O People! Make way for the latest horrendous development of the infamous year 2020. We have straight out of the oven, the freshest item on the menu of ethical conundrums “Vaccine Nationalism”.
It seems like the cure is as dangerous as people dying of the COVID-19. Currently, according to the WHO, six vaccines have reached phase 3 trials, while 25 vaccines are in the clinical evaluation phase and 139 in pre-clinical evaluation.
When the pandemic hit different parts of the world, the first response of the humans was to attack supermarkets and hoard loads of groceries (yes, toilet papers too). Vaccine Nationalism is just analogous to hoarding toilet papers, except, it’s just a phenomenon that occurs when rich countries pay for vaccines in advance and hoard them. Don’t worry politicians are not doing what they did not promise: remember ‘America first?’ and ‘India first?’
A global initiative by WHO – ACT (Access to COVID-19 Tools) Accelerator- aims at a cumulative process of R&D, manufacturing, regulatory, purchasing and procurement needed to fight against COVID-19. Unfortunately, the USA, Russia, India, and China did not receive the initiative with much-needed enthusiasm. The WHO also came up with another program called COVAX facility, that aims to provide 2 billion doses of vaccine by the end of the next year for middle and low-income countries.
The US compared its operation ‘Warp speed’ to the oxygen masks dropping during the flights. Russia tried to jump ahead, attempting to create a Sputnik moment. Russian President announced Russia curated the first COVID-19 vaccine called Sputnik V. The vaccines are still under trials and need much more necessary testing to work. Safe to say, Russia’s plan backfired earning them international scorn.
Vaccine nationalism will lead to global dysfunction. Rich countries will benefit as they can bid for the vaccine at high prices. Such high prices will lead to a disaster for the low-income countries, adding to their already deficient health care. These desperate countries will have no choice but to buy vaccines driving their economies in an even worse condition. Additionally, a single country having a vaccine will not help the problem in any way at all. Some nations have already gambled their chances of acquiring vaccines by speaking against other countries.
The unethical practice of Vaccine Nationalism is not at all unexpected. A bid against humanity is not entirely new. Similar responses were noted in 2009 when the world H1N1 flu crisis hit. Australia came up with a vaccine and sold 6,00,00 doses to the USA, blocking the exports to other countries. Once the effect of flu started diminishing, rich countries donated the vaccines to low-income nations. A similar situation happened in 2014 when the EBOLA crisis hit.
Politics aside, scientists are staying out of it and trying to work together for greater good. Instead of publishing research papers they are working collaboratively throughout the world. We must not forget that finding a cure or a significant role can earn a lot of scientists, assets, reputation, and promotions. Some lure away and are suspicious of sharing their work as well.
When the search for a vaccine against such deadly disease mutates into a naked display of Vaccine Nationalism, Indian Nobel Laureate Rabindranath Tagore’s view on nationalism becomes an antidote. He believed in an idea of nationalism without borders. Tagore once described in a letter to his friend AM Bose that “the value of patriotism can never be greater than the value of humanity.”
It is a human tendency to compete and nature supports the fittest. How fit is it though to use strong nations’ ability to bully other unequipped nations? How generous is it to help others when they don’t even need help anymore? How ethical and moral is to block vaccine procurement for other countries for monetary and economic benefits?
These are some of the questions lost in the drumbeats of Vaccine Nationalism which is echoing across the continents. It's high time that concerned citizens should demand answers from their respective government to come clean on the real motive behind the call for developing a vaccine for global pandemic in a silo, when it actually needs global cooperation.
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Are India's Antitrust laws effective at controlling monopolies?
On 15th of July 2020, Reliance Industries Ltd (RIL) held its annual general meeting of the shareholders. The chairman and managing director Mukesh Ambani, announced that global tech giant Google would be investing $4.5 billion in Jio Platforms. Facebook also has acquired a 9.99% stake in Jio Platforms. This is the first time in the world that both the global tech giants have invested in the same entity. These investments have boosted the confidence for Jio Platforms and also for India’s growth but there have been questions and speculations about the potential anti-competitive makeup of these deals.
The objective of this article is to explore the interpretation and the effectuality of Antitrust laws in India.
Anti-competitive practices are those business practices which firms engage in to emerge as the or one of the few dominant firms, who will then be able to restrict inter firm competition in the industry in a bid to preserve their dominant status. The Collins English dictionary defines antitrust laws as those laws that are intended to stop large firms taking over their competitors by fixing prices with their competitors, or interfering with free competition in any way. These laws focus on protecting consumer interests and promoting a competitive market. The word ‘Antitrust’ is derived from the word ‘trust’. A trust was an agreement by which stakeholders in several companies transferred their shares to a single set of trustees.
In present-day India, talking about market dominance Reliance Industries Ltd (RIL), resembles American company—John D Rockefeller's Standard Oil Company—of the early 20th century. Mukesh Ambani holds the highest ability to influence markets and policy in every sector in which RIL is present—petrochemicals, oil, telecom, and retail. Many industry experts and critics suggest that Ambani has used his political clout to twist the regulatory framework in his favor.
