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Chief Economic Advisor (CEA) V Anantha Nageswaran has said that implementation of certain regulations by regulators could perpetuate existing market dominance as he cited the data and privacy norms in the technology space. He emphasised that while competition drives innovation, there is also a distinction between competition and free markets. He pointed out that competition agencies must be mindful of the unintended consequences of their actions.

CEA said in the technology space, regulators implement data and privacy norms that guarantee users complete access to their data. In such situations, users can end up chasing only the large players since they place a great degree of trust in them. This will ultimately lead to loss of competition across similar platforms, concentrating power in the hands of few. He also said that excess competition itself would be undesirable, including in sectors like banking, insurance and securities.

Nageswaran further said competition factors that make other sectors more attractive can actually be a cause for systemic instability in these sectors, adding that regulators and competition agencies should keep an eye on systemic welfare or lack of it. He stated that banking and financial services sectors are subject to norms that promote competition among existing firms to keep interest rates fair and prevent market dominance by dominant institutions.