To address anticompetitive behaviors in the realm of digital markets, a Parliamentary panel has put forth recommendations today, proposing the implementation of proactive regulations, the identification of systemically important digital intermediaries (SIDs), and the enactment of a new digital competition law.

The committee has urged digital market entities to refrain from engaging in practices such as “anti-steering,” “deep discounting,” “self-preferencing,” and “search & ranking preferencing” that could adversely impact market competition.

These proposals are outlined in the report on ‘Anti-Competitive Practices by Big Tech Companies’ presented by the Standing Committee on Finance in Parliament. The recommendations are a response to growing concerns regarding unfair business practices within digital markets.

The report highlights the unique challenge posed by winner-take-all markets, where dominant players emerge within 3-5 years of market development, leading to a market tilt before appropriate policies can be formulated. In light of this, the committee advocates for ex-ante evaluation of competitive behavior to prevent market monopolization, contrasting with the current ex-post evaluation approach.

A noteworthy suggestion from the panel is the classification of influential entities in the digital ecosystem as ‘Systemically Important Digital Intermediaries’ (SIDs) based on criteria such as revenue, market capitalization, and the number of active business and end users. The committee emphasizes the need for India to adopt definitions for regulating the behavior of SIDIs, drawing inspiration from global legislations, and recommends collaboration between stakeholders, the Competition Commission of India (CCI), and the central government for a comprehensive SIDIs definition.

In addition to proposing the introduction of a Digital Competition Act for ensuring fairness and transparency in the digital ecosystem, the panel advocates for a revamp of the CCI. It suggests the creation of a specialized digital markets unit within the CCI, staffed with skilled experts, academics, and attorneys. This unit would closely monitor SIDIs, offering recommendations to the central government regarding SIDIs designation and other related activities.

The committee underscores the importance of platform neutrality, emphasizing that SIDIs should not show preference for their own offerings over those of competitors. Addressing concerns about ‘anti-steering practices,’ the panel asserts that a SIDI should not condition access to its platform.

Furthermore, the committee insists that a SIDI should not process the personal data of end users, utilizing the services of third parties for online advertising, especially those relying on the platform’s core services.