Big tech voices opposition to digital competition law in India

Apple articulated its stance during its submissions to the Committee on Digital Competition Law (CDCL), saying it “prefers a regulatory framework that fosters innovation” rather than imposing stringent pre-emptive measures.

Last week, the CDCL unveiled a comprehensive report [pdf] alongside the draft Digital Competition Bill, 2024, prompting divergent views from stakeholders.

Under the proposed bill, digital companies would be required to notify the Competition Commission of India (CCI) of their eligibility as Systemically Significant Digital Enterprises (SSDE) based on predefined criteria.

Similarly to the DMA, these enterprises would face stringent prohibitions against self-preferencing, third-party app restrictions, anti-steering policies, data misuse and product bundling. Additionally, they would be mandated to establish transparent complaint handling and compliance mechanisms, ensuring fair, non-discriminatory and transparent operations with both end users and business users.

The bill is currently open for public feedback until 15^th April, inviting a spectrum of opinions and critiques.

Tech giants, including Apple, Google, Meta and Amazon, have stood staunchly against the imposition of ex-ante obligations for large players, citing concerns over stifling innovation and inhibiting market growth.

Apple India told CDCL that it prefers a “light-touch regime” aimed at fostering innovation.

The company said the Digital Markets Unit, established by the CCI in 2023, is well-equipped to address any regulatory capacity limitations. Furthermore, Apple suggested opening a CCI regional office in Bengaluru to facilitate closer collaboration with India’s burgeoning technology ecosystem.

Apple’s aversion to pre-emptive regulations isn’t surprising, given its ongoing contention with the EU’s DMA, which officially came into effect on 7th March.

Under DMA, several major tech firms, including Apple, are designated as “gatekeepers” and are subject to stringent compliance measures aimed at curbing anti-competitive practices. Notably, Apple has had to implement significant revisions to its iOS, App Store and browser policies to comply with the DMA’s mandates.

In India, Apple finds itself embroiled in antitrust investigations by CCI, initiated in response to complaints filed by domestic startups.

But Apple is not the only company opposing the implementation of ex-ante regulations in India.

In its submission to CDCL, Meta asked for a comprehensive impact assessment of the Indian economy and sought clarity regarding the policy objectives of the proposed legislation. Expressing reservations about rushing into adoption without extensive research, Meta warned that the committee’s proposals might disrupt existing regulatory frameworks, potentially impeding growth and innovation within India.

Similarly, Google voiced reservations about ex-ante regulations, highlighting the need for a nuanced approach that balances competition and innovation. Stressing the importance of evidence-based justifications and phased implementation, Google cautioned against adopting rigid rules that could hamper product innovation and consumer benefits.

Amazon, already subject to stringent regulations under the foreign direct investment (FDI) Policy, argued that additional ex-ante regulations for the ecommerce sector might be premature and excessive. Citing the risk of increased compliance costs and regulatory overlap, the company urged policymakers to tread cautiously to avoid over-regulation.

Indian players have been split over the proposed regulations. The All India Gaming Federation, Asia Travel Technology Industry Association, the Confederation of All India Traders and the Digital News Publishers Association were among numerous organisations to endorse them, but online restaurant platform Zomato and hotel booking site Oyo said they wanted to see more measures to protect homegrown companies.