House panel seeks to rein in Big Tech firms with digital competition law

Source: The post is based on the article “House panel seeks to rein in Big Tech firms with digital competition law” published in Business Standard on 23rd December 2022

What is the News?

The Parliamentary Standing Committee on Finance has presented a report titled ‘Anti-competitive practices by Big Tech companies’. The committee has presented a set of recommendations to rein in Big Tech companies.

Why is there a need to regulate Big Tech companies?

Technology companies such as Alphabet (which owns Google), Meta (which owns Facebook), and Amazon are among those recognised the world over as Big Tech companies that act as crucial digital intermediaries. 

These companies have been accused of allegedly abusing their market position using chunks of user data. Recently, the Competition Commission of India (CCI) penalized Google for “anti-competitive” practices related to Android devices.

What are the recommendations given by the Parliamentary Standing Committee to regulate Big Tech companies?

A digital competition law for regulating the anti-competitive practices of these Big Tech companies.

Frame a definition for Systemically Important Digital Intermediaries(SIDIs) that need tighter regulations. The classification could be based on revenues, market capitalisation, and the number of active users.

Specialized digital markets unit within the CCI with skilled experts, academics, and attorneys enabling the commission to closely monitor the SIDIs as well as emerging SIDIs.

Competitive behaviour needs to be evaluated ex-ante before markets end up monopolized. The ex-ante approach is forward-looking regulation, in contrast to initiating an investigation after an anti-competitive act has been committed–the ex-post approach. 

SIDIs must not favour their own offers over the offers of their competitors when mediating access to supply and sales markets.

Big Techs should not exploit the personal data of end users of the platform in certain ways for advertising to ensure a level playing field. 

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