EU digital competition norms offer guidance, but local norms essential: CCI
- The regulator’s comments about the need for local solutions assume significance because unlike the EU, which implemented a Digital Markets Act from 2 May last year, India has a very large startup ecosystem which should not be bogged down with a new layer of regulations
New Delhi: European Union's (EU’s) framework for regulating digital market giants offers guidance, but India needs local norms, given the differences in the make-up of the two economies and the regulatory perspectives adopted, Competition Commission of India (CCI) chairperson Ravneet Kaur said on Wednesday.
This is the first time an Indian official has highlighted that the realities of the domestic economy are different, and that should play a role in framing a digital competition law, for which the government has brought out a draft bill for public feedback.
The regulator’s comments about the need for local solutions assume significance because unlike the EU, which implemented a Digital Markets Act (DMA) with a code of conduct for influential digital economy firms from 2 May last year, India has a very large startup ecosystem which should not be bogged down with a new layer of regulations.
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Mint had reported on 8 July that over a dozen top startups, including Zomato, Myntra and Nykaa, commanding millions of users and large revenues are likely to face stricter compliance standards under the proposed law, going by the definition of ‘systemically significant digital enterprises’ proposed in the draft bill. In comparison, the DMA tags only six companies, all non-EU and mostly American, as digital gate keepers —Alphabet Inc., Amazon.com Inc., Apple Inc., ByteDance Ltd., Meta Platforms Inc. and Microsoft Corp.
India perspective
The way EU looks at things is very different from the way that we look at it or the way the US looks at it, the chairperson said, adding that India has the third-largest ecosystem of startups in the world.
“This is not the case with EU. So, whereas the EU can look at something like a Digital Markets Act and it has a very different perspective, when we look at framing ex-ante regulation, we are very conscious of the fact that we are having a lot of startups and they are in fact the hub of innovation, and of entrepreneurship. That's where we find growth in the Indian economy,” said Kaur.
Also read: CCI enlists attorney general R Venkataramani to clear path for Amazon, Flipkart antitrust probes
The chairperson also said that, keeping this fact in mind, Competition Commission uses the practices in other countries just as a guide and frames “our own solutions looking at issues from our own perspective--what impacts us and how,” Kaur said. “We should work within the Indian economy because our role is to provide a level playing field to promote sustained competition in Indian markets,” she said at the Global Economic Policy Forum 2024 organized by Confederation of Indian Industry.
The crux of the proposed law is ex-ante or forward looking regulations, which lay down certain obligations and requirements for influential digital economy firms meeting certain financial and market criteria. The idea is to pre-empt anti-competitive conduct in the first place because it could be too late if one waits for detecting and correcting it in digital markets.
The government has consulted over 100 entities, including some of the businesses likely to be impacted by the proposed digital competition law, such as Amazon, Apple India Pvt. Ltd, Flipkart and Google, and their suggestions are under consideration, finance minister Nirmala Sitharaman informed Lok Sabha on Monday, as reported by Mint on 9 December.
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Business NewsEconomyEU digital competition norms offer guidance, but local norms essential: CCI
First Published:11 Dec 2024, 09:58 PM IST
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