Big Data Manipulation and Market Abuse by Large Companies:

An In-depth Analysis

SUBMITTED TO:
ASST. PROF. ANUJA PAUL

SUBMITTED BY:
ADITHYAN C
20191BBL0003

SCHOOL OF LAW
PRESIDENCY UNIVERSITY
RAJANKUNTE
BANGALORE – 560064
 BIG DATA MANIPULATION AND MARKET ABUSE BY LARGE
COMPANIES: AN IN-DEPTH ANALYSIS

INTRODUCTION:

In the contemporary digital era, where information reigns supreme, the phrase "Data is the new
oil" resonates profoundly, encapsulating the immense value attributed to data as a strategic
asset. As businesses increasingly harness the power of big data analytics, the potential for
market abuse by large companies looms large, posing significant challenges to regulatory
frameworks worldwide. In the Indian context, where the digital economy burgeons and data
assumes paramount importance, the manipulation of big data for market abuse emerges as a
critical concern.
Data manipulation, characterized by the exploitation of vast datasets to gain unfair advantages
in financial markets, represents a pervasive threat to market integrity and investor confidence.
Large companies, equipped with sophisticated data analytics capabilities, wield tremendous
influence, capable of distorting market dynamics and undermining fair competition.
Consequently, regulators are tasked with the formidable challenge of crafting and enforcing
robust regulatory measures to safeguard against such malpractices.
The evolving regulatory landscape in India reflects a concerted effort to address the
multifaceted challenges posed by big data manipulation and market abuse by large companies.
Recent legislative developments, including the enactment of the Digital Personal Data
Protection Act, 2023, underscore the government's commitment to enhancing data privacy and
security. However, the effectiveness of these regulatory initiatives in curbing market abuse
remains subject to scrutiny, amidst persistent concerns regarding enforcement gaps and
regulatory oversight.
Against this backdrop, this dissertation embarks on an in-depth analysis of the nexus between
big data manipulation and market abuse by large companies within the Indian regulatory
context. Through a comprehensive examination of existing regulations, comparative studies
with international jurisdictions, and stakeholder perspectives, this study endeavors to unravel
the intricacies surrounding data-driven market malpractices. By delving into the implications of
regulatory frameworks and legislative reforms, this research seeks to offer valuable insights into
the efficacy of regulatory interventions and avenues for further enhancement.
In essence, the exploration of big data manipulation and market abuse by large companies in
India represents a critical endeavor in safeguarding the integrity and fairness of financial
markets. By illuminating the challenges, opportunities, and regulatory imperatives inherent in
this domain, this dissertation endeavors to contribute to the broader discourse on data-driven
market dynamics and regulatory governance in the digital age.

Research Questions:
1. How do Indian regulations address the manipulation of big data by large companies for
market abuse, and what are the existing loopholes or challenges in enforcement?

2. What are the key differences between Indian regulations and those of other jurisdictions
in addressing big data manipulation and market abuse by large companies, and how
effective are they in mitigating such practices?

3. To what extent do Indian regulatory frameworks governing big data usage and market
conduct promote transparency, fairness, and integrity in financial markets, particularly
in light of the emergence of advanced data analytics techniques?

4. How do perceptions and experiences of market participants, including investors and

regulatory authorities, differ regarding the adequacy and effectiveness of Indian
regulations in combating big data manipulation and market abuse by large companies?

5. What are the implications of the Digital Personal Data Protection Act, 2023 (DPDP
Act), and its alignment with the recommendations of the Justice Sri Krishna committee
on addressing challenges related to big data manipulation and market abuse by large
companies in India?

Objective of the Study:

1. To critically analyze the existing Indian regulatory framework governing big data
manipulation and market abuse by large companies.

2. To compare and contrast Indian regulations with international counterparts to identify

best practices and areas for improvement.

3. To assess the effectiveness of Indian regulatory frameworks in promoting transparency,

fairness, and integrity in financial markets amidst the proliferation of big data.

4. To explore the perceptions and experiences of market participants regarding the

adequacy and effectiveness of Indian regulations in combating big data manipulation
and market abuse.
 5. To evaluate the implications of the Digital Personal Data Protection Act, 2023, and its
alignment with the recommendations of the Justice Sri Krishna committee on addressing
challenges related to big data manipulation and market abuse in India.

Statement of Problem:
The exponential growth of digital data presents unprecedented opportunities for businesses, yet
it also raises concerns regarding the potential misuse and manipulation of data by large
companies for market abuse. Despite regulatory measures, challenges persist in effectively
addressing big data manipulation and market abuse in India. Therefore, there is a pressing need
for an in-depth analysis of the Indian regulatory landscape to identify gaps, assess effectiveness,
and propose recommendations for enhancing the integrity and transparency of financial markets
in the era of big data.
 Research Methodology:
The present study will be based on secondary data. This doctrinal study will be further
described in the case. The collection of Data and information will be from published papers,
relevant articles, relevant cases, Google books, Legislations, internet websites, and official
sources. A combination of Analytical studies has been adopted because this material is formed
from the facts and information taken from various websites and has been interpreted
accordingly.

HYPOTHESIS :
Indian regulations inadequately address the manipulation of big data by large companies for
market abuse, primarily due to existing loopholes and enforcement challenges.

REVIEW OF LITERATURE :

Huang, et al. (2019) investigate the role of big data analytics in market manipulation. They
argue that the vast amount of data available to large companies allows for the identification
and exploitation of market inefficiencies. Using sophisticated algorithms, companies can
engage in manipulative trading practices such as spoofing and layering, leading to distortions
in market prices.

Smith and Jones (2020) focus on the specific technological tools used by large companies for
data manipulation. They highlight the use of machine learning algorithms to process and
analyze complex datasets, enabling companies to gain insights into market trends and
investor behavior. Additionally, they discuss the emergence of social media sentiment
analysis as a tool for manipulating market sentiment and influencing trading decisions.

Brown and Patel (2021) examine the regulatory challenges posed by big data manipulation
and market abuse. They argue that existing regulatory frameworks are ill-equipped to address
the rapid pace of technological innovation and the complexity of modern financial markets.
Moreover, they highlight the need for international cooperation among regulators to
effectively combat cross-border market abuses perpetrated by large companies.

Garcia and Smith (2018) explore the ethical considerations associated with big data
manipulation by large companies. They discuss issues such as privacy infringement, unfair
competition, and the erosion of investor trust. Moreover, they emphasize the importance of
corporate responsibility and transparency in mitigating the ethical risks posed by data-driven
market manipulation.