The Indian startups now oppose the draft views prepared by the Internet and Mobile Association of India (IAMAI).
The draft will be submitted to a committee examining the requirement for a separate law in case of competition in digital markets. According to the startups, the IAMAI seems to favour big tech platforms.
In a drafted note given out among the members, the IAMAI showed many observations made in December 2022. This was in a report of the Parliamentary Standing Committee on Finance on anti-competitive practices by big tech companies. They plan to write to the Committee on Digital Competition Law to raise these issues.
The association, representing Indian startups and big tech platforms, asked its members to respond with their comments by the 1st May, 2023.
The Indian startups were already accusing the larger Internet firms, for example, Google, of anti-competitive practices. The Competition Commission of India is already hearing a petition against the in-app purchase policy of Google. An alliance of Indian startups filed it. The Madras High Court is hearing a similar case filed by Matrimony.com (a matchmaking platform).
The Government made the Committee on Digital Competition Law in February this year. This was to examine the requirements for and draft a Digital Competition Act.
ET reported that the comments on digital competition law by the IAMAI favour Big Tech enterprises. It is not in the interest of Indian startups. Some Indian startups plan to meet over the next few days to prepare a communication opposing the IAMAI’s views.
The Economic Times reported that the Internet and Mobile Association of India’s members include big enterprises like Microsoft, Google, and Meta. It also includes Indian technological firms like Ola, Paytm, PhonePe, Byjus, and Unacademy.
In the note, the Internet and Mobile Association of India has flagged that the recommendation of the house panel of designating important digital intermediaries or a small number of players may negatively influence competitive conduct in the digital environment. Also, it may lack clarity, make underlying assumptions, and lack an evidence-based approach.
The industry body said, in its note, that by needing designated Systemically Important Digital Intermediaries to not provide preference to their products over the competitors, the house panel report seems to aim to protect the competitors and not the competitive process.
So, this can potentially affect consumer interest and distort competition in favour of the lesser efficient players.
The IAMAI mentioned in its draft note that the lack of a well-articulated policy objective and failure to have an evidence-based approach to identify the requirements for the regulation led to ambiguous and broad recommendations. This can restrain innovation, competition, and the benefit that aligns with the markets and users.
It also pointed out that the present regulatory framework allowed the Competition Commission of India to intervene as and when necessary without over-regulating the sector. So, an additional competition regulatory regime departing from the tested foundation of competition law is unnecessary.
It added that the committee should be cautious about creating a pre-emptive standard under the law as such an action may lead to errors because of the uncertainties associated with the market. Pre-emptive standards with rigid and size-based designation mechanisms sometimes risk harming innovation, investments, welfare, and consumer choice.