US tech companies call the proposed Indian competition legislation “absolutist and regressive”

In the most recent escalation of hostility between U.S. tech giants and New Delhi, a powerful industry group that represents Google, Meta, and Amazon, among other tech firms, has expressed concerns about the digital competition law recommended by an Indian parliamentary panel that seeks to regulate their alleged anticompetitive practises, calling the proposal “absolutist and regressive” in nature.

The government should pass a digital competition act to prohibit Big Tech companies from engaging in anticompetitive business practices on their platforms, such as favouring the promotion of their brands or refusing to support third-party systems, according to a recommendation made last month by the Parliamentary Standing Committee on Finance.

Competition law in India - iPleaders

The panel declared that the competition act “would be a windfall not only for our nation and its budding startup sector but also for the entire world.”

Asia Internet Coalition, an industry group, stated that the new digital competition law might hinder Indian enterprises’ investments in the country and result in “disproportionate costs” for customers in the South Asian market. It said, “The committee’s report is prescriptive, absolutist, and regressive.

The Indian panel warned that I.T. firms “must not favour its offers over the offers of its competitors” when acting as mediators to supply and sales marketplaces last month, stating that the suggestion was fundamentally crucial to prevent monopoly.

The European Union’s planned Digital Markets Act, the American Innovation and Choice Online Act, and the Open App Market Act are all mentioned in the parliamentary panel’s report.

Tech firms invested $75 billion in India

AICOA and OAMA have “failed to achieve bipartisan support due to substantive disagreements and worries regarding unintended implications on consumers, growth, and innovation,” according to the business organisation AIC. In conclusion, there is no agreement that ex-ante legislation in the DMA manner is the best course of action for resolving possible competition issues in the digital arena, it stated in the statement.

In the past three years, New Delhi has implemented and proposed many regulatory changes to bring more accountability and justice to how the internet industry operates in the nation. These actions have alarmed many American companies. In the past ten years, companies like Google, Meta, Amazon, and investment firms Sequoia, Lightspeed, SoftBank, and Tiger Global have invested over $75 billion in India, the second-largest internet market in the world.

More such policy adjustments are coming to New Delhi in 2023, including a telecom law restricting the government’s control over internet companies.

“We firmly believe that the government should first monitor whether the benefits of these international regulatory advances exceed the costs.

The Digital Personal Data Protection Bill and the Competition Amendment Bill (CAB), two recent government proposals that aim to safeguard consumers, maintain competition, and foster technological innovation with a focus on digital markets, are particularly noteworthy, according to Asia Internet Coalition.