USIBC Opposes Digital Competition Bill

SUMMARY

The USIBC, which counts Google, Amazon, Apple, Meta, and Walmart among its members, has urged the MCA to rethink the draft Digital Competition Bill

The group compared the law to the European Union’s Digital Markets Act 2022 and said that the draft Digital Competition Bill is “much further in scope” than the EU’s law

In the letter, the USIBC argued that some of the restrictions proposed in the draft Bill for tech players will raise costs for the end users

The US-India Business Council (USIBC), which counts big tech giants like Google, Amazon, Apple, Meta, and Walmart among its members, has urged the Ministry of Corporate Affairs (MCA) to rethink the draft Digital Competition Bill submitted by the committee on digital competition law (CDCL). 

Citing a letter sent by the USIBC to the ministry, Reuters said that the group compared the law to the European Union’s (EU’s) Digital Markets Act 2022 and said that the draft Digital Competition Bill is “much further in scope” than the EU’s law.

The draft Bill, which aims to crackdown on the alleged anti-competitive practices of big tech companies and other systemically significant digital enterprises (SSDE), was opened for seeking public comments in March this year. 

In the letter, the USIBC argued that some of the restrictions proposed in the draft Bill for tech players will raise costs for the end users.  

“Targeted companies are likely to reduce investment in India, pass on increased prices for digital services, and reduce the range of services,” the letter read. 

Inc42 has reached out to the USIBC seeking comments on the development. The story will be updated on receiving a response. 

The intent behind the draft Bill is to introduce a sense of democracy to the digital space in India, where the US-based tech giants have big market shares.

To ensure fair competition in the evolving digital market, the draft Bill has proposed a slew of obligations, including prevention of fraud, cybersecurity, prevention of trademark and copyright infringement, compliance to local laws, among others, on the tech behemoths. 

The Bill defines SSDEs as entities that have a global market cap of $75 Bn, a global turnover exceeding $30 Bn and a base value of at least 1 Cr end users or at least 10,000 business users in India. 

“Large digital enterprises and their unique business models have prompted a variety of anti-competitive concerns that have been brought forth before the CCI. These include unilateral and opaque policies on search rankings, and anti-competitive usage of aggregated data,” as per the draft Bill.

One of the proposed measures in the Bill is barring SSDEs from accessing third-party data of end users and businesses.

The USIBC has raised concerns about the proposal to bar tech companies from using third-party data.The letter argued that the companies currently deploy third party data to launch new product features and boost security for users. Curbing this will increase the price for end users.

It is a common practice for digital native companies to sell user data to third party companies like advertising serving companies, including ad networks (“Advertisers”), allowing them display advertisements or provide other advertising services on their platforms. 

Interestingly, this isn’t the first opposition of the Bill. Earlier this month, the Internet and Mobile Association of India (IAMAI) expressed its apprehensions about the Bill, citing diverse effects on Indian startups and other digital enterprises.

Dubbing the bill as “an unfair imposition on digital companies”, the association said the ex-ante regulations will make businesses “untenable” and can dry up venture investments in tech startups. 

However, the Bill gives the Centre the power to exempt certain enterprises (startups) or classes of enterprises from the purview of the law. As a result, as many as 40 Indian startups have come out in support of the Digital Competition Bill. 

Last week, Matrimony.com, TrulyMadly, Innov8, QuackQuack, Magicbricks, Hoichoi, and Medibuddy submitted a letter to the corporate affairs ministry, outlining their support for the Bill as well as calling out the big tech companies for their dominant position. 

“The proposed Digital Competition Bill (DCB) outlined in the CDCL report resonates deeply with the startup community. These practices (employed by big tech players like Google, Meta, Amazon) have often stifled innovation, limited consumer choice, and hindered the growth of young businesses. The Digital Competition Bill, with its focus on ex-ante regulations, has the potential to be a game-changer for the Indian start-up ecosystem,” their letter read. 

The Bill also gives additional powers to the Competition Commission of India (CCI). It proposes to bolster its technical capacity to ensure early detection and disposal of cases, need for dynamic regulation making, among others. 

The developments come at a time when a number of big tech giants, including Google, Amazon, and Meta, are under the CCI’s radar for alleged violations of the country’s laws.

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