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The upcoming Digital India Bill is likely to have provisions for penalties against anti-competitive practices in digital space, and commercial arrangements such as tying and bundling of services by online intermediaries may be prohibited, sources said.
With a chapter on Open Internet, the new Bill would aim to ensure that internet-based services are provided in a non-discriminatory manner, a senior government official told Business Standard.
He added the provisions would also increase transparency in the functioning of the intermediaries.
The legislation may require all intermediaries to make arrangements in a way that access to their digital services is not made conditional with the use of any other service of the intermediary or any other person.
This, if enacted, may force several digital service companies – including the likes of Google, Apple, and Amazon – to make changes in their current business models.
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For instance, a mobile Operating System provider may not be able to charge users by bundling its services with a search engine.
The Ministry of Electronics and Information Technology (MeitY) has created a draft framework for the new Bill, to be proposed as a replacement for India’s primary digital law the Information Technology (IT) Act, 2000.
Though the draft is in its early stages, the government official said that it is in line with the broad principles of the law.
The new provisions are in line with a report by the Parliamentary Standing Committee on Finance on the Anti-Competitive Practices of Big Tech Companies, the official said.
The committee, in its 2022 report, highlighted a growing trend where digital firms compel consumers to purchase additional, often unrelated, services, creating an imbalance in pricing and stifling competition in the market.
The committee had recommended a separate digital competition law to rein in the unfair practices. However, the central government is yet to decide whether it would take ahead a draft Bill created by a 16-member inter-ministerial committee on the subject.
The committee noted that this creates asymmetry in pricing and leads to the removal of competition from the market.
It also enables leading players to leverage their market power from one core platform to another. It opined that SIDIs should not force businesses or end users to subscribe to any further services to be able to use their core platform service.
The Digital India Authority, which will be a government-appointed regulatory body for the digital space, would be able to refer any cases of violations to the Competition Commission of India (CCI) within 30 days.
It can do so if it is satisfied that prima facie the conduct of an intermediary in violation of the chapter and the conduct may create unfair grounds for competition in the relevant market.
The authority may refer such matters to the CCI after providing the intermediary a reasonable opportunity to be heard.
The Competition Commission of India last year fined Google for abusing its dominance in the Android mobile device ecosystem and unfair market conditions on Original Equipment Manufacturers by bundling its apps together and forcing OEMs to pre-install them.
Google’s appeal in the matter is pending before the Supreme Court.
