 
types of conduct including self -preferencing, us ing data as an entry barrier, and inhibiting 
data portability and interoperability etc.  
 
4) Japan ,16 in February 2021, enacted the Act on Improving Transparency and Fairness of 
Digital Platforms, to improve transparency and fairness in transactions. The Act requires 
digital platforms  to disclose relevant information; establish appropriate internal proced ures 
to ensure the fairness of transactions or to settle disputes with users; and submit annual 
self-assessment reports to the Minister of Economy, Trade and Industry.  
 
5) In UK,17 the Digital Markets, Competition and Consumers Bill (DMCC) aims to enhance 
consumer protection  and regulate competition in the digital markets. Among other 
provisions, the Bill seeks to identify and designate  firms as having strategic market status 
(SMS) in respect of a digital activity.   
 
6) The unified  e-commerce legal framework of ASEAN18 envisages that by 2025, ASEAN will 
ensure that competition policies clearly address digital cross border activities and have 
continued application in a digital setting.  
 
7) In India , the Competition Commission of India (CCI) has taken various measures for 
addressing anti -competitive practices of dominant e -commerce players, through both 
enforcement of the Competition Act, 2002, as well as competition advocacy amongst 
e-commerce players. In recent times, there has been a steady rise in cases exa mined by 
CCI pertaining to novel issues pertaining  to new age markets e.g. , anti-steering provisions, 
self-preferencing/platform neutrality, deep discounting, search and ranking preferencing, 
denial of market access, tying and bundling, etc. In this contex t, the Government of India, 
with a view to provide regulatory certainty and trust -based business environment, amended 
 
13 US Congress Bill 2023, https://www.c ongress.gov/bill/118th -congress/senate -bill/1671  
14 European Commission, 2022, Press Release on 'Digital Markets Act: Rules for Digital Gatekeepers to 
ensure open markets into Force ' 
15 OECD, 2022, 'The Evolving Concept of Market Power in the Digital Economy '- Note by Germany. OECD   
16 UNCTAD, 2021, 'Competition law, policy and regulation in the digital era '- UNCTAD Secretariat.   
17 UK Parliament, 'Digital Markets, Competition and Consumers Bill ' 
https://publications.parliament.uk/pa/bills/cbill/58 -03/0350/220350.pdf   
18 ASEAN, 2022, 'Work Plan on the Implementation of ASEAN Agreem ent on Electronic Commerce ' WT/GC/W/902  
 
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  the Competition Act in 2023, introducing key amendments pertaining to broadening the 
scope of anti -competitive agreements, penalty indexed  to global turnover, and strengthening 
the anti -trust enforcements, amongst other provisions. Further, for the purpose of 
preventing unfair trade practices in e -commerce, the Government has notified the Consumer 
Protection (E -Commerce) Rules, 2020, under t he Consumer Protection Act, 2019. The 
Government of India has also set up an expert panel to examine the need for an ex -ante 
regulatory mechanism for digital markets through a separate legislation based on the 
recommendations of the report of the Standing Committee on Finance (2022 -23) of the 
Indian Parliament, on Anti -Competitive Practices by Big Tech Companies. Another 
noteworthy initiative is the Government 's Open Network for Digital Commerce (ONDC) which 
seeks to provide a level playing field in the e -commerce space. The ONDC is based on open -
sourced methodology, using open specifications and open network protocols independent of 
any specific platform. The ONDC is expected to make e -commerce more inclusive and 
accessible both for consumers and small busi nesses going beyond the current platform -
centric digital commerce  market.  
6  CONCLUSION  
6.1.  E-commerce has a potential to drive future economic growth. However, the benefits of this 
growth are currently unevenly divided in favour of few large MNCs. In these circumstances, unless 
due care is taken, the benefits of e -commerce would be limited only to a few who are already in a 
position to take advantage of the growing e -commerce market.  
6.2.  Various countries are in the process of exploring how to face these formida ble challenges and 
which domestic policies would need to be framed to provide the necessary support for enabling 
domestic players to come up and have their fair share of the market. Regulators in different 
jurisdictions working within different legal and c onstitutional frameworks often have different 
approaches  to cope with these challenges. However, the global nature of the internet and online 
digital businesses makes close collaboration between regulators imperative. In this context, it is 
notable to ment ion that many countries have signed international cooperation MoUs at 
bilateral/multilateral levels, relating to competition enforcement cooperation.19   
6.3.  The 12th Ministerial Conference of the WTO decided to reinvigorate discussions under the Work 
Programm e on Electronic Commerce (WPEC), particularly in line with its development dimension. 
Given the importance of addressing competition related issues for the purpose of ensuring equitable 
distribution of the benefits of digitalisation, focussed discussions o n this matter, including sharing of 
Member experiences, would be useful, particularly for developing countries and LDC Members.  
7  GUIDING QUESTIONS  
7.1.  In light of the above, Members are requested to share their experiences, comments and 
suggestions on the subject. Some of the guiding questions are set out below:  
1) What are Members ' experiences in promoting competition in digital markets?  
 
2) How can Members enhance cooperat ion between their regulatory authorities so as to 
promote competition in e -commerce?  
 
3) What constraints are being faced by developing countries including LDCs in the adoption and 
use of policies to ensure competition in the e -commerce space? Can initiatives  be taken to 
build their capacity and capability?  
 
4) What role can be played by the WTO in promoting competition in e -commerce?  
 
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19 OECD, 2022, 'OECD inventory of international co -operation agreements between competition agencies 
(MoUs) '. https://www.oecd.org/competition/inventory -competition -agency -mous.htm