How much can the Draft Digital Competition Bill address anti-competitive practices in the Indian e-pharmacy landscape?.—.IN 2018, Amazon acquired the online retail pharmacy PillPack for nearly a billion dollars. At the time of the acquisition, PillPack was expanding its already large operations in the American market..Simultaneously, Amazon secured wholesale pharmacy licences in three U.S. states. Shortly after, it set up its Covid testing labs and began offering virtual consultations throughout the country..Amazon's entry into the American healthcare market raised significant competition law concerns in the industry. It was felt that with its large resources, Amazon could undercut competitors to gain market share and raise the prices in the industry upon gaining dominance..These concerns stemmed from Amazon having successfully employed this strategy to the detriment of consumers in other industries..Similar apprehensions regarding potential market consolidation also exist within the Indian e-pharmacy market. Although over two hundred and fifty companies exist, the market appears to be controlled only by a few..As the e-pharmacy market grows, it is projected to be consolidated even more within these few companies. Such concentration in the market leads to fears of predatory pricing. These concerns are accompanied by uneasiness about other anticompetitive practices such as bundling offline diagnostic and consultation services and violation of users' health data privacy..“In 2018, Amazon acquired the online retail pharmacy PillPack for nearly a billion dollars..In this background, maintaining a competitive landscape in the Indian e-pharmacy market appears to be imperative for consumer welfare. With the publication of the Draft Digital Competition Bill in March 2024, here we discuss the potential implications of the ex-ante competition law framework on large Indian e-pharmacies..E-pharmacies and their competitive advantages .E-pharmacies sell pharmaceutical products and services in a virtual environment. Due to the internet's inherent scale, e-pharmacy platforms are able to reach a significant number of consumers. The expansive nature of their operations allows e-pharmacies to obtain economies of scale. Moreover, with the use of technology for medicine sales, data acquisition is also streamlined..Also read: Shaping the future of digital markets: The importance of ex-ante regulations.For consumers, e-pharmacies offer a convenient option for buying medicines. Moreover, consumers are able to benefit from lower prices given e-pharmacies' cost advantages..In its manifestation, lack of competition in digital markets can also result in higher prices, tying and bundling practices and violation of privacy due to the large influence of online companies..Despite its benefits, however, the e-pharmacy industry is marked by concerns about market concentration. Experience in other countries demonstrates that a few major companies can dominate the market and create barriers to entry..The present legal framework governing e-pharmacies.At present, there is no specific law on e-pharmacies in the country. Consequently, laws governing them are nested within existing legislation on medicine and e-commerce..The Drugs and Cosmetics Act, 1940 read with the Drugs and Cosmetics Rules, 1945 and the Pharmacy Act, 1948 regulate the manufacturing, sale and distribution of medicines in India..The Consumer Protection Act, 2019 and the Consumer Protection (E-Commerce) Rules, 2020 mandate accurate representations of products online for the benefit of the consumer..The Digital Personal Data Protection Act 2023 (DPDPA) is also applicable to e-pharmacies in relation to the collection and processing of personal data of users..In its provisions, the DPDPA requires obtaining the consent of users prior to personal data collection and maintaining adequate technical safeguards to prevent data breaches among mandating other safeguards for protection of personal data..“Concerns stemmed from Amazon having successfully employed this strategy to the detriment of consumers in other industries..Through recent decisions, courts have also sought to regulate online drug sales. In Zaheer Ahmed versus Union of India, the court issued a temporary injunction on unlicensed medicine sales..In T.N. Chemists and Druggists versus Union of India, e-pharmacies were ordered to suspend drug sales pending the government's implementation of the draft E-pharmacy Rules (2018)..Also read: An analysis of how ill-managed the Covid pandemic was in India.However, this Order was stayed due to the government's concerns of patient inconvenience and enforcement challenges. As of March 2024, the government has been given another six months to implement the draft E-pharmacy Rules..The Draft Digital Competition Bill (DDCB) could also regulate e-pharmacies. The DDCB introduces provisions to ensure fair competition online for large digital enterprises. For this purpose, it creates specific obligations on these enterprises to prevent anti-competitive behaviour. These obligations are based on the principles of fairness and transparency to the advantage of the consumer..Concentration in the e-pharmacy market: implications