The Internet and Mobile Association of India (IAMAI), which includes Google, Meta* and Microsoft, believes that ex-ante regulation will disincentivise companies from scaling beyond a particular limit.
According to The Indian Express, a committee, which was set up by the Ministry of Corporate Affairs (MCA) in February, is considering proposing “ex ante” competition regulations for the digital space.
On Tuesday, Finance Minister Nirmala Sitharaman held a meeting with Rajeev Chandrasekhar, Minister of State for Electronics and IT, where they discussed various issues on the digital competition laws.
“PM Narendra Modi’s vision and goal of a $1 trillion and vibrant and rapidly growing digital and innovation economy requires global standard cyber laws – a framework that is future-ready and can adapt to new challenges, rapid changes and disruptions,”
Chandrasekhar said. He noted that the MCA's proposals need to be harmonized with the Digital India Act, which is under development.
The Digital India Bill 2023 aims to replace India’s existing Information Technology Act of 2000 and provide comprehensive oversight of the digital landscape. It seeks to address modern challenges like cybercrime, data protection, deepfakes, and online safety.
According to government sources, the upcoming draft of Digital India Bill, that the IT Ministry is in the process of finalizing, will include a separate chapter devoted to various competition issues in the digital space. In particular, it will establish broad-based principles related to the sector, including defining market power, and market imbalances.
Thus, India sees antitrust law as a key tool to check the dominance of big tech companies, as does the European Union, which has passed the Digital Markets Act (DMA).
In December 2022, the Standing Committee on Finance had proposed ex-ante regulations, category of systemically important digital intermediaries (SIDIs) and a new digital competition law to curb anti-competitive practices in digital markets. These digital intermediaries, according to the panel, should be classified based on their revenue, market capitalisation and number of active business and end users.
India’s current regulatory structure for competition issues follows the ‘ex-post’ approach, meaning that the regulator, the Competition Commission of India can only take action against an entity once anti competitive practice has been established. However, under the ‘ex-ante’ framework, companies will have to put in place mechanisms to prevent any abusive anti-competitive practices.
The Internet and Mobile Association of India (IAMAI) – whose members include companies like Google, Meta*, Microsoft, Netflix, as well as Indian technology firms such as Paytm, Ola, PhonePe, Unacademy, ShareChat and Byju's – earlier sent a note to the committee set up by the MCA, opposing ex-ante regulations for the sector, saying it will disincentivise companies from scaling beyond a particular limit.
The IAMAI's submission faced flak from some of the most prominent start-ups in the country, who labelled the IAMAI’s views as “propaganda” for big technology companies.
*Meta is banned and designated as extremist in Russia
Source: The Indian Express
