New Competition Law to Include Big Techs with 10% Global User Base in India: Impact on Tech Giants

India is taking a significant step towards regulating the digital landscape with a proposed digital competition law. This legislation aims to address concerns surrounding antitrust violations by major big tech companies.

Identifying Players under Scrutiny

A panel advising on the law's framework is likely to recommend including all digital companies with 10% of their global user base or business transactions originating from India. Additionally, any tech firm exceeding INR 2,000 crore in turnover within the country will fall under the law's purview, irrespective of the global user base threshold. This ensures comprehensive coverage of dominant players.

Protecting Innovation

The law is designed to avoid hindering innovation. Smaller firms are likely to be exempt, allowing them to flourish without undue regulatory burden.

Focus Areas of the New Law

The proposed legislation will target practices like abuse of dominance and search engine bias. Measures ensuring neutrality of digital platforms will be a key focus area.

Next Steps

The panel's recommendations will be submitted to the finance and corporate affairs ministries, forming the foundation for the new law. The final bill will be drafted by the corporate affairs ministry after considering inputs from various departments.

Addressing Long-Standing Concerns

This initiative comes after the Parliamentary Standing Committee on Finance urged the government to create a specific law to rein in big tech companies. Companies like Google, Apple, and Facebook have faced scrutiny for alleged anti-competitive practices and dominance abuse. In 2022, the Competition Commission of India (CCI) even imposed fines on Google in two separate antitrust cases, while Apple's app store billing practices have been under investigation.

Indian startups, who have long been vocal critics of big tech's alleged anti-competitive behavior, are likely to view this proposed law as a positive development.

India's digital competition law signifies a proactive approach to regulating the tech sector. By establishing clear guidelines and addressing concerns around big tech dominance, this legislation has the potential to create a fairer and more competitive digital marketplace in India.