for consumers.The Indian e-pharmacy market has seen significant growth in recent years. In 2021, its value reached ₹25.50 billion with a projected compounded annual growth rate of 22 percent..As of 2023, private equity and venture capital firms have invested about US $ 2.6 billion in the market. With this growth, concerns about market dominance have also arisen..In 2023, a group of ministers was considering banning e-pharmacies due to concerns about predatory pricing and privacy violations. In 2024, the All India Body of Druggists and Chemists levelled similar allegations against e-pharmacies in their letter to the incumbent party..In the context of these developments, the implications for consumers in the e-pharmacy markets are highlighted below:.1. The ownership structure of major e-pharmacies raises concerns from a pricing perspective. For example, the two market leaders PharmEasy and Flipkart Health Plus are both backed by Tiger Global..Historically, overlapping ownership among competitors has resulted in price hikes through collusion. Unions of offline pharmacists and chemists have also accused e-pharmacies of employing capital dumping strategies. They say that with the availability of large foreign capital, e-pharmacies intend to attract consumers with lower prices with the goal of raising prices later..Also read: Some personal reflections on prison medical care.2. The unfair dealing of suppliers by e-pharmacies is also a concern from a competition law perspective. In the Amway case, large e-pharmacy platforms were accused of sourcing products from unauthorised channels..This sourcing was in contravention of manufacturers' compliance policies. Despite receiving notices from the manufacturer to stop the sale of its products, the large e-pharmacy companies did not comply..With their continued violations, the strong bargaining power of these e-pharmacies became evident. The issue was resolved only when the matter was taken to court. The violations also had implications for user safety as quality controls would likely be absent in such sourcing..3. Concerns also exist regarding the self-preferencing of white labelled medicines by large online platforms. Essentially, white labelling refers to the practice of rebranding products manufactured by other companies..Because of the availability of large consumer data, it becomes easier for e-pharmacies to copy the products sold on their platform with the e-pharmacy's branding. After successful imitation of these products, the e-pharmacies could promote their own products..In 2020, Amazon's e-commerce entity was accused of rigging its search to favour its white-labelled Solimo healthcare offerings. Furthermore, internal reports of the company suggested that popular products sold online were copied by the company..“For consumers, e-pharmacies offer a convenient option for buying medicines. Moreover, consumers are able to benefit from lower prices given e-pharmacies' cost advantages..Indian e-pharmacies such as Practo and Tata 1mg already sell white-labelled drugs. From the consumer's perspective, rigging search results would result in lowering of choice and impose a burden of high prices if existing manufacturers are driven out of the market..4. Concerns over tying and bundling practices by large e-pharmacies also raise significant competition law issues. After Amazon's acquisition of PillPack in 2018, the company began offering diagnostic and primary care services in 2021..Then, in 2023, it acquired a medical devices company. With vertical and horizontal market consolidation, apprehensions continued to exist about how overall healthcare prices could rise due to Amazon's consolidation. In India, the potential of tying and bundling offline consultations and diagnostic services has also raised concerns amongst industry experts..Also read: Why India needs urgent policy changes to combat the menace of antimicrobial resistance.5. Data privacy concerns also arise out of market consolidation. It has been argued that with more choice, users are empowered to choose products that offer greater privacy..Upon Amazon acquiring PillPack, patients complained of receiving unsolicited marketing calls from PillPack to transfer their prescriptions to PillPack from independent pharmacies..In India, multiple concerns have been raised regarding the violation of privacy by e-pharmacies for profit motives in similar ways..6. Additionally, broader consumer protection challenges need regulation within the e-pharmacy industry. As companies become dominant, possibilities of violations of such laws arise..In India, complaints regarding the sale of drugs without prescription and the presence of inflated maximum retail prices demonstrate the violation of consumer interests..These violations further underscore the need for effective anti-oversight to ensure fair competition and safeguard consumer interests..E-pharmacies in the context of the Draft Digital Competition Bill .Classification of an e-pharmacy as a systematically significant digital enterprise .The DDCB seeks to regulate large digital enterprises, which it calls Systematically Significant Digital Enterprises (SSDEs). Schedule I lists covered core services, including online intermediation services such as aggregation under Section 1(i)..The DDCB also makes a distinction between business users and end users. According to the Bill, business users are entities offering goods or services on the SSDE, while end users are defined as users that use the core services..Also read: How science can help make, assess and amend laws better: Lessons from 'legal epidemiology'.Given that large e-pharmacies are marketplaces, they can be covered as aggregators under the Bill. Its business users are those that list products on the e-pharmacies, while end users are those that use the core service of aggregation of medicines and other healthcare products and services..