The IAMAI dubbed the draft provisions “an unfair imposition on digital companies."
The Internet and Mobile Association of India (IAMAI) has written to the Corporate Affairs Ministry, expressing apprehensions that the draft Digital Competition Bill will have adverse effects on Indian startups and other digital enterprises.
The association warned that the ex-ante regulations proposed under the Draft Digital Competition Bill will make businesses “untenable” and can “dry up venture investments in tech startups.”
The IAMAI dubbed the draft provisions “an unfair imposition on digital companies.”
Further, the IAMAI highlighted that the criteria for classifying companies as “systemically significant digital enterprises” (SSDEs) is “subjective, all-encompassing and self-contradictory.”
Under India’s existing ex-post competition regime, the Competition Commission of India keeps a check on anti-competitive practices in digital markets. The IAMAI argued that an overlapping ex-ante regime would not only increase their compliance burden but also lead to a significant increase in operational costs.
“Therefore, an additional competition regulatory regime, which departs from the well-tested foundation of competition law, is unnecessary and could lead to significant harm,”
the IAMAI said.
The comments came two months after the Ministry of Corporate Affairs sought feedback on the draft Digital Competition Bill submitted by the Committee On Digital Competition Law. An ex-ante approach would better equip the CCI to rule on competition matters for tech firms, said the Committee.
The recommendations, if implemented, would enable the CCI to “selectively” regulate large digital entities on an ex-ante basis.
The draft bill aims to curb the potential abuse of dominance and other antitrust practices, especially by big tech firms like Google and Meta (banned and designated as extremist in Russia).
It requires digital companies to self-designate themselves as SSDEs based on the criteria set in the bill and notify the CCI about the same.
Such enterprises will be under the obligation to institute a transparent grievance redressal mechanism and report and operate in a fair, non-discriminatory and transparent manner with end users and business users.
In March 2024, digital majors including Apple, Google, Amazon, Flipkart and Uber had opposed the introduction of ex ante regulation in India. Digital giants had criticized the Digital Competition Bill last year as well. According to them, the bill "may dampen digital innovation in India."
Over the last decade or so, the CCI has launched probes into 30 companies, including Google, Matrimony.com, UrbanClap, Meru Travel, Gmail, WhatsApp, Meta, Facebook, Flipkart, Zomato and MakeMyTrip.
Source: Inc42
