A parliamentary committee proposes ex-ante measures and a digital competition law to combat unfair business practises in digital markets.
Thursday, a parliamentary panel proposed ex-ante rules, a category of systemically significant digital intermediaries, and a new digital competition statute to combat anticompetitive behaviour on digital markets.
In addition, the committee has requested that digital market entities refrain from “anti-steering,” “deep discounting,” “self preferencing,” “search & ranking preferencing,” and other market-competition-harming tactics.
The recommendations are included in the Standing Committee on Finance’s report on “Anti-Competitive Practices by Big Tech Companies,” which was tabled in Parliament on Thursday amidst mounting concerns regarding unfair business practises in digital markets.
In its study, the panel discusses the unique problem provided by winner-take-all marketplaces, in which winners emerge within three to five years of the market’s inception and the market has already tipped in one direction by the time policies are developed.
“Therefore, the committee advises that competitive behaviour be examined ex-ante before markets become monopolised, as opposed to the current ex-post examination,” it stated.
In a significant recommendation, the panel has proposed classifying as “Systemically Important Digital Intermediaries” (SIDIs) leading entities that can negatively influence competitive conduct in the digital ecosystem based on their revenue, market capitalization, and number of active business and end users.
“India should also adopt definitions to ex-ante restrict the behaviour of SIDIs, as has been done by numerous international laws,” the committee said, adding that stakeholders, along with the CCI and the federal government, should agree on an acceptable definition of SIDIs.
In addition to recommending that the government study and introduce a Digital Competition Act to create a fair and transparent digital ecosystem, the panel has advocated for the Competition Commission of India to be restructured (CCI).
CCI should develop a specialised digital markets unit staffed with qualified professionals, academics, and attorneys. According to the panel, the unit will actively monitor SIDIs and give suggestions to the central government for SIDI designation, among other activities.
In addition, it stated that platform neutrality must be maintained at all costs and that a SIDI must not favour its own offerings over those of its rivals.
The committee mentioned “anti-steering practices” and stated that a SIDI should not limit access to its platform.
It stated, among other things, that a SIDI should not process, for the purpose of delivering online advertising services, the personal information of end users of third-party services that utilise the platform’s core services.
