[Draft] iamai submission to Committee on Digital Competition Law

3. Whether there is global consensus on following the EU DMA approach?
There is no global consensus among competition law and economics experts or among policymakers for following the EU DMA approach or whether ex ante regulation is necessary or it is the right path to regulate digital platforms.
For instance, the U.S. Congress did not pass the American Innovation and Choice Online Act (AICOA), the Open App Markets Act (OAMA) and a few other antitrust package bills that would have prevented mergers and vertical integration. This rejection was due to the bipartisan disagreement about the policy objectives. Democrats wanted to prioritise privacy and content regulation, whereas Republicans were more concerned about potential anti-conservative bias. These are not strictly competition issues but heavily weighed in these bills. Also, there was substantial criticism about those bills e.g., the scope of those bills was too broad and unclear. There was no sufficient analysis on the need for additional regulation specifically for online platforms. Furthermore, there were deep concerns about unintended consequences on consumers, growth and innovation.
Even the DMA itself has been the subject of criticism within Europe and elsewhere, including by Frederic Jenny, Chair of the OECD Competition Committee, who stated that “... the EU proposal could actually restrict competition or innovation of such ecosystems in the name of fairness or of protecting competition within an ecosystem.” The EU’s DMA itself has not lived its full life to show its effectiveness, not to mention that the implementation has not even begun yet. Thus, globally available precedent should be considered with caution.
Not only are approaches such as the DMA tailored to the specific policy priorities of the European political leadership, and the peculiarities of the European common market, they remain untested as of date. The implementation phase of the DMA kicked off in November 2022 and the substantive obligations are yet to come into force. Accounting for transition periods following the entry into force of the DMA, one can expect meaningful evidence of the effectiveness of the DMA in ensuring contestability without adverse consequences on welfare, to flow-in only as late as 2025.
Jurisdictions which have examined whether or not it is appropriate to introduce ex ante legislation have first conducted issue-specific market studies, sector inquiries and/or consultations to better understand the sector, how it works and where specific issues or harms may arise. For example:

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  The UK CMA’s Digital Markets Unit (DMU) published a consultation in July 2021 seeking views on the proposed design of a new pro-competition regime for digital markets. During the consultation period (which went on from 20 July 2021 to 1 October 2021), 105 written submissions were received from a range of respondents, including both large and small technology firms, non-technology sector businesses, trade associations, and academics. Alongside written submissions, the DMU ran a wide-ranging programme of stakeholder engagement, including roundtables and technical discussions on its detailed proposals. Accompanying the consultation is the associated Impact Assessment of the government’s proposals and supplemental research reports.¹⁴
  
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  The Taiwan Fair Trade Commission (TFTC), which released the White Paper on Competition Policy in the Digital Economy in early March 2022,¹⁵ after extensive stakeholder discussions and submissions over a period of a year, the White Paper was finalized and the TFTC released the final version in December 2022.
  
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  The Singapore Competition and Consumer Commission (CCCS), which released its market study on e-commerce platforms in 2020.¹⁶ In 2019, the CCCS published a market study on the online travel booking sector in Singapore.¹⁷ In 2019, the CCCS also collaborated with the Data Protection Commission to publish a discussion paper on data portability.¹⁸
  
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  The Japan Fair Trade Commission (JFTC), released its Market Study Report on Mobile Operating System and Mobile App Distribution in February 2023.¹⁹ The JFTC’s market study dovetails into a concurrent market study conducted by Japan’s Headquarters for Digital Market Competition (comprising three government ministries) into the same topic - the final report yet to be released.²⁰
  
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  The Australian Government’s direction in 2020 to the Australian Competition & Consumer Commission (ACCC) to conduct inquiries into digital platform services. The ongoing Digital Platform Services Inquiry (2020-2025) requires the ACCC to provide the Australian government with an interim report every 6 months on specific digital topics until the inquiry concludes with a final report, to be provided to the Australian government by 31 March 2025.²¹
  
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  The Korea Fair Trade Commission (KFTC) recently commissioned a study (i) to review ex ante regulations on platform dominance in other jurisdictions; and (ii) to evaluate whether the existing competition laws are sufficient and, if not, to provide recommendations for new rules.
  

The Indian approach, while considering global developments, should therefore appropriately contextualize them, and adopt a mix of regulatory design choices best suited to Indian market realities – should the need for additional regulations be established in the first place.