[Draft] iamai submission to Committee on Digital Competition Law

Lack of clarity on the policy objective and no assessment of inadequacy of current and upcoming regulatory structures: A clearly articulated policy objective is crucial for any regulatory policy. However, the Report fails to identify the policy objective for recommending introduction of DCA. Clarity on the aim and purpose is crucial as the Report recommends additional regulation for digital markets to address the ACPs which are currently covered by the Competition Act and other legislations as highlighted in the Annexure.² Additional regulation would be warranted only when there is evidence of failure of the existing regulatory structure. However, the Reports alludes to no such failure. In fact, the Report itself relies upon and draws from the steps taken by the Competition Commission of India (CCI) exercising its powers under the Competition Act.³ As recognised in the Report, the CCI has looked into various ACPs and passed orders imposing penalties and requiring changes in conduct. The Report labours on what it considers to be “defining characteristics” of the digital markets and identifies these as the reason for introducing an ex-ante regime.⁴ However, it does not do the necessary exercise of examining why the current regulatory regime is unable to address the concerns, if any, raised by the “defining characteristics”.

Lack of Review of Overlapping Existing and Upcoming Regulations: The concern is more pronounced as the ACPs are regulated not just by the Competition Act but also other laws and proposed laws as set out in the Annexure-1.

Lack of Review of existing recommendations: The Report also ignores the CLRC report and the market study on e-commerce conducted by the CCI. The CCI, after a detailed study, recommended that marketplaces must adopt “self-regulatory” measures to increase transparency in search ranking, user reviews, and terms and conditions.⁵ And, the CLRC cautioned against specific intervention without a detailed study of these markets. The Big Tech Report however seems to proceed on an assumption that the CLRC’s and CCI’s recommendations are insufficient and that self-regulatory measures are not enough. However, these underlying assumptions are not backed by any justification.