Digital Competition Law, Indian Government Mulls Regulation of Big Tech
Big Tech companies' fast-paced growth and potential impact on fair trade rules have prompted governments worldwide to consider regulatory measures. Under the leadership of corporate affairs secretary Manoj Govil, an official committee in India has been tasked with examining the need for a separate digital competition law to regulate the activities of large technology players. However, it is not just in India; these giants have encountered regulatory frameworks and fines that demand compliance. From the European Union's mandate for Type-C charging ports to Brazil's charger regulations for iPhones and Australia's licensing fee, these directives have necessitated policy alterations by tech giants, pushing them to adhere to local legal norms.
The Digital Competition Law Proposal
Under the stewardship of corporate affairs secretary Manoj Govil, a committee set up to explore the necessity of introducing an ex-ante regulatory framework for digital markets through a distinct law, among others – is set to complete the initial drafting of its report this month.
This committee aims to study global best practices and gather input from a diverse range of stakeholders, including major international tech giants such as Apple, Amazon, Google, Meta, and Twitter. It is anticipated that this committee will conclude its report’s initial draft soon, potentially shaping future regulatory actions’ direction.
According to a source
“Given the complexity of the issue and differing views of stakeholders, introducing a bill to this effect will take time. It will be a new law, so it will take some time,”.
Digital Competition Law vs Existing Legislation
While the existing Competition Act was recently amended to address contemporary challenges and ensure fair competition, the government is considering a separate digital competition law to regulate the operations of large technology corporations comprehensively.
Rather than amending the existing act once more, the government aims to establish a new law that would work in tandem with the existing framework.
Global Precedents and Comprehensive Deliberations
The concept of introducing a law to regulate large digital players is not unique to India; countries such as the UK and the US have been engaged in similar discussions.
“Even in countries like the UK and the US, the idea of a law to regulate large digital players has been under discussion for some time,” said the person.
Thus, recognizing the issue’s complexity and the stakeholders’ diverse opinions, the Indian government is not rushing the process. Instead, it aims to engage in comprehensive deliberations to ensure that the proposed digital competition law effectively addresses the unique challenges the digital economy presents.
Defining Systemically Important Digital Intermediaries (SIDI)
The committee, led by Manoj Govil, will likely outline criteria for identifying Systemically Important Digital Intermediaries (SIDI), critical players capable of distorting fair trade.
These criteria may encompass factors such as business nature, turnover, and global and local user base. It’s expected that SIDI will be subjected to “dos and don’ts” to ensure equitable competition. Simultaneously, smaller digital firms are likely to remain outside the scope of the new regulatory regime to foster innovation and competition.
“So, there is no need to amend the existing Act again,” he said. “The new law is expected to complement the existing Competition Act.”
Anticipated Outcomes
The committee’s report is poised to influence the government’s future course of action regarding digital competition regulation. It will take into account inputs from stakeholders, recommendations from the parliamentary standing committee on finance’s December 2022 report, and insights gathered during stakeholder consultations. The aim is to create a regulatory framework that maintains fair competition and fosters innovation and growth in the dynamic digital sector.
Government Regulations Compel Tech Giants to Conform
The prominence of tech giants such as Google and Apple in innovation and technology comes hand in hand with an escalating level of oversight from governmental authorities.
Despite their pioneering contributions, these giants have encountered regulatory frameworks and fines that demand their compliance. From the European Union’s mandate for Type-C charging ports to Brazil’s charger regulations for iPhones and Australia‘s licensing fee, these directives have necessitated policy alterations by tech giants, pushing them to adhere to legal norms.
Tech Titans Face Regulatory Compulsions
In the face of mounting regulations, the cases of Google and Apple provide valuable insights into the evolving dynamics between government authorities and technology behemoths.
The European Union’s enforcement of Type-C charging ports compelled Apple to modify its approach, reflecting the EU’s determination to establish uniform standards across phone manufacturers. Similarly, Google’s encounter with the Competition Commission of India underscored the need to prevent misuse of market dominance within the mobile OS sector.
Google’s Confrontation with the EU
Akin to its predicament with the Competition Commission of India, Google’s run-ins with the European Union resulted in a hefty fine of $4.12 billion. The EU accused Google of imposing unlawful restrictions to fortify its search engine’s dominance.
Despite Google’s legal efforts, it ultimately succumbed to the EU’s ruling, marking the third instance of Google incurring fines from the EU, highlighting the regulatory body’s commitment to maintaining fair competition.
Apple’s Clash with Brazil
When Apple omitted chargers from the iPhone 12 series packaging under the pretext of environmental concerns, it encountered opposition from Brazil.
The nation banned iPhones without chargers and imposed a substantial fine of nearly Rs 150 crore. Although Apple challenged the ruling, it was compelled to ship chargers with its phones in Brazil, showcasing the jurisdiction’s emphasis on consumer protection and environmental considerations.
Australia’s Tussle with Google and Facebook
Australia’s proposal of a bill mandating licence fees to media firms for content sharing elicited reactions from Google and Facebook. Google threatened to withdraw its search engine, while Facebook removed news content from its platform. Eventually, both companies reached agreements to compensate publishers. However, amendments to Australia’s legislation were necessary before both tech giants complied.
Promoting Fair Competition and Consumer Welfare
The encounters of Google and Apple with governmental regulations underscore the increasing vigilance over large tech corporations. While the objective is to curb market dominance abuse, these regulations also safeguard consumer interests and foster equitable competition. Steering this evolving legal landscape is imperative for tech giants to ensure compliance in their operating regions, thus contributing to a harmonious and innovative tech ecosystem.
The Last Bit, The scenarios of Google and Apple illuminate the growing watchfulness of government bodies toward major tech players. These regulations, designed to counteract undue market influence, serve as a safeguard for consumers and champions of fair competition.
As the global digital economy continues to expand, governments are faced with the challenge of regulating large technology corporations to prevent potential distortions of fair trade.
India’s pursuit of a digital competition law, led by the committee chaired by Manoj Govil, signifies a proactive approach to addressing these challenges. By combining insights from stakeholders, international best practices, and parliamentary recommendations, India aims to strike a balance between fostering innovation and ensuring fair competition in the evolving digital landscape.
