“Ex-ante evaluation is of the essence to ensure markets don’t end up monopolized,” the Parliamentary Standing Committee on Finance stated in its sixtieth report presented to the parliament on July 27, reiterating its earlier recommendation for ex-ante regulations for digital markets. The Committee also urged the government to finalize the Digital Competition Bill soon.
Ex-ante regulation refers to rules that look at preemptively preventing large platforms from engaging in certain types of conduct that could result in reducing competition, as opposed to (the current model of) ex-post regulations, which go after companies by investigating allegations of misconduct after they have occurred.
Why does this matter? The Parliamentary Committee is doubling down on its recommendation for ex-ante regulations despite recent pushback against such regulations from various industry bodies and civil society groups. In a deep dive MediaNama did recently, we reported on how ex-ante regulations could adversely impact Indian companies and restrict their innovation and growth.
The Parliamentary Committee’s recommendations from before: In an earlier report (fifty-third report) titled Anti-Competitive Practices by Big-Tech Companies, presented to the parliament in December 2022, the Parliamentary Standing Committee of Finance had made fourteen recommendations to the government:
- Introduce ex-ante regulations for digital markets
- Introduce a Digital Competition Act
- Revamp the Competition Commission of India (CCI)
- Define Systemically Important Digital Intermediaries (SIDIs) and subject them to additional measures (as below)
- Prohibit SIDIs from imposing anti-steering policies
- Prohibit SIDIs from self-preferencing
- Prohibit SIDIs from bundling and tying products or services
- Prohibit SIDIs from imposing price parity on its business users
- Prohibit SIDIs from signing exclusivity agreements with their business users
- Limit how SIDIs use the data of their business users to improve their own platform
- Limit the use of personal data by SIDIs for advertising purposes
- Ensure neutrality and fairness in search and ranking results on SIDIs
- Scrutinize mergers and acquisitions in the digital sector more closely
- Allow installation of third-party app stores and sideloading of apps on operating systems
We’ve summarised the above recommendations in more detail here.
All the above recommendations have been accepted by the government: In its latest report, the Parliamentary Committee noted that the government has accepted all of the fourteen recommendations and did the following:
- Set up the Committee on Digital Competition Law (CDCL) in February to explore the recommendations and prepare a Digital Competition Bill [read more].
- Established a Digital Markets and Data Unit (DMDU) within CCI as a specialized interdisciplinary center of expertise for Digital Markets
The Parliamentary Committee urged the CDCL to focus on the ten Anti-Competitive Practices (ACPs) identified by the Standing Committee and to appraise the Committee on its findings at the earliest.
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