Parl Panel Turns The Heat On Big Techs, Bats For Changes To Existing Competition Laws

Mounting yet another offensive on big tech giants, the Parliamentary Standing Committee on Finance urged the Committee on Digital Competition Law (CDCL) to formulate changes to the existing competition laws to ensure ‘market efficiency and fair competitive conduct.’

The recommendations were part of the panel’s 60th report presented to the Parliament on Thursday (July 27). 

The Committee pitched for an ex-ante evaluation saying that the approach was necessary to ensure digital markets are not monopolised. The parliamentary panel also asked the CDCL to apprise it of the findings at ‘the earliest.’ 

The Jayant Sinha-led committee also urged the CDCL to focus on the 10 anti-competitive practices highlighted in the panel’s December 2022 report. 

In December last year, the Parliamentary Standing Committee released a scathing report on the conduct of big tech giants in India. In the report, the panel underlined various anti-competitive practices employed by these players and sought the formation of a Digital Competition Law.

The report also suggested defining big tech players as Systemically Important Digital Intermediaries (SIDIs) on the basis of their market capitalisation, end users and revenues. A few months later in February, the Centre tasked the CDCL to look into the need for a separate law on competition in digital markets.

In its latest report, the panel advocated for ‘properly governing’ digital markets to curb the ‘sharp tipping’ of markets in favour of one or two leading players in a short span of time. 

Another major takeaway of the report was the disclosure that the Competition Commission of India (CCI) has established a Digital Markets and Data Unit (DMDU) under its wing. As per the report, the CCI informed the panel members that the DMDU would be a specialised ‘interdisciplinary centre of expertise’ for digital markets. 

The unit would comprise officers from the different divisions of the competition watchdog. As per the report, the panel has identified the following roles and functions of the DMDU:

• To facilitate cross-divisional exchange and discussion on digital market issues
• To act as a nodal point for stakeholder engagement
• To provide data analytics support and address enforcement-related issues of digital markets
• To lead market studies into matters related to digital markets

The Jayant Sinha-led committee also called for staffing DMDU with skilled experts to enable the CCI to ‘closely monitor and anticipate movements of SIDls.’

Meanwhile, as per Moneycontrol, the parliamentary panel also flagged the inadequate staff at the competition watchdog saying that the CCI currently has 70 vacancies against a sanctioned strength of 195. 

As per the report, the panel further noted that the Centre has kept the recruitment process of the CCI in abeyance due to cadre restructuring. It also urged the government to fast-track the process of cadre restructuring to fill the vacancies. 

It is pertinent to note that big tech giants and many of their industry bodies have come out all guns blazing against any potential new digital competition laws. In January this year, the Asia Internet Coalition (AIC), which counts Meta, Google, Amazon and Apple as members, termed the report by the parliamentary panel ‘prescriptive, absolutist and regressive.’

The IAMAI, which counts many big tech players as its members, also panned the suggestions saying that the current regulatory framework provided ‘ample room’ for the CCI to intervene without ‘over-regulating’ the tech sector.

Meanwhile, many Indian startups are batting for new norms to rein in the big tech players, and have openly supported the need for a new digital competition law.

While the CDCL is yet to release its report on the matter, it is clear that its recommendations will have a far reaching impact on the homegrown digital economy. For now, battle lines are drawn and all eyes are now on what the Committee on Digital Competition Law decides.