India’s upcoming information technology law, which has so far been informally referred to as the Digital India Act, may contain provisions to address monopolies, define obligations for competition compliances and have gatekeeping rules regarding market dominance when it comes to Big Tech, officials familiar with the matter said.
The ministry of electronics and information technology is looking at the corresponding laws of nearly 20 countries, but in particular the Digital Markets Act (DMA) and the Digital Services Act (DSA) recently enacted by the European Union (EU).
The discussions come at a time of growing concern over the amount of influence tech companies, especially the big five of Google, Amazon, Apple, Meta and Microsoft, wield on the global internet.
Their dominance is detrimental to smaller companies trying to compete across the open internet, one of the officials aware of the discussions said. “We need a global-level law that will have both civil and criminal liabilities. Data doesn’t move in just one way, it’s moving across vertically, horizontally, we need to harmonize how to regulate it and protect those who transact digitally,” this person said, adding that the objective was to make the future law simple and accessible for everyone.
“Increasingly, the entire market is becoming digital,” a second official said on the condition of anonymity. “The country needs laws for competition compliance and to counter monopolies and market dominance.”
At present, anti-trust issues in India are guided by the Competition Act, 2002 with the Competition Commission of India taking the lead of checking monopolistic practices. The government has proposed amendments to the competition law through the Competition Amendment Bill, 2022, which was referred to a standing committee in the most recent parliament session.
The second official said the new IT law will have overlaps with the competition law.
Legal experts, welcoming the move, said this will be crucial. “The EU model was to deal with digital services and digital markets separately. The proposed inclusion of antitrust provisions within the ambit of the proposed digital Act, substantially increases its scope and this expansion should be undertaken understanding the focus and ensuring clarity in enforcement of such provisions. Harmonizing existing general and special laws and ensuring absence of overlaps between authorities is critical,” said Supreme Court lawyer and founder of Cybersaathi NS Nappinai.
In May this year, the European Union imposed record fines over the past 10 years for certain harmful business practices by very large digital players, Cédric O, the French minister of state with responsibility for Digital said at the time. “The DMA will directly ban these practices and create a fairer and more competitive economic space for new players and European businesses. These rules are key to stimulating and unlocking digital markets, enhancing consumer choice, enabling better value sharing in the digital economy and boosting innovation.”
The DMA defines a company providing multiple services as a “gatekeeper”. “The platform must control one or more core platform services in at least three member states,” the EU website states.
Failing to comply with the DMA’s directives, such as misuse of private user data for their benefit or enforce unfair conditions for business users, can elicit fines up to 10% of their annual turnover, while a repeat offender can be fined up to 20%.
“India is in an enviable position of having both laws and precedents to guide its path. While adapting global practices it would be best advised to ensure that there is no overreach and precedents are not blindly adapted but that simple easy to enforce provisions suitable to the Indian ecosystem are formulated” Nappinai added.
In a case study brief published in May 2022, the Observer Research Foundation noted that the “growth of these conglomerates and their acquisition of an increasing number of companies has allowed them to engage in anti-competitive activities, such as deep and pervasive control of markets , abuse of dominance, and signing of horizontal and vertical agreements.”
“Such activities have put these enterprises on the radar of antitrust regulators in various jurisdictions. Google, in particular, has frequently been at the center of controversy in different parts of the world, in relation to antitrust issues including search manipulation, Android dominance, and online advertising monopoly. The EU has been investigating the company since 2010 and has fined it approximately $10 billion so far,” said the brief prepared by ORF’s Rahul Ray.
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