Tackling Collusion in the Digital Marketplace : Is the Competition Act Enough?

Concerns about how e-commerce poses a serious threat to the existing competition law regime has been raised by scholars as well as by regulatory authorities across the world, and the possibility of using algorithms to induce or facilitate tacit collusion has emerged as a serious issue. The Indian competition law, like the law in the US or the EU, requires some human element in the form of an agreement in order to hold the enterprises liable for engaging in concerted practice, but this legal framework is now facing a challenge – as algorithms digitally fix the prices without any interaction between the executives of the enterprises, it has become impossible to prove the existence of any anticompetitive agreement or anticompetitive intent on the part of the firms. Although this issue has not been debated much in the Indian legal context, the ongoing inquiry by the CCI into allegations of algorithmic price-fixing in the airlines industry has made it imperative to ask whether collusion using algorithms can be prosecuted under the existing laws in India. This paper explores the challenge posed by pricing algorithms to the existing legal framework in India, and evaluates whether the existing restriction on horizontal restraints in Indian law are enough to deal with a tacit collusion facilitated by algorithms