Parliamentary Panel Proposes Regulations to Curb Anti-Competitive Practices in Digital Markets

The Standing Committee on Finance in India has released a report on "Anti-Competitive Practices by Big Tech Companies" and proposed ex-ante regulations, a category of systemically important digital intermediaries (SIDIs), and a new digital competition law to address unfair business practices in digital markets. The report highlights the unique challenge of winner-take-all markets, where a small number of companies can dominate a market within a few years of its development, and recommends evaluating competitive behavior before markets become monopolized.

Classification of Systemically Important Digital Intermediaries (SIDIs):

The panel recommends classifying leading entities that can negatively impact competition in the digital ecosystem as SIDIs based on their revenue, market capitalization, and number of active business and end users. It also suggests that India adopt definitions to ex-ante regulate the behavior of SIDIs, as has been done by various legislations around the world. Stakeholders, including the Competition Commission of India (CCI) and the central government, should collaborate to define SIDIs.

Digital Competition Act and Revamping of Competition Commission of India (CCI)

The panel recommends that the government consider introducing a Digital Competition Act to ensure a fair and transparent digital ecosystem. It also suggests revamping the CCI by establishing a specialized digital markets unit within the organization, staffed with skilled experts, academics, and attorneys. This unit will closely monitor SIDIs and provide recommendations to the government on designating SIDIs and other activities.

Other Recommendations

In addition to the above proposals, the panel recommends that platform neutrality be ensured at all costs and that SIDIs not favor their own offers over those of their competitors. It also suggests prohibiting SIDIs from engaging in anti-steering practices, such as conditioning access to their platform, and from processing personal data of end users for the purpose of providing online advertising services using services of third parties that make use of the SIDI's core services.

Conclusion

The Standing Committee on Finance's report on anti-competitive practices by big tech companies in India proposes ex-ante regulations, a category of systemically important digital intermediaries, and a new digital competition law to address rising concerns about unfair business practices in digital markets. The panel also recommends revamping the Competition Commission of India and ensuring platform neutrality. These suggestions aim to create a fair and transparent digital ecosystem in India.

Written by princy

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