Lowering data privacy protection by dominant entities can be construed as abuse of dominant position, according to Competition Commission of India (CCI) chairman Ashok Kumar Gupta.

“Lowering of privacy protection by dominant enterprises could be construed to be an abuse of dominant position and therefore fall within the ambit of antitrust as low privacy standards implies reduction in consumer welfare,” Gupta said during a virtual workshop on competition in the telecom sector, on Friday.

The comments came in the backdrop of WhatsApp’s revised privacy standards, the applicability of which were deferred on account of widespread backlash.

Further, the CCI could take up the issue of excessive data collection and whether such practices by entities could lead to anti-competitive behaviour, the chairman said.

“The commission can examine whether such collection of excessive amounts of data can be anti-competitive and thus scrutinize such conduct on a case-by-case basis,” Gupta said.

Given network effects, the access to data can become a significant entry barrier to digital markets as platforms can effectively act as gatekeepers and influence multiple markets by attracting online customers, according to Gupta.

The network effect is the phenomenon by which the value a user derives from a good or service depends on the number of other users of compatible services.

While acknowledging the efficiencies the network effect brings, “it is also undeniable that such network effects can also lead to increased switching costs deterring new players from entering the market,” Gupta said.

According to Anshu Prakash, secretary of the department of telecommunications, convergence of services in the telecom sector only increased the importance of data privacy and net neutrality. Prakash also virtually addressed the event.

“The issue of net neutrality is compounded by the convergence which is happening in broadcast, telecast, telecom and space technologies,” he said, adding, “There is also the issue of telecom security, covering both aspects, privacy of data and communication and security in terms of trap doors and back doors in telecom equipment.”

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