Business as usual will not work in the post-pandemic times

Poor countries not only need vaccines and support, but also green technology to access new opportunities and new ways to break out of their vicious circle. However, for resilient economies to emerge, markets must operate fairly and equitably to benefit and protect the vulnerable. At the international level, we need strong level playing field rules as a mandatory condition. And, at the domestic level, these rules must be accountable, accountable and enforceable to regulate the conduct of large market players as well as the markets in which they operate.

In developing countries, especially because of the historical dominance of certain market participants, there has always been a deep suspicion of the skewness of every regulatory structure. Voices of protest are heard continuously demanding comprehensive and effective safeguards for the interests of consumers and other small market participants.

As if in a hurry to correct those old historical imbalances, developing countries have often looked to an essentially democratic but largely capitalist West for inspiration and guidance to reform their political and economic systems. Therefore, it was natural for them to emulate the competition laws of the West in general and America in particular.

However, to deal with their economic situation, competition authorities around the world are taking a liberal approach towards the application of competition law. This will be challenging for many officials, as the lens through which antitrust problems are viewed is transforming.

The widespread spread of the COVID pandemic across the globe has redefined the character and complexion of the market. We can understand the sheer importance and impact of this singular event on our lives from the fact that modern human history is trying to be divided into pre and post Covid eras and labeled as such.

This has coincided with the mass adoption of digital devices, which have become essential to the existence of modern life, and financial survival in particular. This is despite the unequal access to the Internet and constraints in the availability of the required hardware, software, etc. to all.

In line with the adage that one person’s poison is another’s flesh, the recent and unprecedented boom in e-commerce set by the pandemic has enriched digital players immensely. This is especially so in countries where e-commerce is dominated by large multinationals or elite domestic players working in collaboration with large multinationals.

This development has given rise to three disturbing developments that must be dealt with. First, because of their cross-border moves, along with complex patterns of ownership—ranging from parent-subsidiary formats to limited-liability partnerships and other exotic forms of equity holding—their operations remain relatively unfamiliar to local regulatory authorities. implement the task. Existing competition rules designed to provide an equal playing field.

Second, the unfair advantages that big players accrue from such situations obscure the competition regulatory environment, a phenomenon that is most noticeable in the e-commerce, telecommunications and fintech sectors. They have already started making huge profits at hefty margins, widening the already wide gap not only between rich and poor individuals across the globe but also between rich and poor countries.

While the common citizen of the world is struggling to keep body and soul together, these big players are celebrating field day in a way. According to reports from International Monetary Fund, Organization for Economic Co-operation and Development and other such credible agencies, they are registering a staggering jump in their profits, largely driven by the great misfortune of Covid.

The third problem is the lack of business in brick-and-mortar stores, some of which have been forced to close. While some large e-commerce companies are partnering with smaller retailers for last-mile delivery operations, such arrangements are yet to be scaled up substantially.

In addition, the bulk digitization of financial and other routine mass operations, requiring heavy doses of capital investment in high-tech software applications and digital enterprises, is taking a heavy toll on employment opportunities for the people at large, resulting in inequalities. and contributing. of income which is already clear.

Against such a rapidly building backdrop of widespread global crises and inequalities, marked by a rapid increase in rampant disguised unemployment and the centralization of wealth and market power in a few hands, we can hardly build and adopt Can rely on favorable conditions. An all-inclusive and sustainable model for economic development. We need innovative solutions.

Aparna Choudhary, policy analyst at Cutts, contributed to this article.

Pradeep S Mehta is the General Secretary of Cuts International