The Parliamentary Standing Committee on Finance has urged the Union government to introduce a new digital competition law to reign in big tech players. The recommendation was part of a report – ‘Anti competitive practices by Big Tech companies’ – that was tabled in the Parliament on Thursday (December 22).
Calling for a revamp, the panel sought to give more power to the Competition Commission of India (CCI). The report suggested setting up of specialised Digital Markets units within the CCI to closely monitor big tech players and adjudicate on digital market cases. It also envisaged hiring skilled experts, attorneys, and academicians to curb anti-competitive behaviour of big tech companies.
The panel, which called tech majors such as Google, Amazon and Meta ‘digital gatekeepers’, highlighted a slew of ‘undesirable practices’ rampant in the digital economy and sought a code of conduct to prevent the abuse of their market dominance.
The report recommends defining big tech players as Systemically Important Digital Intermediaries (SIDIs) on the basis of revenues, market capitalisation and end users.
The committee also flagged a range of issues plaguing the digital ecosystem in India, including the exploitation of user’s data by tech giants to outdo smaller market players. Further, the panel drew attention to the practices of ecommerce platforms that are pushing their own labels at the expense of third-party brands listed on their platforms.
The committee presented fourteen recommendations, which are as follows:
- Digital Competition Act necessary to ensure a fair, transparent and contestable digital ecosystem
- The Union government should revamp the Competition Commission of India (CCI) and give more teeth to the watchdog
- Competitive behaviour of digital businesses should be evaluated before the markets end up being monopolised
- CCI should also define the concept of Systemically Important Digital Intermediaries (SIDIs) based on revenue, market capitalisation and end users of the ‘market winners’
- The government should identify the small number of ‘market winners’ that can negatively influence competitive conduct in the digital ecosystem
- SIDIs should not indulge in anti-steering provisions
- Digital platforms should maintain platform neutrality and should not favour their own products or subsidiaries on their sites
- A SIDI should not force users to subscribe to other services as a prerequisite for accessing the platform’s core services
- The digital intermediaries should refrain from cross-deployment of data from core services in other service(s) provided by the platform
- Digital platforms should intimate the CCI regarding any mergers or acquisition that have deep impact on the digital markets and give powers to a few players
- Digital platforms should implement measures to curb deep discounting tactics on their platforms
- SIDIs should prevent business users on its platforms from resorting to exclusive tie-ups owing to competition constrictions
- Digital intermediaries should provide distinctive terms related to ranking and search preferencing to enable digital firms to effectively reach right audiences
- Big tech companies should not bar third-party installations, except under certain conditions
- Regulatory provisions are necessary to ensure that news publishers are able to formulate contracts with digital intermediaries through a fair and transparent process
Chaired by Jayant Sinha, the committee comprises 20 Members of Parliament (MPs), including former communications minister Ravi Shankar Prasad, former finance minister P Chidambaram, BJP’s SS Ahluwalia, Congress’ Gaurav Gogoi, former minister of information and broadcasting Manish Tiwari, and AAP’s Raghav Chaddha, among others.
The report was formulated after taking inputs from industry stakeholders, government officials, big tech players, homegrown startups, digital advocacy groups, among others.
Meanwhile, India continues to see greater digital adoption owing to increasing smartphone and internet penetration.
Barely a day ago, the Reserve Bank of India (RBI) said that the country’s digital economy has grown 2.4X faster than the overall economy of the country between 2014 and 2019, rising from $107.7 Bn in 2014 to $222.5 Bn in 2019.
As of now, the ball is in the government’s court amidst a growing crackdown on big tech players. If the aforementioned recommendations are adhered to, the ensuing scenario could create problems for big tech giants, which are already under growing scrutiny in the country.