Close on the heels of the Parliamentary Standing Committee on Finance tabling its report on “Anti-competitive Practices by Big Tech”, the House Panel has followed this up with the government, seeking an action-taken report from the latter within three months.
“The government is studying the report very carefully and once the internal deliberations are over, it will firm up its reply to the recommendations of the panel. If the government accedes to the recommendation, a standalone Bill can be introduced as early as monsoon session next year”, said a top source close to the development.
The Parliamentary Standing Committee on Finance headed by Jayant Sinha had in its latest Big Tech report — tabled in Lok Sabha on December 22– come up with a slew of recommendations on digital markets, including the introduction of a Digital Competition Act to ensure a fair, transparent and contestable digital ecosystem; identification of Systemically Important Digital Intermediaries (SIDI); adoption of definitions to ‘ex-ante’ regulate their behaviour and framing of regulatory provisions to ensure that ‘news publishers’ are able to establish contracts with SIDIs in a fair and transparent process.
With these recommendations before it, the Government has to take a crucial call on whether a standalone law for Digital Competition Act — on the lines of EU Digital Markets Act —needs to be enacted or whether the required changes to regulate Big Tech should be part of the current Competition Act itself.
Indications are that the Centre may go in for a separate Bill for enacting Digital Competition Act, sources said, adding that the current Competition (amendment) Bill 2022 may get derailed if an additional Chapter were to be introduced in the existing competition law.
The House Panel had noted that having a Digital Competition Act will be a boon not only for the country and its nascent start-ups economy but also for the entire world. Also placing obligation on Big Tech ex-ante would ensure a better playing field for start-ups, according to the panel.
On SIDIs, the panel has recommended that India must identify the small number of leading players that can negatively influence competitive conduct in the digital ecosystem, as SIDIs and adopt definitions to ex-ante regulate their behaviour.
The competitive behaviour needs to be evaluated ex-ante before markets end up monopolised instead of the ex-post evaluation being carried out at present, the panel has said.
Online news publishers
In a boost for news publishers operating in the online news media market, the House Panel has in its report called for “regulatory provisions” to ensure that news publishers get a “fair share” of the digital advertising revenues earned by big tech platforms from the content being monetised by them.
Regulatory provisions are required to ensure that news publishers are able to establish contracts with SIDIs through a fair and transparent process, said the House Panel report. Now it remains to be seen how the government will act on this recommendation and whether it would go in for legislative changes on the lines of New Media and Digital Platforms Mandatory Bargaining Code enacted in Australia, said experts.
Other recommendations
Besides casting mandatory obligations on SIDIs, the House Panel wants these SIDIs to report to CCI on compliance with mandatory obligations; all M&As in digital markets to be reported to CCI and separate Digital Markets Unit to be setup within CCI to review compliance by SIDIs, adjudicate on digital market cases.
Anti-steering provisions
Putting ex-ante obligations on SIDIs, the Committee recommended that SIDI should refrain from imposing anti-steering provisions upon business users of the platform.
Anti-steering provisions are clauses whereby a platform prevents the business users of the platforms from ‘steering’ its consumers to offers other than those provided by the platform that may be cheaper or otherwise potentially attractive alternative in terms of a better interface.
Similar obligations have been cast upon SIDIs with regards to self-preferencing/platform neutrality, bundling and tying, data usage, pricing/deep discounting, exclusive tie-ups, search and ranking preferencing, no installation or operation restrictions on third party applications etc. The panel recommended that SIDI should not process, for the purpose of providing online advertising services, personal data of end-users using services of third parties that make use of the services of the platform.