“Despite its benefits, however, the e-pharmacy industry is marked by concerns about market concentration. Experience in other countries demonstrates that a few major companies can dominate the market and create barriers to entry..Section 3 of the DDCB states that an enterprise can be classified as an SSDE if it has a major presence in providing that service within the country. The primary considerations for designating an entity as an SSDE include revenue, market value and user base thresholds..In case the necessary data for any threshold is absent, it will still be considered 'systemically significant' upon meeting any of the stipulated criteria. Additionally, the Competition Commission of India (CCI) reserves the right to designate an enterprise as systemically significant beyond these thresholds..In such situations, factors such as the enterprise's transaction volume, size, resources, user base can guide the commission's decision..Furthermore, the Bill acknowledges Associate Digital Enterprises (ADEs) that play a role in providing certain core services together with SSDEs, and regulates these enterprises. Digital enterprises are largely required to disclose all group entities involved in the delivery of core services..Currently, none of the e-pharmacy companies meet the revenue thresholds to be classified as an SSDE. Tata 1mg holds the largest market share in the e-pharmacy sector, with an annual revenue of ₹1,627 crore. At the projected growth rate, Tata1mg can be expected to become an SSDE in the next few years..Flipkart's Health Plus is the third-largest player in this market. Although Health Plus individually may not meet the SSDE criteria, Flipkart could be designated as an SSDE considering Flipkart's overall annual revenue across all its operating segments..Obligations of SSDEs.The DDCB introduces several obligations for SSDEs, which are vital to maintaining fairness and competition. If e-pharmacies are considered SSDEs, these obligations translate as follows:.Also read: World Consumer Rights Day: Consumer behaviour, technology and the law.Section 10 mandates SSDEs to ensure fair dealing with regard to its sellers. In its application, large e-pharmacies are prevented from unfairly favouring certain sellers or limiting consumer choices. This Section can also be seen as mandating SSDEs to create transparent policies..Section 11 prevents self-preferencing by SSDEs. The Section prohibits SSDEs from favouring their own or affiliated goods and services. Consequently, this Section ensures that searches are not rigged on e-pharmacy platforms, and all sellers and products get fair visibility..The first part of Section 12 restricts SSDEs from using 'non-public data' of third-party sellers or vendors operating on their platforms. In the context of SSDE platforms, non-public data refers to the confidential information on goods and services shared by the business users for listing purposes..“The Indian e-pharmacy market has seen significant growth in recent years. In 2021, its value reached ₹25.50 billion with a projected compounded annual growth rate of 22 percent..For e-pharmacies, this would imply not using acquired data to obtain an unfair advantage. In practice, this Section prevents the imitation of products by large e-pharmacies, which is a concern in anti-competitive markets..The second part of this Section prevents the 'intermixing' of the data for both end users and business users without their consent. In this way, the Bill imposes limitations on sharing personal and business data collected through the different services of an SSDE..Consent is interpreted as defined in the DPDP Act specifically for end users, while it is construed in broader terms for business users based on the context. Consequently, by mandating consent for data sharing, the Section creates an ex-ante basis for regulating privacy and data violations by dominant companies..Section 13 prohibits the restriction of third-party applications by SSDEs. SSDEs cannot restrict users from downloading, installing or operating third-party applications or tools on their platforms or devices..Also read: Will India be able to deal with Google's adtech monopoly?.In practice, e-pharmacies would be expected to allow free access to tools without imposing technical restrictions and allow data transfers. By allowing users to employ third-party applications, this Section prevents lock-in and promotes consumer shopping. With consumers able to shop for products, e-pharmacies would be deterred