IAMAI: Most Members Against Separate Digital Markets' Competition Rules; Startups Also Oppose IAMAI's Recommendations

An “overwhelming majority” of members of the Internet and Mobile Association of India (IAMAI) are opposed to a separate competition law for digital companies as well as to ex-ante regulations, the industry body’s president Subho Ray wrote in an email to the grouping’s members.

In the email by Ray, it has been written in the backdrop of recent opposition from Indian tech founders to IAMAI’s draft views on digital competition law. Indian internet entrepreneurs have also alleged IAMAI of being a “mouthpiece of Big Tech”.

Sanjay Gupta, Google India Country head
Source: Linkedin

Shivnath Thukral, Whatsapp India Public Policy Director Source: Linkedin

It was reported that Indian internet entrepreneurs are up in arms against what they term as a lack of “credence” in IAMAI, the nodal industry grouping, and are demanding a change in the leadership of the apex body, which is currently chaired by Google India country head and vice president Sanjay Gupta, with WhatsApp India public policy director Shivnath Thukral being the vice chairman.

The IAMAI’s 24-member governing council is set to undergo elections later this month, and the new chairperson and vice chairperson will be elected.

“The genesis of the recent social media and media buzz is the issue of the government setting up a committee to purportedly bring in a separate competition law for digital companies. One of the key features of the proposed new competition law is likely to be ex-ante regulations. This means even before you have become large or dominant, your company would be subject to the new provisions,” Ray wrote in the email.

He added that the issue was first put before more than 75 members “of different segments in the public policy committee” for their views on March 6. The IAMAI plans to submit its views to the Committee on Digital Competition Law (CDCL) that was formed by the central government in February this year. Subsequently, drafts of its submissions were shared with more than 400 members.

In its note, the IAMAI has flagged that the house panel’s recommendation of designating systemically important digital intermediaries (SIDIs), or a small number of players that can negatively influence competitive conduct in digital ecosystem, lacks clarity, makes underlying assumptions and has “absence of an evidence-based approach”.

The industry body has said in its note that by requiring designated SIDIs to not give preference to their own products over competitors’, the house panel report aims to protect every single competitor, whether efficient or not, and not the competitive process.

Startups Oppose Separate Law on Digital Markets

Indian startups plan to oppose the draft views prepared by the Internet and Mobile Association of India (IAMAI) for submission to a committee which is examining the need for a separate law on competition in digital markets.

According to these startups, the industry body is batting for Big Tech platforms. In a draft note circulated among its members, the IAMAI flagged several observations made in a Parliamentary Standing Committee on Finance report of December 2022, on anticompetitive practices by tech majors. It plans to write to the Committee on Digital Competition Law (CDCL) on these issues.

The association, which represents Big Tech platforms as well as Indian startups, has asked its members to respond with their comments by May 1. This comes at a time when Indian startups have been accusing the big Internet firms, especially Google, of anticompetitive practices. The Competition Commission of India is hearing a petition against Google’s in-app purchase policy, filed by an alliance of Indian startups.

The Madras High Court is also hearing a similar case filed by matchmaking platform operator Matrimony.com. The CDCL was constituted by the government in February this year to examine the need for, and also draft, a Digital Competition Act.

The Madras High Court has asked Google not to remove Matrimony.com’s app from Play Store, giving temporary relief to the matchmaking website in its legal battle with the technology giant over a new in-app billing system. The court, in an interim injunction, asked Google not to remove the app till June 1. According to Chennai-based Matrimony.com, Google has made the Play Billing System mandatory and sole option for payments for app developers and imposing a fee of 15-30 per cent depending upon the annual revenue of app developers. Matrimony.com, India’s largest online match making company, approached the High Court against Google with the main contention that the US company’s payment policy violates the law and imposing 11-26 per cent fee on revenue will cause hardship and irreparable loss to all the App developers. “It is a great relief and the fee structure proposed by Google is a death knell to Indian start-ups. Google is forcing app developers to agree to its payment policy of charging a service fee at the rate of 11 per cent and 26 per cent even with respect to the payments made by customers through its new users’ choice /alternate billing system without providing any services at all,” said Murugavel Janakiraman, chief executive officer of Matrimony.com. “Google is trying to circumvent the Competition Commission of India’s (CCI) order which directed Google not to restrict app developers from using third party billing or payment processing services, either for in-app purchases or for purchasing an app,” he said. Prior to this, app developers had to use Google Play Billing System (GPBS) for all transactions, including paid app downloads and in-app purchases with a commission of around 15-30 per cent. However, as per the new billing system, though users can opt for third-party billing options, a service fee of 11-26 per cent was imposed on them.

Source: Business Standard

European commissioner for the Internal Market Thierry Breton unveiled a list of 19 online platforms, including Instagram, TikTok and Twitter, as having user numbers so big they will come under stricter regulatory rules for content. The list which also includes services from Amazon, Google, Meta, Instagram and Microsoft puts them in a category under a new EU law, known as the Digital Services Act (DSA), imposing measures from August such as annual audits and a duty to effectively counter disinformation and hate content.

Founder of an Indian tech startup has said “Some of the startups are planning to meet over the next few days to prepare a communication opposing IAMAI’s views,” on the condition of anonymity since the discussions are private.