Digital Competition Bill unlikely to be tabled this year

India’s proposed law regulating select big tech platforms like Google and Facebook will not be tabled this year, according to persons informed about the development, as policymakers continue to search for consensus on its scope, the behavioural norms it should impose on firms and its implementation.

The 41-page draft on which the ministry of corporate affairs has secured public feedback earlier this year, will be ready for Parliament only next year, said one of the persons quoted above.

The ministry has referred the feedback received from stakeholders to the Competition Commission of India (CCI) for careful examination, said the second person. Both spoke on condition of not being named.

The CCI is currently discussing this internally but no unanimous view has been reached, said the person.

Resistance from Big Tech
The cautious approach comes amid resistance from Big Tech and some of the domestic industry bodies to a planned code of conduct or ex-ante regulation to prevent irreversible market tipping by influential digital players.

The current regime of investigating an anti-competitive practice after it has taken place thought to be both resource- and time- intensive in achieving market correction.

Asia Internet Coalition, which represents global tech firms, last year described the Parliamentary Standing Committee on Finance’s report proposing the new digital competition law as “prescriptive, absolutist and regressive.”

Tech industry body Nasscom in May this year told the government a new ex-ante provision requires more careful and in-depth examination of market realities and that it may be better to strengthen the existing regulatory framework before rushing into new legislation.

Industry concern
American Bar Association’s antitrust law and international law sections in May advised caution in introducing the new law, saying ex-ante regulation can play a useful role only where appropriate and if properly calibrated. One industry concern is that norms for ensuring fair markets should not stifle innovation or user-experience.

The proposed legislation has also raised questions over which ministry should administer the new law–the ministry of corporate affairs (MCA) which administers competition law or the ministry of electronics and information technology (Meity), which deals with the IT sector and has also held stakeholder consultation on the bill.

The ministry of Information and broadcasting on the other hand is looking into the need for a ‘bargaining code’ between digital news organisations and tech platforms like Google and Facebook as a statute separate from the proposed law.

Bargaining code
The bargaining code came out of complaints that digital platforms were grabbing the lion’s share of online ad revenues. This prompted the Parliamentary Standing Committee on Finance to propose a ‘bargaining code’ for news publishers and digital tech platforms to come to a revenue sharing arrangement.

But this is not part of the Digital Competition bill as there was no consensus in the government that this is a competition issue.

The scope of the bill has also emerged as a key debating point among policy makers.

“In its current form, it is believed to cover as many as 50 companies including domestic tech platforms in different verticals including cab aggregators and online market places for pre-owned goods, as against the original intent of covering only a handful of influential tech platforms or digital gate keepers,” the second person said, adding that this has raised concerns among domestic start-ups.

Mint had reported on 8 July that over a dozen top startups including Zomato, Myntra and Nykaa commanding millions of users and large revenues are likely to face stricter compliance standards under the proposed legal regime.

Cross-use of data
For large tech firms, a key concern in the bill is the prohibition of “inter-mixing or cross-using” of data from different services offered by them without user-consent—a provision aimed at ensuring a level playing field in the digital economy. Big tech firms believe this will come in the way of application developers monetizing their platforms, Mint reported on 24 April.

Queries emailed to the ministry of corporate affairs, ministry of electronics and information technology and ministry of information and broadcasting and to CCI on Friday and to Google and Meta on Saturday seeking comments for the story remained unanswered at the time of publishing.

There is a need to reconsider the question about the need for having an ex-ante law, said Amol Kulkarni, director of research at CUTS International, an India-based international non-government organization working on competition and public interest issues. “It should be examined if the existing competition regime could be strengthened for addressing concerns about digital markets for case-by-case assessments,” said Kulkarni. Livemint