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With less than ten days until the vote-on-account, start-ups are now looking up to the the Finance and Corporate Affairs Minister Nirmala Sitharaman for a roadmap in the Budget speech for regulating Big Tech with an ex-ante framework.
Start-ups are pinning their hopes on announcement of a separate digital competition law given the deadlock in the Digital Panel. The MCA-appointed 16-member Committee on Digital Competition Law (CDCL) has neither submitted its report nor has its tenure been extended beyond December 31, sources said.
CDCL remains divided on the necessity of a separate digital competition law in India.
Big Tech fears introduction of a new separate Digital Competition law may stifle innovation and strangulate the nascent industry.
If a new layer of competition regulation is introduced on the existing competition law and several new obligations are placed on SIDIs, then nobody would innovate,argued the Big Tech side.
Start-ups are, however, hoping that government would come to their rescue with a specific legal framework that would give them a level playing field against Big Tech and cast specific obligations on systemically important digital intermediaries (SIDIs).
New framework
Parliamentary Standing Committee on Finance headed by Jayant Sinha had, in December 2022, in its 53rd Report on “Anti-Competitive Practices by big tech companies” recommended that there is a need for an ex-ante regulation of anti-competitive practices by Big Tech companies in India.
The Standing Committee had also listed out ten areas/instances of anti-competitive practices that need to be addressed by the new framework. These are bundling and tying; anti-steering practices; deep discounting; platform neutrality; data usage; exclusive tie-ups; search and ranking; restricting third-party applications; mergers and acquisitions; and advertising policies.
For putting in place an ex-ante regulatory framework, the Parliamentary Panel had recommended that an approach similar to the European Union’s (EU) Digital Markets Act (DMA) be followed.
Post the emergence of “digital economy” and “internet economy”, achieving a fine balance between innovation and regulation has been an uphill task for most competition authorities across the world. India’s digital economy is slated to touch $1-trillion mark in 2025-26, according to government forecast.
Competition authorities across the globe are finding it increasingly difficult to effectively regulate “digital markets”.
This is because much of the current competition law principles have been evolved after decades of implementation in the traditional markets.
Competition authorities are therefore looking at enacting separate legislations aimed specifically at disciplining the “biggest players” in the digital markets.
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