Digital competition Bill: Online cos tell Parl panel to protect innovation

The Parliamentary Panel is looking into the role of the Competition Commission of India (CCI) in an evolving economy, particularly the digital landscape

The thresholds for the ex ante (preventative) regulations under the Draft Digital Competition Bill should be increased in a manner that protects the domestic startups and innovation, the Indian online startups and tech product companies have told a parliamentary panel, according to the people in the know. 

The panel is looking into the role of the Competition Commission of India (CCI) in an evolving economy, particularly the digital landscape. Sources said that the committee has sought the views of the Ministry of Corporate Affairs (MCA) on the suggestions made by some of the Indian online players. 

The ex ante regulations for the draft Digital Competition Bill (DCB) were prepared by the expert committee led by then secretary of corporate affairs ministry Manoj Govil in March 2024. The DCB provisions set quantitative and qualitative criteria for systemically significant digital enterprises (SSDE), such as turnover in India of not less than Rs 4,000 crore or global turnover of not less than $30 billion. The other criteria includes gross merchandise value in India of not less than Rs 16,000 crore, global market capitalisation of not less than $75 billion. It also says if the core digital service provided by the enterprise has at least one crore end users or 10,000 business users, it would be a SSDE. 

The MCA has been in the process of extensive consultations on the draft bill with not just industry stakeholders, but also other government departments and ministries, including the Ministry of Electronics and Information Technology and Ministry of Consumer Affairs.  Some of the startups and online players that Business Standard spoke to confirmed the development. “We did get an email for feedback and we responded. Having said that we are in favour of the ex-ante framework,” said a founder of a social media platform on condition of anonymity. Players such as dating firm Trulymadly, Matrimony.com and others have been called for feedback. An email sent to TrulyMadly did not elicit a response, while Gupshup could not be contacted. 

“The Digital Competition Bill has a threshold on two segments- revenue and number of users. We are of the opinion that the threshold on both the revenue and users need to be increased. We believe that if these two threshold suggestions are considered, then the DCB with ex-ante provision is the right way to control the big techs,” Murugavel Janakiraman, founder and CEO, Matrimony.com, told Business Standard.

 

He also added that it is not that India is the first country to do so. The European Union has just finalised the Digital Markets Act. “Unlike others, India's digital ecosystem is much larger and we have to set up our own agenda and policy. The DCB has come at the right time and is directionally correct,” said Janakiraman. 

A competition law expert said, “As Indian online players and startups grow, they will manage to cross these thresholds which may then become restrictive for them. Several may come in the ambit of present thresholds too”. 

Speaking at the CII Global Economic Policy Forum in December last year, CCI Chairperson Ravneet Kaur had stressed that the government was very conscious of the fact that India is a hub of innovation and entrepreneurship with a large number of startups, unlike the European Union (EU), which has brought such laws. 

“We have the third-largest startup ecosystem in the world. We use what’s done outside as a guide… We should work within the Indian economy, because our role is to provide a level playing field to promote sustained competition in Indian markets,” Kaur had said. 

Harsh Malhotra, minister of state of corporate affairs, had also recently said that the government is not in a hurry to bring the Digital Competition Bill and wants to follow due process and have more deliberations on the proposed legislation before introducing it.