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Stakeholders continue to oppose Digital Competition Bill at meet
Thinktanks and other stakeholders continued their opposition to the draft Digital Competition Bill (DCB) in the second meeting convened by the Union ministry of electronics and information technology on Wednesday.
Thinktanks and other stakeholders continued their opposition to the draft Digital Competition Bill (DCB) in the second meeting convened by the Union ministry of electronics and information technology on Wednesday.
They argued that prescribing certain anticompetitive practices of Big Tech as illegal was unnecessary and would negatively impact medium, small and micro enterprises (MSMEs) and start-ups in the country, lead to investor flight, and adversely affect market dynamics, four people aware of the matter said.
Only one participant in the discussion supported the bill and ex-ante regulation for competition in digital markets, but added multiple caveats.
The meeting, chaired by IT secretary S Krishnan, took place a day after a similar meeting with industry associations on Tuesday.
Wednesday’s meeting was attended by officials from MeitY and the Competition Commission of India, and representatives from Chase India, CUTS (Consumer Unity and Trust Society) International, Esya Centre, The Dialogue, Centre for Competition Law and Economics, Centre for the Digital Future, and Asia Group. Nikhil Pahwa, the founder of digital publication MediaNama, attended the meeting in his personal capacity. Saurabh Srivastava, co-founder of NASSCOM, chairperson of the Indian Angel Network, and a member of the committee on digital competition law (CDCL) that drafted the DCB, also attended the meeting on Tuesday.
The stakeholders asked if the DCB was actually needed and if extant regulation would suffice. They said that in most markets, ex-ante (prescriptive) regulation to rein in big tech companies was too new to gauge its impact on markets and consumers.
In the hour-long meeting, Srivastava stressed that any competition-related regulation must not adversely impact innovation in India, even as he underlined that the European Union’s Digital Markets Act (DMA) should not be treated as the gold standard because EU is a more mature economy and not the epicentre of innovation.
The representative from CUTS International also said that a law like the DMA would not have allowed something like the UPI to flourish.
Pahwa submitted that the DCB would adversely affect market dynamics and the start-up ecosystem. Both Pahwa and the representative from Asia Group told MeitY officials that the bill would cause funding for start-ups to dry up. Three people told HT that Pahwa cited two instances of regulatory impact on start-ups --- first, the Web 3.0 ecosystem of India moved to Dubai due to regulatory constraints; and second, MeitY’s AI advisory, which was eventually retracted and replaced, that required government approval for under testing AI models, led to uncertainty amongst founders of AI companies in India.
Pahwa also said that the DCB should be scrapped altogether, two people said. Others echoed him in tamer words.
CCLE, however, said that it supported ex ante regulation but said that implementation and regulatory capacity remained concerns. Despite its support for an ex ante law, the think tank pointed out that the 2019 report by the Competition Law Review Committee had said that India had adequate legal architecture to deal with digital competition but the CDCL’s report and draft bill, released in March 2024, departed from it. The representative from CCLE said that the CCI had found evidence of anticompetitive behaviour by Big Tech companies in its investigations.
Esya Centre and The Dialogue cited their respective studies on the issue to argue that the DCB would have an adverse impact on MSMEs, consumers and start-ups. Both said that restrictions on cross data usage, and tying and bundling of services would adversely affect consumers. The DCB forbids entities designated as “systematically significant digital enterprises” (SSDEs) from cross usage of personal data of end users collected from different core digital services such as cloud services, search engines, etc. It also forbids SSDEs from forcing or incentivising users to use multiple services that it offers. CUTS International also said that the DCB would severely impact the user interface (UI), creating unnecessary friction while accessing online services leading to customer drop-offs.
