BackGovt to curb Big Tech’s data collection
The ex-ante model of regulation entails a code of conduct for the Big Tech including on data collection and use
PremiumNEW DELHI : The Centre has started hectic deliberations over regulating Big Tech’s data collection and usage policies after parliamentarians expressed their concerns over the use of data for stifling genuine competition in the market.
The inter-ministerial talks saw the participation of ministries of corporate affairs, electronics and information technology, as well as Competition Commission of India, three people with direct knowledge of the discussions said.
One proposal was to bring out a new Digital Markets Act to govern business practices, including data collection and use by digital economy companies, or to introduce certain guidelines in Competition Act to address the concerns, said one of the three people, adding that global best practices are being evaluated to arrive at a consensus.
The issue has become a priority after the Parliamentary Standing Committee on Commerce tabled a report in Rajya Sabha in July recommending an ‘ex-ante’ approach to regulate competition in the digital market economy instead of the ‘ex-post’ model followed now. This will prevent anti-competitive behaviour, instead of initiating a probe and penalizing after a breach occurs. .
The ex-ante model of regulation entails a code of conduct for the Big Tech including on data collection and use. It will ensure data harvested from consumers will not be used for any purpose other than serving the consumer’s interest. It will also entail defining big tech companies acting as ‘gatekeepers,’ that is, business platforms that act as a gateway for small firms to reach out to the end consumer. This will help regulate digital markets better.
The standing committee on commerce led by YSR Congress Party’s V. Vijayasai Reddy said digital market gatekeepers may be defined based on the number of registered users or active consumers, sellers, and number of transactions, volume of data aggregated, and revenue, besides its bargaining position compared to its business users and consumers, we well as its ability to set the rules for the ecosystem.
According to Neil Hildreth, executive director at law firm Lumiere Law Partners, introducing an ex-ante provision in Indian antitrust law is the way forward. “However, parameters and criteria for holding an entity as a ‘gatekeeper’ should be framed after considering the views of all stakeholders so as to ensure big businesses are not discouraged," he added.
“Usage of data has two sides. One, efficiency enhancement by facilitating the consumer to make best possible choice and save time. But the danger lies in the use of data by those who have access to it to distort the market. The broad principle is to collect only that data which is needed for improving efficiency and not for any other purpose," said a second person also seeking anonymity.
Email queries to the corporate affairs ministry and the CCI on Tuesday and to the ministry of electronics and information technology on Wednesday did not elicit any response till press time.
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