from imposing predatory pricing strategies..Section 14 creates an anti-Steering obligation for SSDEs. SSDEs cannot prohibit third-party sellers or vendors from communicating with or promoting their offers to end-users or directing them to alternative services or platforms..Consequently, in practice, e-pharmacy consumers will not be bound to the specific platform. This Section would also encourage consumers to shop around for products and deter e-pharmacies from imposing predatory pricing strategies..Section 15 addresses tying and bundling. SSDEs in the e-pharmacy sector are restricted from incentivising or requiring customers to use their own products or services exclusively..Broadly, in application, this Section would prevent tying and bundling of diagnostic and consultation services by e-pharmacy companies..Penalties.The DDCB imposes financial penalties of up to 10 percent of the global revenue for the SSDEs to enforce adherence..Additionally, the CCI is given powers to levy supplementary penalties for inaccurate reporting and to hold key managerial personnel liable..“In a competitive environment, e-pharmacies would be incentivised to offer higher-quality services at lower prices..Consequently, e-pharmacies designated as SSDEs will face large financial exposures in case of non-compliance..The competition commission's powers to hold an inquiry.According to Section 16 of the Bill, the CCI can initiate inquiries based on its own knowledge, the acquisition of such information by a person who has paid the stipulated fees, or through information received from the government..Also read: Supreme Court refuses Google interim stay against CCI's huge fine for abusing market dominance.While specific mechanisms for receiving such information are not yet available, the Section empowers both individuals and entities to share information with the commission on suspected violations..Conclusion.In conclusion, the DDCB 2024 introduces a comprehensive regulatory framework for digital markets. By designating certain large e-pharmacies as SSDEs and imposing ex-ante obligations, the Bill can address the above-mentioned concerns over potential anti-competitive practices in the Indian e-pharmacy landscape..In a competitive environment, e-pharmacies would be incentivised to offer higher-quality services at lower prices. At the same time, any eventual law must ensure that regulations under it are easily comprehended and enforceable so that users can take action to report alleged violations. Further, while consumer rights are protected, the implementation of such a law should not be arbitrary.
How much can the Draft Digital Competition Bill address anti-competitive practices in the Indian e-pharmacy landscape?.—.IN 2018, Amazon acquired the online retail pharmacy PillPack for nearly a billion dollars. At the time of the acquisition, PillPack was expanding its already large operations in the American market..Simultaneously, Amazon secured wholesale pharmacy licences in three U.S. states. Shortly after, it set up its Covid testing labs and began offering virtual consultations throughout the country..Amazon's entry into the American healthcare market raised significant competition law concerns in the industry. It was felt that with its large resources, Amazon could undercut competitors to gain market share and raise the prices in the industry upon gaining dominance..These concerns stemmed from Amazon having successfully employed this strategy to the detriment of consumers in other industries..Similar apprehensions regarding potential market consolidation also exist within the Indian e-pharmacy market. Although over two hundred and fifty companies exist, the market appears to be controlled only by a few..As the e-pharmacy market grows, it is projected to be consolidated even more within these few companies. Such concentration in the market leads to fears of predatory pricing. These concerns are accompanied by uneasiness about other anticompetitive practices such as bundling offline diagnostic and consultation services and violation of users' health data privacy..“In 2018, Amazon acquired the online retail pharmacy PillPack for nearly a billion dollars..In this background, maintaining a competitive landscape in the Indian e-pharmacy market appears to be imperative for consumer welfare. With the publication of the Draft Digital Competition Bill in March 2024, here we discuss the potential implications of the ex-ante competition law framework on large Indian e-pharmacies..E-pharmacies and their competitive advantages .E-pharmacies sell pharmaceutical products and services in a virtual environment. Due to the internet's inherent scale, e-pharmacy platforms are able to reach a significant number of consumers. The expansive nature of their operations allows e-pharmacies to obtain economies of scale. Moreover, with the use of technology for medicine sales, data acquisition is also streamlined..Also read: Shaping the future of digital markets: The importance of ex-ante regulations.For consumers, e-pharmacies offer a convenient option for buying medicines. Moreover, consumers are able to benefit from lower prices given e-pharmacies' cost advantages..In its manifestation, lack