By Trisha Shreyashi
The tech titans have attracted a gathering storm of probes for a while now. The anti-trust regulator, the Competition Commission of India (CCI) has been quite proactive in bringing the heavens down with antitrust investigations for about half a decade now, keeping the big tech on their feet.
In light of this backdrop, the Parliamentary Standing Committee on Finance led by Jayant Sinha has recommended an ex-ante digital markets antitrust regulation in its report titled “Anti-Competitive Practices by Big Tech Companies”.
The indigenous law proposed herein may form the bedrock for formulating India’s ex-ante regulation in the bid to tame these tech titans. It underscores the need for a forward-looking regulation than an ex-post evaluation-based regulation. The panel recommends that the regulator be equipped with a separate unit to tackle digital market cases, thereby revamping the commission.
The report identifies anti-steering practices, platform neutrality, bundling & tying, data usage, mergers & acquisitions, deep discounting, exclusive tie-ups, search & ranking, restricting third-party applications and advertisement policies are areas in need of urgent attention.
It acknowledges that digital businesses have rapidly diminishing marginal utility, and grow and gain the scale which leads to winner-takes-it-all outcomes. This means that digital markets tend to tip quickly and only a handful of players emerge in a short span. The report calls for a code of conduct for the tech giants so that they do not stifle competition with their market dominance. This would infuse a code of conduct-based ex-ante approach before the markets end up becoming monopolised.
It advises the designation of leading tech corporations as Systemically Important Digital Intermediaries (SIDI) for supply and sale. They shall notify the CCI of any potential concentrations in any of the proposed mergers. These digital market gatekeepers will be designated on the basis of sales, capitalization, end users and the number of businesses. However, it also cautions against the possible misuse of personal data of the end users, especially when mediating by recommending its own offers over offers of other competitors.
The European Union has also enacted the Digital Markets Act which aims for a fairer digital economy. The UK also confirmed bringing about the Digital Markets, Competition & Consumer Bill in the upcoming year.
The panel’s report indicates that the GoI is on the precipice of passing ex-ante legislation to regulate digital markets which would meaningfully rein in big tech’s stranglehold on access to our information. Enacting dedicated legislation for the regulation of the digital economy thus seems to be the right step for a developing economy like India.
(The author is a lawyer, columnist and honorary member of the HBR Advisory Council. Views are personal.)