Indian startups have called for a separate Digital Competition Law with ex ante regulations, without which Big Tech would continue to have the upper hand. “In case of the absence of such law, bigtechs would be the biggest beneficiaries at the cost of Indian digital startups,” said a spokesperson for Alliance for Digital India Foundation (ADIF).
Its comments come at a time when the ministry of corporate affairs has set up a high level panel to review the existing Competition Act and the need for an ex-ante regulatory mechanism for digital markets through a separate legislation. Ex ante regulations means identifying issues in the market and making preventing regulations to address them.
Also Read: Reliance, Adani among 49 bidders for debt-ridden Future Retail
“Indian startups are seeking very basic rights, including the absence of conflict of interest, Big Tech not resorting to self-preferencing, non-bundling of particular services by Big Tech as announced by CCI in its latest order, thus leading to a fair, transparent and democratic internet ecosystem, to create a level playing field for Indian startups and to promote fair competition in the digital economy,” said ADIF, which is a policy think tank for digital startups.
ADIF noted that there has been clear recognition across the globe for the need of law for digital companies, defining the broad contours to restrict these abusive practices. The Digital Markets Act is already in practice in the European Union, wherein they have defined Big Tech as Gatekeeper firms, it said, adding that these nations have already initiated steps in that regard.
In India, the Parliamentary Standing Committee on Finance headed by BJP MP Jayant Sinha had also recommended a separate digital competition law with special provisions for Systematic Important Digital Intermediaries or Big Tech firms.
Also Read: JSW One Platforms raises Rs 205 cr from Mitsui at Rs 2,750 cr valuation
ADIF said the present system allows the rules of the game for Digital Internet Ecosystem to be defined by Big Techs unilaterally, without any negotiation power on the other side and the Indian startup ecosystem has to abide by them, which hurts them badly.
These practices include, restriction on use of third-party payment mechanisms; restriction on communicating with consumers using a particular app via email; charging of exorbitantly high service fee (as high as 30%) on app purchases, in-app sales and subscriptions and displaying warnings when a user attempts to install an app from a source other than the official app stores. It also includes forcing the Original Equipment Manufacturers or mobile phone makers to pre-install Big Tech apps and not permitting pre-installation of other apps to block out competition, it further said.