of competition in digital markets can also result in higher prices, tying and bundling practices and violation of privacy due to the large influence of online companies..Despite its benefits, however, the e-pharmacy industry is marked by concerns about market concentration. Experience in other countries demonstrates that a few major companies can dominate the market and create barriers to entry..The present legal framework governing e-pharmacies.At present, there is no specific law on e-pharmacies in the country. Consequently, laws governing them are nested within existing legislation on medicine and e-commerce..The Drugs and Cosmetics Act, 1940 read with the Drugs and Cosmetics Rules, 1945 and the Pharmacy Act, 1948 regulate the manufacturing, sale and distribution of medicines in India..The Consumer Protection Act, 2019 and the Consumer Protection (E-Commerce) Rules, 2020 mandate accurate representations of products online for the benefit of the consumer..The Digital Personal Data Protection Act 2023 (DPDPA) is also applicable to e-pharmacies in relation to the collection and processing of personal data of users..In its provisions, the DPDPA requires obtaining the consent of users prior to personal data collection and maintaining adequate technical safeguards to prevent data breaches among mandating other safeguards for protection of personal data..“Concerns stemmed from Amazon having successfully employed this strategy to the detriment of consumers in other industries..Through recent decisions, courts have also sought to regulate online drug sales. In Zaheer Ahmed versus Union of India, the court issued a temporary injunction on unlicensed medicine sales..In T.N. Chemists and Druggists versus Union of India, e-pharmacies were ordered to suspend drug sales pending the government's implementation of the draft E-pharmacy Rules (2018)..Also read: An analysis of how ill-managed the Covid pandemic was in India.However, this Order was stayed due to the government's concerns of patient inconvenience and enforcement challenges. As of March 2024, the government has been given another six months to implement the draft E-pharmacy Rules..The Draft Digital Competition Bill (DDCB) could also regulate e-pharmacies. The DDCB introduces provisions to ensure fair competition online for large digital enterprises. For this purpose, it creates specific obligations on these enterprises to prevent anti-competitive behaviour. These obligations are based on the principles of fairness and transparency to the advantage of the consumer..Concentration in the e-pharmacy market: implications for consumers.The Indian e-pharmacy market has seen significant growth in recent years. In 2021, its value reached ₹25.50 billion with a projected compounded annual growth rate of 22 percent..As of 2023, private equity and venture capital firms have invested about US $ 2.6 billion in the market. With this growth, concerns about market dominance have also arisen..In 2023, a group of ministers was considering banning e-pharmacies due to concerns about predatory pricing and privacy violations. In 2024, the All India Body of Druggists and Chemists levelled similar allegations against e-pharmacies in their letter to the incumbent party..In the context of these developments, the implications for consumers in the e-pharmacy markets are highlighted below:.1. The ownership structure of major e-pharmacies raises concerns from a pricing perspective. For example, the two market leaders PharmEasy and Flipkart Health Plus are both backed by Tiger Global..Historically, overlapping ownership among competitors has resulted in price hikes through collusion. Unions of offline pharmacists and chemists have also accused e-pharmacies of employing capital dumping strategies. They say that with the availability of large foreign capital, e-pharmacies intend to attract consumers with lower prices with the goal of raising prices later..Also read: Some personal reflections on prison medical care.2. The unfair dealing of suppliers by e-pharmacies is also a concern from a competition law perspective. In the Amway case, large e-pharmacy platforms were accused of sourcing products from unauthorised channels..This sourcing was in contravention of manufacturers' compliance policies. Despite receiving notices from the manufacturer to stop the sale of its products, the large e-pharmacy companies did not comply..With their continued violations, the strong bargaining power of these e-pharmacies became evident. The issue was resolved only when the matter was taken to court. The violations also had implications for user safety as quality controls would likely be absent in such sourcing..3. Concerns also exist regarding the self-preferencing of white labelled medicines by large online platforms. Essentially, white labelling refers to the practice of rebranding products manufactured by other companies..Because of the availability of large consumer data, it becomes easier for e-pharmacies to copy the products sold on their platform with the e-pharmacy's branding. After successful imitation of these products, the e-pharmacies could promote their own products..In 2020, Amazon's e-commerce entity was accused of rigging its search to favour its white-labelled Solimo healthcare offerings. Furthermore, internal reports of the company suggested that popular products sold online were copied by the company..