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Why IAMAI’s submission oppossing ex-ante rules in India is surprising

Many members of the industry body had voiced in favour of ex-ante rules last year.

The Internet and Mobile Association of India (IAMAI) opposed ex-ante regulations in India in its submission to the Committee on Digital Competition Law (CDCL), whose report on this matter, and the draft Digital Competition Bill, 2024, was released by the Indian government earlier this week.

The industry association told the Committee that a separate competition law for digital companies would be too much of a burden for companies, would hamper innovation and investments in India, and that there is no consensus that ex-ante laws will address anti-trust concerns.

This position comes as a surprise because, while the initial submission of IAMAI that circulated last year was in favour of ex-ante regulations, many of its members publicly criticised this position. MapmyIndia CEO Rohan Varma, Matrimony.com CEO Murugavel Janakiraman, and People Group Founder and Shark Tank investor Anupam Mittal were among those who voiced their concerns about IAMAI publicly in May last year, accusing the IAMAI leadership of being dominated by representatives of foreign tech companies who acted against the interest of Indian consumers and companies. Eventually, the IAMAI leadership saw a major upheaval in the elections that happened shortly after with the key positions going to representatives from Indian companies. It is not clear why IAMAI did not resend its submission following the leadership change if its members were unhappy with the original submission. 

It was reported back then that Paytm, Bharat Matrimony, Shaadi.com, Tinder-owner Match Group, ShareChat, Spotify, and a few other startups wrote to the CDCL disagreeing with the submission made by IAMAI. They argued that dominant digital gatekeepers need to be kept in check and rules prohibiting self-preferencing, tying, and anti-steering are the need of the hour. However, their dissent note was not included in the CDCL’s final report.

We reached out to IAMAI asking for a comment on its current views on ex-ante regulations and the draft Digital Competition Bill but were informed that the association has not yet formed its view on the same. We will update this post if we receive an update from them.

What did IAMAI say in its submission to CDCL?

As per the report released by CDCL, IAMAI submitted the following:

  • “The current regulatory framework allows the Competition Commission of India (CCI) to act swiftly when needed without excessive regulation in the digital sector. Having two legislations applicable parallelly to all digital businesses would increase regulatory costs for companies. Rigid pre-emptive standards should not be created under the law as it may negatively affect investments, innovation, consumer choice, and welfare.
  • Additional regulation should not be considered since there is no empirical evidence suggesting any failure in the existing regulatory framework. To avoid false positives and type I errors, it is crucial to conduct detailed market studies to identify and analyse issues and concerns that require regulatory intervention and resolution.
  • The EU has recently implemented new comprehensive regulations for competition in digital markets. However, it is crucial to recognise that India’s market is distinct from that of Europe and directly adopting rules from other markets, such as Europe, without considering the local nexus could potentially damage local markets, hinder innovation, impede economic growth, and harm consumers in India.
  • After studying recent developments regarding an ex-ante regime in nations like the EU, UK, USA, Singapore, Japan, Australia, and Korea, it can be inferred that there is currently no global consensus among countries or experts regarding which ex-ante approach to adopt or whether ex-ante regulation is even necessary.
  • Broader public consultations and surveys should be carried out before making any recommendations. Additionally, there should be a brief round of public consultation on the draft recommendations, following the standard practice of other government policy proposals.”

Update (March 15, 6:20 pm): Updated the headline and the third para based on editorial input. 

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