India’s ambitious plan to regulate its digital giants, including the likes of Google and Facebook, has hit a snag. The proposed law, aimed at preventing anti-competitive practices by powerful tech platforms, will not be introduced in Parliament this year. Policymakers are still grappling with key questions about the law’s scope, the specific behavioral norms it should impose on companies, and how it should be implemented.
The draft legislation, which was publicly circulated earlier this year by the Ministry of Corporate Affairs, is now expected to be ready for parliamentary consideration only in 2024. This delay stems from ongoing discussions and concerns raised by various stakeholders.
A significant hurdle lies in the widespread resistance from Big Tech companies and some domestic industry bodies. These groups have expressed concerns about the proposed “ex-ante regulation” – a framework that would proactively prevent anti-competitive behavior before it occurs. They argue that such regulation could stifle innovation and negatively impact user experience.
The existing regime of investigating anti-competitive practices after they occur is seen as a less effective and resource-intensive method of market correction. The Asia Internet Coalition, representing global tech giants, labeled the Parliamentary Standing Committee on Finance’s proposed digital competition law as “prescriptive, absolutist, and regressive.” The tech industry body Nasscom echoed these sentiments, calling for a more thorough examination of market realities before enacting new legislation.
Beyond the concerns from Big Tech, the proposed law has also sparked anxieties among Indian startups. The original intent of the legislation was to target a select few influential tech platforms or “digital gatekeepers.” However, the scope of the bill has expanded to encompass as many as 50 companies, including domestic platforms in various sectors like ride-hailing and online marketplaces for pre-owned goods.
This broader scope has raised concerns among Indian startups, who fear being subjected to stringent compliance standards under the proposed legal framework.
The legislation has also sparked a debate about which government ministry should be responsible for its administration. The Ministry of Corporate Affairs, which oversees competition law, is currently handling the bill, but the Ministry of Electronics and Information Technology (Meity) – responsible for the IT sector – has also held consultations on the matter. Adding further complexity, the Ministry of Information and Broadcasting is exploring a separate “bargaining code” between digital news organizations and tech giants like Google and Facebook, aimed at addressing complaints about platforms capturing a disproportionate share of online ad revenue.
The potential impact on data usage is another critical point of contention. The bill proposes prohibiting companies from “inter-mixing or cross-using” data from different services without user consent. While this provision aims to create a more level playing field in the digital economy, Big Tech companies worry it would hinder app developers from monetizing their platforms.
As the debate over India’s Digital Competition law continues, the question of whether an ex-ante regulation is truly necessary remains a crucial point. Experts like Amol Kulkarni, director of research at CUTS International, suggest that strengthening existing competition frameworks might be a more suitable approach for addressing concerns about digital markets. The future of this legislation and its impact on India’s tech landscape remain to be seen.
