US tech giants say Indian panel’s recommended competitive action is ‘absolutistic and regressive’

An influential industry group representing Google, Meta and Amazon, among other tech companies, has raised concerns about the digital competition law recommended by an Indian parliamentary body that seeks to regulate their alleged anti-competitive practices, calling the proposal “absolutistic and regressive” in recent escalation of tensions between US tech giants and New Delhi.

The parliamentary Standing Finance Committee recommended last month that the government enact a digital competition law to regulate anti-competitive business practices by big tech companies on their platforms and ban them from promoting their own brands preferentially or not supporting third-party systems. The competition law, the panel said, “will be a boon not only for our country and its burgeoning start-up economy, but for the entire world.”

Industry group Asia Internet Coalition said in a statement that the proposed digital competition law could hurt digital innovation in India and hamper business investment in India and impose “disproportionate costs” on consumers in the South Asian market. “The report presented by the committee is inherently prescriptive, absolutist and regressive,” he added.

The Indian body said last month that its recommendation was systemically important to counter monopolies and warned that tech giants “must not favor their own offerings over those of their competitors” when acting as intermediaries for supply and outlet markets.

The recommendation of the parliamentary body cites the Digital Markets Act proposed by the EU as well as the American Innovation and Choice Online Act and the US Open App Market Act.

Industry group AIC said that both AICOA and OAMA “failed to garner bipartisan support due to substantive disagreements and concerns about unintended consequences for consumers, growth and innovation. The way forward to address potential competition concerns in the digital space.” “, the statement said.

India is the second largest internet market in the world and has attracted over US$75 billion in investments over the last decade from companies such as Google, Meta, Amazon and investment shops Sequoia, Lightspeed, SoftBank and Tiger Global. New Delhi has pushed through and proposed a series of policy changes over the past three years to bring more accountability and fairness to the way tech companies operate in the country, which has rocked many US giants.

New Delhi enters 2023 with several more such policy changes, including a telecoms law that would increase government access to internet companies.

“We urge the government to first monitor whether these regulatory developments overseas bring benefits that outweigh the costs. In particular, it is important to note that the government has recently introduced two significant bills, namely the Digital Personal Data Protection Act and the Competition Amendment Act (CAB), both of which aim to protect consumers, safeguard competition and to encourage technical innovation, with a particular focus on digital markets,” said the Asia Internet Coalition.

“Accordingly, before proposing any new legislation, it is crucial to first understand the impact of these two bills on the digital ecosystem.”

Google CEO Sundar Pichai said last month that India was going through an important time as it drafted several important regulations, pledging that it would benefit from an open and connected internet.