 "digital competition Bill")
Big Tech firms such as Google, Apple, Flipkart, Amazon, and Uber have opposed ex-ante regulation while responding to the suggestions of the expert committee on digital competition law. While Twitter and Paytm are among those in favour, the latter in its stakeholder submission said it was in favour as long as only large digital enterprises with a critical mass were subject to the regulations.
The Ministry of Corporate Affairs had invited public comments on the expert committee report and the draft Bill.
While stressing that ex-ante regulation for the e-commerce sector may be untimely and excessive and may lead to over-regulation, Amazon said in its stakeholder submission that it was already heavily regulated by the foreign direct investment policy, which mandates that it can only act as an online marketplace and not as a seller, and that it should provide fair terms to all sellers.
Apple India, while batting for a light touch regime that promotes innovation, said CCI should also consider opening a regional office in Bengaluru in order to get easy access to the technology ecosystem of the country.
Flipkart, on similar lines, has said that the existing ex-post regime in India is well-equipped to effectively regulate digital markets in India. “A one-size fits-all approach similar to the DMA model would be unsuitable for effective regulation of digital markets since it remains untested,” Flipkart’s response to stakeholders comment said. The etailer was referring to the European Digital Markets Act.
MakeMyTrip said that it was in favour of ex-ante regulation only to the extent that they were made applicable to select large horizontal platforms that have created economy-wide ecosystems.
The expert committee has recommended that the draft Bill should only regulate enterprises that have a ‘significant presence’ in the provision of a core digital service in India and the ability to influence the Indian digital market.
The discussion around the digital competition law comes amid a global scrutiny of Google, Apple, Facebook, Amazon, and others for allegedly abusing their market position using chunks of user data.
Last year, the Competition Commission of India (CCI) slapped Google with penalties of Rs 936.4 crore and Rs 1,337.8 crore in two separate cases.
The proposed Bill requires digital companies to notify the Competition Commission of India that it fulfills the criteria to qualify as a Systemically Significant Digital Enterprises (SSDE) based on the criteria set in the Bill.
Such enterprises would have to establish transparent and effective complaint handling and compliance mechanisms and report and operate in a fair, non-discriminatory, and transparent manner with end users and business users, according to the draft Bill.
SSDEs cannot directly or indirectly favour its own products, services, or lines of business, or those of related parties and also not use or rely on non-public data of business users operating on its core digital service.
“Such ex-ante regulation could potentially stifle innovation by imposing burdensome regulations on tech companies. This could lead to unintended consequences, such as reduced consumer choice and higher prices,” said Vaibhav Choukse, partner, JSA Advocates & Solicitors..
Key criterion
Systemically significant digital enterprises would be those with:
Key criterion
Systemically significant digital enterprises would be those with:
Turnover in India of not less than Rs 4,000 crore
Global turnover of not less than $30 billion
Gross merchandise value in India of not less than Rs 16,000 crore
Global market capitalisation of not less than $75 billion
At least 10 million end users for its core digital service
10,000 business users for its core digital service
