[Draft] iamai submission to Committee on Digital Competition Law

Absence of any evidence-based impact assessment: The Big Tech Report fails to conduct an evidence-based impact assessment to support its recommendations. Given the sweeping recommendations and existing regulatory architecture, such an assessment is a critical prerequisite.⁶ IAMAI is concerned that the recommendations would significantly impact the ability of digital players to innovate and increase compliance obligations and related costs. The negative implications of introducing the provisions, especially when the CCI (and other regulators/authorities) can examine the ACPs under the Competition Act, existing IT Rules, or upcoming Digital India Act or Digital Personal Data Protection Act, may outweigh any perceived benefits. As per the Big Tech Report, an evidence-based process under the Competition Act should be short circuited to interfere with an entity’s business decisions to avoid “tipping” of the markets.⁷ Without market studies there will be false positives and type I errors.⁸ Therefore, it is imperative to carry out a detailed market assessment to identify and analyse the issues and concerns that require redressal through regulatory mechanisms.

Need to examine needs of the Indian market: The Big Tech Report appears to be heavily inspired by the European Union Digital Markets Act (DMA) that entered into implementation phase in November 2022 (substantive obligations are yet to kick in and be tested). However, India is a very different market compared to the European Union. Data collected by the World Bank shows that in 2020, just around 43% of the Indian population had connectivity to the internet, while the European Union in 2021 had almost 90% connectivity.⁹ Micro, small and medium enterprises (MSMEs) in India contribute to 27% of India’s overall GDP.¹⁰ Television ad-spend has been higher than digital ad-spend in India year after year.¹¹ Unlike European markets, India also has a thriving ecosystem of home grown players and also unparalleled digital public infrastructure which are Government of India initiatives (AADHAAR, UPI, CoWIN, ONDC, etc.). The internet and the world wide web have created a digital economy centred primarily around connectivity, networking and commerce. Transactions in the digital economy are enabled by technologies that constantly undergo innovation. This cycle of innovation also improves the products and services offered by the companies. In a nutshell, innovation is the backbone of the digital market. Adopting rules from European or other markets, without assessment of the local conditions will likely harm markets, innovation, economic growth and consumers. Further, in the absence of any market study, ex-ante regulations have an impossible task of foreseeing (and keeping up with) the competitive harms and preventing them in the fast-paced world of technology. The very nature of the regulation would do away with any testing of the harm that has actually been caused and, without allowing for growth in the economy, would instead create a fearful environment for businesses at large.