Tech giants Google, Apple, Flipkart, Amazon, and Uber are pushing back against the idea of preemptive regulation in India, as suggested by an expert committee on digital competition law. Conversely, platforms like X and Paytm are open to such regulations, with Paytm advocating for a focus on larger digital players.

What Happened: The Committee on Digital Competition Law, set up by the Union Ministry of Corporate Affairs, on Tuesday proposed a draft legislation targeting anti-competitive practices by tech behemoths. It aims to designate certain companies as “Systematically Significant Digital Enterprises (SSDE)” based on their size, turnover, and market influence. These SSDEs would face penalities of up to 10% of their global turnover for engaging in unfair practices.

The Ministry of Corporate Affairs stirred the pot by seeking public feedback on the committee’s report and a draft bill aiming to fine-tune digital market oversight. Amazon, fearing over-regulation, highlighted its already stringent adherence to foreign investment policies. Apple India suggested a more innovation-friendly approach, hinting at the need for the Competition Commission of India (CCI) to be more accessible by setting up in tech’s heartland, Bengaluru.

Flipkart and MakeMyTrip threw in their two cents, cautioning against a one-size-fits-all policy and advocating for regulations tailored to major platforms respectively. Amidst global scrutiny over market dominance and data misuse by these tech behemoths, India’s own CCI has already landed hefty fines on Google.

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What does India’s Digital Competition Law want from Big Tech?

The proposed legislation aims to bring major tech companies under a tighter regulatory framework to promote fair competition and innovation in India’s digital space. At its core, the law would identify big tech firms providing essential digital services — like search engines and social networks, as SSDEs based on their market size, user base, and influence.

Once labelled as an SSDE, a company would need to follow strict guidelines that prevent it from engaging in practices that could stifle competition, such as favouring its products over others or limiting user access to third-party applications.

These companies must also be transparent about their operations, ensuring they treat all users and businesses fairly and without discrimination. They’re expected to report themselves to the Competition Commission of India if they meet the criteria for SSDE designation. Additionally, the law proposes reassessing the criteria for being an SSDE every three years, allowing for adjustments based on the evolving digital landscape.

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