“For consumers, e-pharmacies offer a convenient option for buying medicines. Moreover, consumers are able to benefit from lower prices given e-pharmacies' cost advantages..Indian e-pharmacies such as Practo and Tata 1mg already sell white-labelled drugs. From the consumer's perspective, rigging search results would result in lowering of choice and impose a burden of high prices if existing manufacturers are driven out of the market..4. Concerns over tying and bundling practices by large e-pharmacies also raise significant competition law issues. After Amazon's acquisition of PillPack in 2018, the company began offering diagnostic and primary care services in 2021..Then, in 2023, it acquired a medical devices company. With vertical and horizontal market consolidation, apprehensions continued to exist about how overall healthcare prices could rise due to Amazon's consolidation. In India, the potential of tying and bundling offline consultations and diagnostic services has also raised concerns amongst industry experts..Also read: Why India needs urgent policy changes to combat the menace of antimicrobial resistance.5. Data privacy concerns also arise out of market consolidation. It has been argued that with more choice, users are empowered to choose products that offer greater privacy..Upon Amazon acquiring PillPack, patients complained of receiving unsolicited marketing calls from PillPack to transfer their prescriptions to PillPack from independent pharmacies..In India, multiple concerns have been raised regarding the violation of privacy by e-pharmacies for profit motives in similar ways..6. Additionally, broader consumer protection challenges need regulation within the e-pharmacy industry. As companies become dominant, possibilities of violations of such laws arise..In India, complaints regarding the sale of drugs without prescription and the presence of inflated maximum retail prices demonstrate the violation of consumer interests..These violations further underscore the need for effective anti-oversight to ensure fair competition and safeguard consumer interests..E-pharmacies in the context of the Draft Digital Competition Bill .Classification of an e-pharmacy as a systematically significant digital enterprise .The DDCB seeks to regulate large digital enterprises, which it calls Systematically Significant Digital Enterprises (SSDEs). Schedule I lists covered core services, including online intermediation services such as aggregation under Section 1(i)..The DDCB also makes a distinction between business users and end users. According to the Bill, business users are entities offering goods or services on the SSDE, while end users are defined as users that use the core services..Also read: How science can help make, assess and amend laws better: Lessons from 'legal epidemiology'.Given that large e-pharmacies are marketplaces, they can be covered as aggregators under the Bill. Its business users are those that list products on the e-pharmacies, while end users are those that use the core service of aggregation of medicines and other healthcare products and services..“Despite its benefits, however, the e-pharmacy industry is marked by concerns about market concentration. Experience in other countries demonstrates that a few major companies can dominate the market and create barriers to entry..Section 3 of the DDCB states that an enterprise can be classified as an SSDE if it has a major presence in providing that service within the country. The primary considerations for designating an entity as an SSDE include revenue, market value and user base thresholds..In case the necessary data for any threshold is absent, it will still be considered 'systemically significant' upon meeting any of the stipulated criteria. Additionally, the Competition Commission of India (CCI) reserves the right to designate an enterprise as systemically significant beyond these thresholds..In such situations, factors such as the enterprise's transaction volume, size, resources, user base can guide the commission's decision..Furthermore, the Bill acknowledges Associate Digital Enterprises (ADEs) that play a role in providing certain core services together with SSDEs, and regulates these enterprises. Digital enterprises are largely required to disclose all group entities involved in the delivery of core services..Currently, none of the e-pharmacy companies meet the revenue thresholds to be classified as an SSDE. Tata 1mg holds the largest market share in the e-pharmacy sector, with an annual revenue of ₹1,627 crore. At the projected growth rate, Tata1mg can be expected to become an SSDE in the next few years..Flipkart's Health Plus is the third-largest player in this market. Although Health Plus individually may not meet the SSDE criteria, Flipkart could be designated as an SSDE considering Flipkart's overall annual revenue across all its operating segments..Obligations of SSDEs.The DDCB introduces several obligations for SSDEs, which are vital to maintaining fairness and