The Asia Internet Coalition, that has Meta, Amazon, Twitter, Google and other Big Tech companies as its members had recently raised questions on the digital competition law recommended by the Indian Parliamentary Standing Committee on Finance in December, arguing that it is regressive and may dampen digital innovation in India.
The Parliamentary Standing Committee had recommended that the Centre should formulate a digital competition act to regulate anti-competitive practices by Big Tech companies.
The Coalition had complained that it is critical to first understand the effects of the bill on the digital ecosystem before introducing any new legislative proposals and urged the Indian government to conduct wider stakeholder consultations to ensure that any new legislative proposals meet international best practices, are evidence-based, and are for the purpose of benefiting innovation, growth, and consumers.
“Otherwise, transplanting legislative reforms designed for a foreign jurisdiction with high digital penetration into India, could lead to disproportionate costs to consumers in India and an impact on innovation and investment by businesses in India — especially at a time when the government is rightly focusing on bringing connectivity to all under the Digital India initiative,” said the Coalition.
In response to the request of AIC, the government is likely to soon invite top executives from companies such as Meta Inc, Google, Microsoft and others to discuss crucial aspects of the draft Digital India Act before it is released for public consultation. The first meeting is expected to be held in Hyderabad.
The Ministry of Electronics and Information Technology (MeitY) is currently working on the draft, and the Digital India Act will replace the Information Technology (IT) Act of 2000.
The backlash from US tech companies signals the standoff between Indian and US tech companies will intensify in 2023, with New Delhi stepping up regulation for the world’s second most populous internet market.
There already is a growing trend of tightening regulations for the digital sector in many major economies. And dominant positions of US technological giants globally have also prompted concerns in many countries.
While making the recommendation for a digital competition law, the Indian parliamentary panel cited the EU’s proposed Digital Markets Act and the US’ American Innovation and Choice Online Act and the Open App Market Act. Western countries are also broadly making revisions to their regulation on big tech companies to close loopholes for the fast-developing sector.
In the digital era, digital and internet technologies have increasingly become a critical driver for economic growth in many countries across the world. However, the broad application and commercialization of the technologies have led to negative impacts, including monopoly and violation of data privacy, and in some cases, have even challenged sovereignty and security of other countries.
Moreover, it is an indisputable fact that US technology giants such as Google, Amazon, and Meta are constantly eroding away international market share and harvesting global data dividends, while promoting the rapid development of the US digital economy and maintain the US’ digital hegemony.