The proposed Digital Competition Bill by the government to curb anti-competitive practices by large technology companies could hurt India’s growing digital economy comprising MSMEs and startups that heavily rely on digital services for their operations and growth, said a survey on Monday by public-policy think tank The Dialogue.
The draft bill, which was released in March this year, with provisions such as restrictions on tailored ad placements and prohibitions on bundled services could disrupt operational efficiency, the survey report said.
According to the survey comprising over 300 respondents, the majority of whom are MSMEs (96 per cent) and startups (89.6 per cent), 71.6 per cent of respondents said they foresee adverse impacts on their advertising reach if personalized ad placement capabilities were curtailed.
47.7 per cent said they anticipate challenges if bundled services like integrated payment systems or special promotional deals were restricted.
The survey suggested “a balanced approach to regulating digital markets.”
“Rather than introducing blanket regulations, targeted measures focusing on specific anti-competitive practices are recommended. Leveraging the existing enforcement capabilities of the Competition Commission of India (CCI) could address concerns in a more flexible and context-sensitive manner,” it added.
Highlighting the critical role of digital services for MSMEs and startups, the survey said 82.2 per cent of respondents cited increased market effectiveness and 76.4 per cent noted improvements in business expansion capabilities.
Respondents also emphasized cost optimization as a pivotal advantage offered by digital services. 69.1 per cent of respondents noted reduced customer acquisition costs and operational expenses, while 64 per cent cited better returns on marketing investments.