IAMAI’s status quo approach recommendation not best path to foster innovation

A group of top internet companies including Paytm, Bharat Matrimony, Shaadi.com, Tinder-owner Match Group, ShareChat, and Spotify have written to the Committee on Digital Competition Law (CDCL), against the submission made by the industry body Internet and Mobile Association of India (IAMAI) on the digital competition bill.

In the dissent note, the collective has said that they don’t agree with IAMAI’s earlier submission on the digital competition bill, adding it does not reflect the views of many of the apex body’s member companies.

CDCL was set up by the Indian government in February 2023 to explore a separate law on competition in digital markets. In its submission to CDCL, IAMAI argued against the need for a separate digital competition law. IAMAI, which counts Indian arms of Google, Microsoft, Twitter, Meta, and others as its key members, claimed that this would stifle innovation, competition, and the benefit that accrues to markets and users.

Startup founders including Bharat Matrimony’s Murugavel Janakiraman, Mapmyindia’s Rohan Verma, and Shaadi.com’s Anupam Mittal amongst others had argued that IAMAI is protecting the interests of the big tech and failing to represent home-grown tech players.

“Our experience in operating innovative companies at various stages of growth tells us that a “status quo” approach to dominant digital gatekeeper platforms is not the best path to foster innovation. Regrettably, IAMAI’s recent submission ignores the fundamental reality of why these discussions about ex-ante regulation are taking place both here and around the world: the status quo has failed, and is failing, to adequately constrain the power and conduct of the dominant digital gatekeepers that now control so many aspects of commerce and our lives,” the note accessed by CNBC-TV18 read.

“We understand that ex-ante regulation is needed in the digital sector and India would benefit from a new regulatory framework to improve the competition in the digital economy. Currently, the protracted nature of traditional antitrust litigation is expensive and extensive,” the note added.

The group also wrote in the letter that case-by-case adjudication of violations by a limited number of gatekeepers in the digital markets has created a system that encourages uncertainty, privileges incumbents, and deprives individuals/ digital companies of participating in the digital markets fairly. The members have recommended designating systemically important digital intermediaries (SIDIs) to identify such gatekeepers. CNBCTV18