Should India undertake an ex-ante regulation to rein in Big Tech?

However, in doing so, legislators are prone to face a bunch of challenges, akin to making a regulation to accommodate completely different tiers of the market, contemplating the character of digital markets and the variety of India.

This, nevertheless, might not result in the DCA substituting India’s current competitors laws, which too are anticipated to be strengthened additional by the approaching Competition (Amendment) Bill, 2022, they added.

Tabled within the Parliament on 22 December, the report, titled ‘Anti-competitive Practices by Big Tech Companies’ listed 10 “undesirable practices” among tech firms, and recommended an ex-ante approach or a “code of conduct-based approach” to manage Big Tech in India.

On 18 August, Mint reported that the draft was within the works, and will search to ascertain a regulation much like the European Union (EU)’s Digital Markets Act (DMA).

Industry stakeholders and legal professionals stated India’s method to manage Big Tech is according to international developments, however comes with its personal challenges. “The new Act might search to put down restrictions concerning equity, transparency and extra, and may very well be a set of laws, reasonably than a regulation that offers in anticompetitive conduct. But, taking the method implies that the present provisions of the Competition Act are insufficient to take care of digital competitors. This will not be solely appropriate, because the Competition Commission of India (CCI) has been passing orders towards tech companies and investigating them already,” said Akshayy S Nanda, competition lawyer and partner at law firm Saraf & Partners.

“If these actions are being taken, it’s not clear if there is a clear need to bring an ex-ante regulation without properly evaluating the existing legal infrastructure,” he added.

The EU’s DMA was adopted “because the European Parliament felt that their current authorized infrastructure was insufficient to handle competitors amongst tech firms”, he stated.

Industry insiders agreed that India’s method to regulating Big Tech is according to not simply EU’s DMA, however different competitors laws akin to that of the UK, the US, Korea and Germany. However, that will not indicate that the laws is a step in the best course.

“Digital inherently is a winner-takes-all market, and it’s a contest for, and never available in the market— often called community results. The extra the variety of customers on a platform, bigger its affect on the general business. EU’s DMA has come after legislators spent way more time in finding out the consequences of competitors, however given how completely different the Indian market is from many international counterparts, and the variety of tiers and segments there are on this market, it’s not clear if sufficient time has been spent on finding out the consequences of competitors, akin to that of community results in each section of the market,” said Isha Suri, senior researcher at policy thinktank Centre for Internet and Society.

The DCA could, therefore, take a tiered approach to dealing with competition — an approach that may potentially move away from the DMA in EU as the model law. Anisha Chand, partner at law firm Khaitan & Co., said that going by the recommendation of the parliamentary committee, “not all” tech firms could also be put below the identical bracket.

“Only people who qualify as systemically vital digital intermediaries (SIDI) could be burdened with compliance necessities. However, for smaller tech firms seeking to promote out to Big Tech, a reporting requirement to the CCI may get in the way in which,” Chand said, underlining how the provisions of the Competition (Amendment) Bill, 2022 could interplay with India’s DCA.

Manjushree RM, senior resident fellow at policy thinktank Vidhi Centre for Legal Policy, added that another issue is the amount of time it takes for India to adopt a legislation — which is key since tech regulation and digital markets are typically very fast-moving in nature.

“The 2019 Competition Law Review Committee (CLRC) suggestions are already outdated in terms of the thinking required to regulate tech. Especially in digital markets, solving problems through statutory legislations may not be feasible, since the process of framing a law is naturally slow in India, and takes 5-6 years from idea to reform to law,” she stated.

This, in keeping with Manjushree, poses concern concerning whether or not the DCA “is an implementable mannequin or not.”

“By the time a competition law tries to remedy a conduct, it is almost always too late. The market is always in a dominant position with comparatively little regulation, and any stringent law put in place after that would not give an optimal outcome,” she stated.

Khaitan’s Chand added that one optimum method could be for India to see how EU’s DMA implementation performs out.

“The EU DMA has simply gone stay, and perhaps India may think about ready to see how the DMA performs out, earlier than leaping onto the bandwagon,” she stated.

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