competition. If e-pharmacies are considered SSDEs, these obligations translate as follows:.Also read: World Consumer Rights Day: Consumer behaviour, technology and the law.Section 10 mandates SSDEs to ensure fair dealing with regard to its sellers. In its application, large e-pharmacies are prevented from unfairly favouring certain sellers or limiting consumer choices. This Section can also be seen as mandating SSDEs to create transparent policies..Section 11 prevents self-preferencing by SSDEs. The Section prohibits SSDEs from favouring their own or affiliated goods and services. Consequently, this Section ensures that searches are not rigged on e-pharmacy platforms, and all sellers and products get fair visibility..The first part of Section 12 restricts SSDEs from using 'non-public data' of third-party sellers or vendors operating on their platforms. In the context of SSDE platforms, non-public data refers to the confidential information on goods and services shared by the business users for listing purposes..“The Indian e-pharmacy market has seen significant growth in recent years. In 2021, its value reached ₹25.50 billion with a projected compounded annual growth rate of 22 percent..For e-pharmacies, this would imply not using acquired data to obtain an unfair advantage. In practice, this Section prevents the imitation of products by large e-pharmacies, which is a concern in anti-competitive markets..The second part of this Section prevents the 'intermixing' of the data for both end users and business users without their consent. In this way, the Bill imposes limitations on sharing personal and business data collected through the different services of an SSDE..Consent is interpreted as defined in the DPDP Act specifically for end users, while it is construed in broader terms for business users based on the context. Consequently, by mandating consent for data sharing, the Section creates an ex-ante basis for regulating privacy and data violations by dominant companies..Section 13 prohibits the restriction of third-party applications by SSDEs. SSDEs cannot restrict users from downloading, installing or operating third-party applications or tools on their platforms or devices..Also read: Will India be able to deal with Google's adtech monopoly?.In practice, e-pharmacies would be expected to allow free access to tools without imposing technical restrictions and allow data transfers. By allowing users to employ third-party applications, this Section prevents lock-in and promotes consumer shopping. With consumers able to shop for products, e-pharmacies would be deterred from imposing predatory pricing strategies..Section 14 creates an anti-Steering obligation for SSDEs. SSDEs cannot prohibit third-party sellers or vendors from communicating with or promoting their offers to end-users or directing them to alternative services or platforms..Consequently, in practice, e-pharmacy consumers will not be bound to the specific platform. This Section would also encourage consumers to shop around for products and deter e-pharmacies from imposing predatory pricing strategies..Section 15 addresses tying and bundling. SSDEs in the e-pharmacy sector are restricted from incentivising or requiring customers to use their own products or services exclusively..Broadly, in application, this Section would prevent tying and bundling of diagnostic and consultation services by e-pharmacy companies..Penalties.The DDCB imposes financial penalties of up to 10 percent of the global revenue for the SSDEs to enforce adherence..Additionally, the CCI is given powers to levy supplementary penalties for inaccurate reporting and to hold key managerial personnel liable..“In a competitive environment, e-pharmacies would be incentivised to offer higher-quality services at lower prices..Consequently, e-pharmacies designated as SSDEs will face large financial exposures in case of non-compliance..The competition commission's powers to hold an inquiry.According to Section 16 of the Bill, the CCI can initiate inquiries based on its own knowledge, the acquisition of such information by a person who has paid the stipulated fees, or through information received from the government..Also read: Supreme Court refuses Google interim stay against CCI's huge fine for abusing market dominance.While specific mechanisms for receiving such information are not yet available, the Section empowers both individuals and entities to share information with the commission on suspected violations..Conclusion.In conclusion, the DDCB 2024 introduces a comprehensive regulatory framework for digital markets. By designating certain large e-pharmacies as SSDEs and imposing ex-ante obligations, the Bill can address the above-mentioned concerns over potential anti-competitive practices in the Indian e-pharmacy landscape..In a competitive environment, e-pharmacies would be incentivised to offer higher-quality services at lower prices. At the same time, any eventual law must ensure that regulations under it are easily comprehended and enforceable so that users can take action to report alleged violations. Further, while consumer rights are protected, the implementation of such a law should not be arbitrary.
