Matrimony.com, Innov8 Among Startups Backing Digital Competition Bill; Urge Action Against Big Tech

As many as 40 Indian startups have come together to express strong support for the draft Digital Competition Bill proposed by the central government in March 2024.

The startups including Matrimony.com, TrulyMadly, Innov8, QuackQuack, Magicbricks, Hoichoi, Medibuddy have written a letter to the ministry outlining their views on the draft, while supporting it to a large extent. The forthcoming legislation aims to curb the anti-competitive practices of major tech companies.

“The proposed Digital Competition Bill (DCB) outlined in the CDCL report resonates deeply with the startup community. We perceive it as a forward-thinking piece of legislation that directly addresses our long-standing concerns regarding monopolistic practices by dominant digital platforms,” the group of companies said in a letter to Manoj Govil, Secretary of the Ministry of Corporate Affairs (MCA).

In particular, the letter called out Google, Apple and Meta as having a dominant position in the technology industry and pointed out examples of competition-friendly regulations in other geographies.

“These practices 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,” the letter added.

Startups have urged the government to expedite the passage of the Bill and resist any delay tactics. Additionally, the group requested an upward revision of the thresholds for designating Systematically Significant Digital Enterprises (SSDEs), which would be targetted by the legislation.

They argue that the law should focus solely on the true gatekeepers of the internet—companies that have long held dominant positions and amassed extensive resources and influence to shape the digital ecosystem’s rules. By precisely targeting the new law, the government can curb monopolistic practices while ensuring that Indian startups have the space to grow domestically and compete globally.

“While we fully support the draft Bill, we propose a key revision regarding the thresholds for designating Significant Strategic Digital Entities (SSDEs). Our concern is that the current thresholds are low, and they are likely to – perhaps, inadvertently – encompass startups and other digital enterprises which are not gatekeepers. It could also severely hamper the growth potential of Indian startups and impede their ability to grow beyond Indian borders to compete globally,” the letter said.

Interestingly, many of the signatories of the letter were among the ones impacted by Google’s recent delisting of apps in India for non-compliance with the Google Play app store policy. On March 1, Google delisted the apps of some of the biggest Indian startups including Bharat Matrimony, Naukri, ALTT among others.

On the other hand, the potential law has also seen some concerns from the startup ecosystem. Notably, Zomato, Swiggy, Flipkart and Oyo have opposed some portions of the digital competition draft bill.

Recently, The Internet and Mobile Association of India (IAMAI) wrote to the MCA, expressing apprehensions that the draft Digital Competition Bill will have adverse effects on Indian startups and other digital enterprises.

The association highlighted that the criteria for classifying companies as “systemically significant digital enterprises” (SSDEs) is “subjective, all-encompassing and self-contradictory.”

Earlier this year, the Ministry of Corporate Affairs (MCA) released the draft Digital Competition Bill, 2024, for public consultation. Similar to the Digital Markets Act in the EU, this bill identifies large digital platforms and prescribes various obligations for them aimed at preventing anti-competitive conduct.

The draft bill is part of the report presented by the Committee on Digital Competition Law (CDCL), which was established by the government in February 2023 to examine and report on the need for a separate law to regulate competition in digital markets.

It also entrusts the big tech giants with a slew of obligations, spanning aspects such as prevention of fraud, cybersecurity, prevention of trademark and copyright infringement, compliance to local laws, among others.

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