A U.S. lobby group, the U.S.-India Business Council (USIBC), representing major technology companies, including Google, Amazon, and Apple, has called India to reconsider its proposed Digital Competition Bill. This legislation is akin to the European Union’s Digital Markets Act of 2022 and aims to impose stringent regulations on big digital firms operating in India.
USIBC is a part of the U.S. Chamber of Commerce and has expressed concerns that the new regulations could increase user costs and hamper innovation.
In a letter dated May 15, the USIBC urged India’s Corporate Affairs Ministry to reevaluate the bill, highlighting that the draft Indian law is ‘much further in scope’ than its EU counterpart, reported Reuters.
The proposed Digital Competition Bill seeks to address the growing dominance of a few large digital companies in the Indian market. It targets firms with a global turnover exceeding $30 billion and at least 10 million local users, including tech giants like Google, Amazon, and Apple.
Key provisions of this bill include prohibiting companies from exploiting non-public user data, promoting their services over competitors, and restricting the downloading of third-party apps.
According to USIBC, these measures could lead to reduced investment in India, higher digital service prices, and a narrower range of available services. The letter also warns that such regulations could significantly force targeted companies to alter their business strategies, potentially affecting their growth and operations in India.
The push for stricter regulations comes amid ongoing investigations by the Competition Commission of India (CCI) into the practices of major tech companies. In 2022, the CCI fined Google $162 million for antitrust policies. The body is also probing Google in a dispute over its in-app billion system with local app developers.
CCI is also investigating e-commerce giants like Amazon and Flipkart for anti-trust laws.
In contrast to the USIBC’s stance, a coalition of 40 Indian startups has voiced support for the bill, arguing that it will curb monopolistic practices and create a more level playing field for smaller companies.
The current stance of USIBC is hypocritical, as each country can decide on the competition policy. Given that European states can delineate the specific guidelines and restrictions for “gatekeepers,” it begs the question of why countries like India, boasting the world’s largest open market, cannot enact their laws in this regard.
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