If early discussions in government lead to a planned new law, digital economy titans risk punishment for violating a set of proposed behavioural norms intended to ensure that digital markets stay competitive and established corporations do not abuse their position.
According to a person familiar with government deliberations, two parliamentary standing committees have examined the need for such “dos and don’ts” for businesses in the digital economy, and discussions for a Digital Markets Act, which would prescribe the behavioural norms, are ongoing.
The person, who asked to remain anonymous, claimed that these standards, which forbid actions like “self-preferencing” by e-commerce platforms (promotion of their private labels) and using business user data in the e-commerce platform to compete in the market, are likely to carry a penalty for violation. The fine most likely will be based on the company’s earnings during the years of default.
Currently, CCI has the authority to fine a company found guilty of anti-competitive agreements or abuse of dominance up to 10% of its annual sales. According to the source, discussions on the matter have taken place between the Competition Commission of India (CCI), the ministries of business affairs, electronics, and information technology. The proposed law’s general structure, however, has not yet been decided.
The proposed “dos and don’ts” represent a significant change in the country’s approach to competition regulation because they would give the regulator more control over market oversight and ex-ante regulation of Big Tech rather than investigations based on anti-competitive behaviour that has already occurred.
