Existing Competition Act sufficient for cloud market: CUTS

Civil society organisation CUTS International says that anti-competitive practices in the cloud services market can be addressed through targeted, evidence-based enforcement under the existing Competition Act or through technological interventions, rather than broad ex-ante regulation like the proposed Digital Competition Bill (DCB). The commonly cited anti-competitive practices among cloud services providers (CSPs) are vendor lock-in, interoperability, egress fees, software licensing practices, self-preferencing and switching barriers, CUTS notes.

The civil society organisation has released two reports - Competition Concerns in Cloud Services Market and Application of Indian Competition Law and [Over]Regulating Cloud Services: A Case for Restraint - that examine the competitive dynamics of India's cloud services market and assess whether existing legal and regulatory frameworks are sufficient to address emerging concerns.

The reports caution that premature regulatory intervention could have unintended consequences for innovation, investment and customer choice in India's rapidly evolving cloud ecosystem.

The CUTS reports want Competition Commission of India (CCI) to commission a market study for cloud services in India for a better understanding of the market structure and practices, and help identify areas of concern that merit interventions, including competition advocacy. Such a study will also help the CSPs and business customers self regulate and adopt pro-competition practices, it said. According to CUTS, the study outcome can also better inform the polity in considering whether to include ‘cloud services market’ in any ex ante regulatory framework that is presently discussed in India, it added. For easing technological barriers to competition, the reports propose international cooperation. “Since cloud markets operate across borders, such cooperation can prevent regulatory fragmentation and help adopt balanced standards that include interests of small CSPs. Further, other regulations in the digital space that apply to cloud services may also be analysed from a competition perspective. The digital personal data protection regime is one of the most important one in this regard, as it has a bearing on interoperability and data portability” the findings of CUTS reports said.

According to CUTS, the addition of the commitment and settlement provisions and establishment of the digital market unit in the CCI could considerably reduce the time taken for dispute resolutions. However, a better understanding of cloud services and market dynamics in the Indian context is good for better competition analysis as well as regulatory interventions, it adds.