An influential industry group representing Google, Meta and Amazon among other tech firms has expressed concern over the Digital Competition Act recommended by an Indian parliamentary panel that seeks to regulate their alleged anti-competitive practices, calling the proposal “absolutist and regressive” in the latest escalation of tensions between U.S. tech giants and New Delhi.
The parliamentary standing committee on finance recommended last month that the government adopt a digital competition law to regulate anti-competitive business practices by Big Tech companies on their platforms, prohibiting them from preferentially promoting their internal brands or not supporting third-party systems. The Competition Act, the panel said, “will be a boon not only to our country and its nascent start-up economy, but also to the entire world.”
The industry group Asia Internet Coalition said in a statement that the proposed digital competition law could harm digital innovation in India and could affect investment by businesses in India and have “disproportionate costs” for consumers in the South Asian market. “The report tabled by the committee is prescriptive, absolutist and regressive,” it added.
The Indian panel said last month that its recommendation was systemically important to counter monopoly and warned that tech giants “must not favor their own offerings over those of competitors” when acting as intermediaries for supply and sales markets.
The parliamentary panel’s recommendation cites the EU’s proposed Digital Markets Act and the US’s Online Innovation and Choice Act and Open App Markets Act.
Industry group AIC said both AICOA and OAMA have “failed to gain bipartisan support due to significant disagreements and concerns about unintended consequences for consumers, growth and innovation. In sum, there is no consensus that a DMA-style pre-legislation is the way forward to address potential competition issues in the digital space, the statement says.
India is the world’s second-largest internet market and has attracted over $75 billion in investment from firms including Google, Meta, Amazon and investment boutiques Sequoia, Lightspeed, SoftBank and Tiger Global over the past decade. New Delhi has enforced and proposed a series of policy changes over the past three years to bring more accountability and fairness to how tech companies operate in the country in moves that have rattled many US giants.
New Delhi enters 2023 with several such policy changes, including a telecom law that will tighten the government’s grip on internet firms.
“We encourage the government to first observe whether these foreign regulatory developments provide benefits that outweigh the costs. In particular, it is important to note that the government has recently proposed two important bills, namely the Digital Personal Data Protection Bill and the Competition Amendment Bill (CAB), which both seek to protect consumers, preserve competition and promote technological innovation, with a particular focus on digital markets,” the Asia Internet Coalition said.
“Therefore, it is critical to first understand the impact of these two bills on the digital ecosystem before introducing new bills.”
Google CEO Sundar Pichai said last month that India was going through an important period as the country prepares several key regulations, arguing that it will benefit from an open and connected internet.