Given India’s digital ambitions, and the promise of a trillion-dollar digital economy, it could be said authorities concerned have been behind the curve when it comes to regulating the digital industry, with big tech often using the country’s burgeoning digital population as a testing ground for new apps, features, and other revenue earners. While great for their bottom line, it hasn’t exactly fostered an equal playground for other smaller, more local digital players.
The proposed draft Digital Competition Bill, which will hopefully lead to the Digital Competition Act, is the government’s answer to that situation, as it takes a leaf out of the book of the EU’s Data Act, and takes on global Big Tech.
According to Preetham Venkky, CDO at DDB Mudra Group, this is an endearing move by the authorities and definitely a step in the right direction. "However, it needs to be stated that there is still some uncertainty around the details in the proposed bill. In policymaking, the devil is always in the detail. This is the first iteration of the draft and there needs to be wide consultation with industry stakeholders, the wider public and others in firming up intent and defining all the parameters and consequences for breaking them."
Venkky adds, "Similar laws proposed elsewhere, for instance in EU, seem to be the inspiration for India's proposed bill. Despite good existing laws, we've seen big tech companies largely shrug off the fines as the cost of doing business. However, stringent laws with high compliance costs can be detrimental for smaller players, especially newer ones still navigating the digital ecosystem. India has seen tremendous success in combating digital ecosystem monopolies by introducing their own technology using the Digital India stack. My personal opinion is that India would see more success by combating competition by introducing a better product / solution rather than curbing incumbents using legislation."
According to Mitesh Kothari, Co-founder and Chief Creative Officer, White Rivers Media, the Digital Competition Bill (DCB) heralds a positive transformation in India's digital arena, echoing the EU's regulatory framework. “It promises heightened scrutiny for large digital platforms, potentially curbing anti-competitive practices and ensuring fair play. Despite initial concerns, it's a crucial step towards fostering innovation and safeguarding consumer rights.”
The bill prohibits large digital platforms, identified as Systemically Significant Digital Enterprises, from engaging in self-preferencing, restricting third-party apps, imposing anti-steering policies, misusing the data of business users, and bundling products and services.
Sandeep Saini, VP- Growth, Team Pumpkin, agrees that the Digital Competition Bill feels like a turning point. “It's long overdue for India to have a regulatory framework that levels the digital playing field. Increasing competition fosters innovation, which is essential to realizing our digital market's full potential. This could lead to increased consumer choice, improved data privacy measures, and a more dynamic digital economy.”
“Targeting Systemically Significant Digital Enterprises (SSDEs), the bill aims to level the playing field by curbing favouritism and protecting user data. Striking a balance between regulation and innovation is paramount for nurturing a dynamic digital ecosystem while championing consumer welfare. As we navigate this digital frontier, the DCB has the potential to be the beacon of progress, shaping a more equitable and competitive digital landscape,” says Kothari.
AS previously reported by exchange4media, according to the draft, an enterprise shall be deemed to be a Systemically Significant Digital Enterprise in respect of a Core Digital Service, if:
(a) it meets any of the following financial thresholds in each of the immediately preceding three financial years -
(i) turnover in India of not less than INR 4000 crore; OR
(ii) global turnover of not less than USD 30 billion; OR
(iii) gross merchandise value in India of not less than INR 16000 crore; OR
(iv) global market capitalisation of not less than USD 75 billion, or its equivalent fair value of not less than USD 75 billion calculated in such manner as may be prescribed
OR
(b) it meets any of the following user thresholds in each of the immediately preceding three financial years in India:
(i) the core digital service provided by the enterprise has at least one crore end users; OR
(ii) the core digital service provided by the enterprise has at least ten thousand business users.
“One potential pain point in the proposed regulations could be the challenge of accurately identifying and setting specific expectations for Significant Data Economy Entities (SSDEs), particularly if these firms are used to having greater flexibility. Perhaps the biggest obstacle to implementing the Digital Competition Bill may be striking a balance between regulation, innovation, and growth,” notes Saini.
While some critics say that the proposed Bill still doesn't have quite the teeth that EU's Bill allows its regulators, Girish Mallya, COO - Next Gen Publishing, and Editor and Publisher - T3 India says, “It’s a step in the right direction, we need to actively engage with all stakeholders for any new policy formulation.”