India panel recommends digital competition act

An Indian parliamentary panel recommended the government enact a digital competition act to regulate anti-competitive business practices by Big Tech companies on its platforms. There are reporting requirements on Systemically Important Digital Intermediaries among several recommendations made by the Panel.

Prime Minister Narendra Modi's government has had strained relations with many large technology companies, and New Delhi has been tightening the regulation of firms such as Facebook, YouTube and Twitter. These tech giants are facing scrutiny from the country's competition watchdog, the Competition Commission of India (CCI), over alleged abuse of the application market.

The Committee recommend that the government should consider and introduce a digital competition act to ensure a fair, transparent and contestable digital ecosystem, which will be a boon not only for our country and its nascent start-up economy but also for the entire world," the panel said in a report submitted in India's lower house of parliament.

The panel recommended the identification of top tech players as systemically important digital intermediaries to counter monopoly and warned they "must not favour its own offers over the offers of its competitors" when acting as mediators to supply and sales markets.

In India, Amazon and rival Flipkart are facing accusations of anti-competitive practices, such as promoting preferred sellers on websites and giving priority to listings by some sellers.

The Parliamentary Standing Committee on Finance headed by Jayant Sinha has in its latest Big Tech report come up with a slew of recommendations on digital markets, including the introduction of a Digital Competition Act to ensure a fair, transparent and contestable digital ecosystem; identification of Systemically Important Digital Intermediaries (SIDI) and adoption of definitions to ‘ex-ante’ regulate their behaviour and framing of regulatory provisions to ensure that ‘news publishers’ are able to establish contracts with SIDIs in a fair and transparent process.

The report comes amid a rising global scrutiny of Google, Apple, Facebook, Amazon, and others for allegedly abusing their market position using chunks of user data. Earlier this year, the Competition Commission of India (CCI) slapped Google, Facebook India, in its discussions with the parliamentary panel, saying: “By and large, data is not collected but actually generated by businesses as they build the ability to capture signals through their services and technologies. Any business is in a position to create its own data space in such a way.

The supreme court of India recently greenlighted the CCI’s probe into WhatsApp’s privacy policy update, related to allegations that it shares user data with its parent company Facebook’s advertising business.

Experts suggest, recommendations by the committee were a welcome step. “This demand (by the panel) is in keeping with the maturity of the Indian market. But… the regulations should not overburden the companies.

India has been able to cushion the effects of the economic slowdown due to the digital ecosystem. Thus, the regulations should strike a balance between avoiding unnecessary hurdles and unfair market conditions.