CCI has released a discussion paper called ‘blockchain technology and competition’ as per which the tech can pose challenges pertaining to jurisdictional, data protection and privacy, and competition.
The discussion paper noted that the decentralised and distributed nature of blockchain implies that there is no central authority that has command over it. This poses a challenge for CCI to enforce an order against any anti-competitive conduct in this area.
Further, CCI has also highlighted that in the case of any legal, policy or regulatory issue, it is difficult to understand which jurisdiction’s policies and regulations might apply.
Policymakers and regulators are also likely to face enforcement challenges in terms of identifying liable entities and penalising them for wrongful conduct. It is because network participants in case of permission-less blockchains may be anonymous or pseudonymous, the paper noted.
The discussion paper has also provided some broad-level guidance for various stakeholders in a blockchain ecosystem, including that blockchain applications should not be used to exchange competition-sensitive information among competitors.
It also noted that while designing the governance mechanisms of a blockchain, consideration should be made for the possible changes in compliance relating to any requests or orders issued by CCI.
The paper has been jointly prepared by EY and CCI.