Algorithmic Collusion and Indian Competition Act: Suggestions to Tackle Inadequacies and Naivety

The debate around algorithmic collusion has gained substantial momentum leading to divergent views amongst economists. While some have expressed serious concerns over the menace of algorithmic collusion and its adverse impact on the competition, others have disregarded it as an unlikely threat. The common scepticism that emanates in any discourse concerning the regulation of the unique forms of algorithmic collusion is the inadequacy of the anti-trust legal framework to effectively tackle issues of detection, investigation and evidence-collection that is incumbent in the process of proving such collusion. Much of these apprehensions are attributable to the inconsistencies in the Indian jurisprudence concerning the elements of ‘hub-and-spoke’, ‘tacit collusion’ and the acceptable ‘plus factors’ required to establish the same. Further, the restrictive approach adopted by the anti-trust authorities in pronouncing judicial decisions impede the scope of the Competition Act, 2002 to address the algorithm problem in its present form. The paper reconnoitres the rise of algorithmic collusion and expounds on how algorithms in disguise of maintaining competitive balance can destroy competition. It further expounds how traditional notions of tacit collusion and hub-and-spoke should be reconstrued in the context of digital markets to bring algorithmic collusion within the sweep of Section 3 of The Indian Competition Act. It further offers an array of reforms and recommendations to adapt the Competition Law and to better equip the Antitrust Authorities to suit the changing needs of the digital market.