Implication Of Self-Preferencing On The Competition & Consumer Welfare
- IJLLR Journal
- Jul 4
- 1 min read
Rohinikrishna Nair, Manipal Academy of Higher Education
Giri Sankar, Manipal Academy of Higher Education
ABSTRACT
Currently we are living in a technologically advance era where the repercussions are often overlooked by the expediency. The digital platforms, (like e-commerce platforms Amazon or social media platforms like Instagram) takes up the crucial role in advertising, ensuring businesses reach their diverse target audience with the help of algorithms. Unlike traditional media, digital platforms offer flexibility in advertisement placement, format and targeting resulting in escalated growth in engagement and conversion rates. Additionally, it is also a cost-effective method. With the digital sector projected to contribute 20% of India’s GDP by 20261, regulatory frameworks like Draft Digital Competition Bill 2024 aim to curb anti-competitive practices. However, the major concern for regulators as well as policymakers is the existing practice of self-preferencing and the blanket ban which has been proposed in the bill that might adversely impact the innovation, market dynamics and consumer welfare. This is an act of dominance where the firm is promoting or favouring its own goods or services (often vertically integrated) over those of competitors leveraging the market power to do so. It is challenging for regulators to distinguish between self-promotion and self-preferencing. While the findings might reveal that the practice of self- preferencing is harmful and distorting the competition overly restrictive regulations might impact the growth in a sector crucial to India’s economic attributions. This research study is specifically focusing on the extent, impact and implications on the competition, product innovation and welfare of the consumers.