Gautam Adani, founder of Adani Group | Source: Twitter
Furthermore, economic power in aviation infrastructure is clustering into a few hands as well. In 2019, the Adani Group bagged the 50-year concession to operate all the six Airports Authority of India-operated airports—Lucknow, Jaipur, Guwahati, Ahmedabad, Trivandrum, and Mangaluru—which were put up for auction. The company also obtained a controlling stake in ‘The Chhatrapati Shivaji Maharaj International Airport, Mumbai’ from GVK Airports. Moreover, Adani Group is now set to construct the Navi Mumbai International Airport. The group is now eyeing Indian Railways while they have already established an alarming monopoly in green energy and sea ports. While Airports are natural monopolies, one private company controlling more than 8 important airports is not good news to airlines.
India has established antitrust laws to promote competition. For 40 years, India followed the Monopolies and Restrictive Trade Practices Act 1969 (MRTP). This act was based on principles of import substitution and a command-and-control economy. However, over time several amendments had to be made to the act. In 2002, the Indian approved a new comprehensive competition legislation. This is called the Competition Act 2002. The act focused on regulating business practices in order to prevent practices having an appreciable adverse effect on competition (AAEC) in India. The act primarily regulates three types of conduct: anti-competitive agreements (vertical and horizontal agreements), abuse of a dominant position, and combinations such as mergers and acquisitions. The act lists out the cartel agreements that it intends to prevent. This list includes price-fixing agreements, agreements between competitors seeking to limit or control production, market-sharing agreements between competitors and bid-rigging agreements. These agreements are called “cartel” arrangements.
The competition Act is enacted by the Competition Commission of India (CCI), which is exclusively responsible for the administration and enforcement of the Act. It comprises a team of 2 to 6 people appointed by the government of India. The CCI has previously handled high-profile cases. In 2018, CCI imposed a fine of Rs135.86 crore on Google on the grounds that Google misused its dominant position and powers to create a search bias. In another important case, the CCI, ordered a probe into Idea, Vodafone and Airtel when Reliance Jio owner Mukesh Ambani lodged a complaint against the three for forming a cartel and denying Jio the POI required for network connection, causing multiple call failures. The Cellular Operator Association of India was also probed for encouraging the same.
In some cases, the Competition Commission has been successful in tackling activities that are against the free competitive market. However, critics and economists believe that the act is now unable to adapt to the changing business environment in e-commerce, telecom, technology and the government’s role in distorting competition. Demonetization and GST drove the formalization of the economy. One consequence of them was that bigger, better organized players gained at the cost of smaller ones with lesser resources. The Insolvency and Bankruptcy Code (IBC) was designed to solve the problem of non-performing assets (NPAs) of banks. But consequentially, it has also led to a consolidation in many sectors.
However, CCI has expressed inability to consistently adjudicate punitive measures due to obligation in several cases. This points to the loopholes in the very provisions of the Competition Act 2002. In an Economic and Political Weekly (EPW) article, Aditya Bhattacharjea—an Economist—argues that even though the 2002 Act represents an improvement from the MRTP Act which was extremely restrictive, the present act also remains riddled with loopholes and ambiguities. According to Bhattacharjea, this creates unnecessary legal uncertainty, which acts in advantage of lawyers and law firms. For instance, the act allows the CCI to leave some scope of flexibility for “relative advantage, by way of contribution to the economic development.” Bhattacharjea argues that this may allow large firms to justify their anti-competitive practices in the name of development.
Mark Zuckerberg and Mukesh Ambani having online interaction after Facebook invested in Jio Platforms | Source: NDTV
Data portability plays a significant role in determining market power of certain firms. In 2017, the CCI closed cases against both WhatsApp and Jio involving allegations of predatory pricing and privacy violations. In both these decisions, the regulator did not consider the restrictions around data portability as a competitive advantage. The possible data leveraging advantage for the attempted monopolization could be the ‘portfolio effect’. Portfolio effect refers to increasing the range of brands, by bundling of telecom or messaging service and other service offerings or illegal vertical restraints, even predatory pricing. This in turn may lead to greater ability of further leveraging, deterring innovation and results in degradation of quality. Another possible advantage is explained as the theory of leveraging. The best example of leveraging is when Microsoft entered the media-player market by extending its quasi-monopoly on the operating systems market by taking advantage of the indirect network effects. In case of Facebook acquiring 10% of Jio’s shares, it is a concern that both entities could potentially use WhatsApp’s market dominance in telecom and social networking services and establish dominance in e-commerce market through anticompetitive acts.
There was a consensus among Indian policymakers at the time of the 1991 economic reforms that economic liberalization would eliminate the nexus between the business elites and the policymakers. On the contrary, the relationship between these two groups got further strengthened.
On the other hand, few critics and industrialists argue that extreme restrictions on growing companies hampers the progressive growth of the national economy. While RIL’s Jio looks like a cause for concern, the company has also saved Rs. 60,000 crores for annual savings in India. In addition to that, the entry of Jio to the telecom industry has led to a rise in data consumption and improved accessibility and affordability of the internet across the nation.
However, the concern still lingers as the question of whether this growth is a result of actual innovation or crony capitalism remains unsolved.
However, the fact that telecom, organized retail, ports and airports have two or three players controlling the bulk of the sector needs to be addressed. A healthy competition is quintessential for long-term growth and innovation. Harmful trade practices and cartelization does not only affect small manufacturers but also the general public.
The government, CCI and other lawmakers must closely examine the present laws and provisions and need to see if they are required to amend the act.
