An influential industry group representing the likes of Google, Meta and Amazon has expressed concern over the digital competition law recommended by an Indian parliamentary panel seeking to regulate their allegedly anti-competitive practices. latest escalation of tension between US tech giants and New Delhi.
The parliamentary standing committee on finance recommended last month that the government enact a digital competition law to regulate anti-competitive business practices by Big Tech companies on its platforms, prohibiting them from favorably promoting their own brands or not supporting third-party systems . The competition law, the panel said, “will be a boon not only to our country and its burgeoning startup economy, but to the entire world.”
Industry group Asia Internet Coalition said in a statement that the proposed digital competition law could harm digital innovation in India and affect companies’ investments in India and have “disproportionate costs” for consumers in the South Asian market. “The committee’s report is prescriptive, absolutist and regressive in nature,” it added.
India’s panel last month said its recommendation was systemically important to counter monopolies, warning that tech giants “should not favor their own offerings over their competitors’ offerings” when acting as intermediaries for supply and resale markets.
The parliamentary panel’s recommendation cites the EU’s proposed Digital Markets Act and the US Innovation and Choice Online Act and the Open App Market Act.
Industry group AIC said that both AICOA and OAMA “failed to win bipartisan support due to substantive disagreements and concerns about unintended consequences for consumers, growth and innovation. In short, there is no consensus that DMA-style ex ante legislation is the is the right way to address potential competition issues in the digital space,” the statement read.
India is the world’s second-largest internet market, attracting more than $75 billion in investment over the past decade from companies such as Google, Meta, Amazon, and investment retailers Sequoia, Lightspeed, SoftBank, and Tiger Global. New Delhi has enforced and proposed a number of policy changes over the past three years to bring greater accountability and fairness to the way the country’s tech companies operate in moves that have upset many American giants.
New Delhi is entering 2023 with more such policy changes, including a telecom law that would tighten the government’s grip on internet companies.
“We urge the government to first observe whether these overseas regulatory developments bring benefits that outweigh the costs. It is particularly important to note that the government has recently introduced two major bills, namely the Digital Personal Data Protection Bill and the Competition Amendment Bill (CAB), both of which are aimed at protecting consumers, preserving competition and promoting technological innovation, with a special focus on digital markets,” said Asia Internet Coalition.
“It is therefore critical to first understand the effects of these two bills on the digital ecosystem before introducing new legislative proposals.”
Google chief executive Sundar Pichai said last month that India was going through an important period as it drafted several key regulations claiming it would benefit from an open and connected internet.