In April, a controversy erupted after the industry body Internet and Mobile Association (IAMAI), whose members include both Indian companies and large foreign companies, argued against the need for a separate digital competition framework aimed at regulating "anti-competitive practices" by Big Tech companies, in a draft submission.
Indian entrepreneurs slammed IAMAI, saying that a digital competition law was indeed necessary and insinuated that the industry body's stance on the matter was a reflection of the composition of its leadership. The outgoing executive council of IAMAI comprises representatives of Big Tech companies.
This controversy will seemingly reach its climax when the results of the ongoing elections to IAMAI's governing council are announced later this month. Many Indian entrepreneurs and a few Big Tech companies have thrown their hats in the ring for the much-coveted posts of the chairperson, vice chairperson, and treasurer.
Here's all you need to know about why Indian entrepreneurs are taking on IAMAI, the way forward, and more:
What sparked the controversy?
On April 28, the IAMAI, in a leaked document intended for circulation among its members, criticized a Parliamentary committee report that urged the government to introduce a new law to tackle anti-competitive practices by Big Tech firms. IAMAI argued that such a law would stifle innovation, competition, and impact investments in startups, among other concerns.
Indian entrepreneurs opposed IAMAI's stance on the matter.
What Parliamentary committee report?
In December 2022, the Parliamentary Standing Committee on Finance released a report recommending the government to introduce a Digital Competition Law aimed at addressing alleged anti-competitive practices by Big Tech companies. The committee also suggested defining these companies as Systemically Important Digital Intermediaries (SIDIs) based on their revenues, market capitalization, and the number of end users.
A few months after that, in February, the government formed the Committee on Digital Competition Law or CDCL, which was tasked with examining the “need for a separate law on competition in digital markets”.
The leaked document mentioned above was the draft submission intended for this committee by IAMAI.
Indian entrepreneurs' reaction
Indian entrepreneurs, including MapMyIndia CEO Rohan Verma, BharatMatrimony CEO Murugavel Janakiraman, and Shaadi.com founder Anupam Mittal, have publicly voiced their criticism against IAMAI. They have accused the industry body of "parroting" the views of Big Tech companies and called for changes to be made in IAMAI's structure.
"Unfortunately today, a Google employee is the chairperson (of IAMAI) and a Meta employee is the vice chairperson. So, it is largely influenced by the interests of the global big tech companies," Janakiraman had told Moneycontrol.
Similarly, Shaadi.com founder Anupam Mittal said, "Start-ups are strongly in favour of a strong anti-monopoly Digital Act. In fact, IAMAI is failing lobby for Big Tech propaganda and misinformation... India @CCI_India and PMOIndia know better (sic)."
How did IAMAI respond to such criticism?
IAMAI President, Shubha Ray, stated that the industry body opposed the idea of a separate competition law because the "overwhelming majority" of its members were against it.
"The leaked document clearly stated that among the members who had made written submissions to us, an overwhelming majority were opposed to the idea of a separate Competition Law for digital companies as well as to ex-ante regulations," Ray said.
Ray said that the issue was first put before 75 plus members of different segments in the public policy committee for their views on March 6. Subsequently, the draft of IAMAI's submission was shared with more than 400 members in two tranches.
How did the opposing companies/entrepreneurs chart their course on dealing with IAMAI?
Sources told Moneycontrol that a splinter group of around 30-40 startups and domestic companies who are IAMAI members were considering whether to join other tech lobby groups, including a prominent rival tech association that is involved in legal action against Big Tech firms.
IAMAI member companies have also contemplated whether to seek a revamp of the lobby group's functioning and to force out tech giants from the association in its forthcoming elections, according to sources.
Did the Indian government react to the matter?
Yes. In a conversation with Moneycontrol, Minister of State for Electronics and Technology Rajeev Chandrasekhar stated that the government will not allow Big Tech companies to "corner or grab policy," and that Indian startups will be treated equally regarding policymaking.
“Around the table, we have everybody present. But we will certainly not allow the Big Tech companies to corner or grab policy. We will listen to them [Big Tech companies] as much as we listen to and give as much importance to our startups, especially Indian startups when it comes to policymaking,” he said.
Did the criticism of IAMAI affect its final submission to CDCL?
No, IAMAI maintained its stance in the draft document and submitted to the CDCL that it was against a separate digital competition law.
IAMAI firstly argued that there was no need for a separate digital competition law, as the current structure involving the Competition Commission of India has been "promptly looking into various digital competition issues". The industry body further said that there would be an impact on investment in startups due to the size or scale-based applicability of regulations.
How are the ongoing elections at IAMAI and the recent controversy surrounding the industry body related?
On May 15, IAMAI announced that 83 of its members are contesting the election for the 24-member IAMAI Governing Council. The nominees from the top three firms, based on the votes received in this election, would assume the positions of chairperson, vice chairperson, and treasurer of the association, forming its executive council.
It is this executive council, whose two current members are executives of Big Tech companies, that has received criticism from Indian entrepreneurs.
Who are the candidates contesting in the elections?
The contestants include a large number of representatives from Indian companies, such as Rohan Verma, the chief executive of MapMyIndia; Murugavel Janakiraman, the founder of BharatMatrimony; Harsh Jain, the founder of Dream11; Harshil Mathur, the founder of Razorpay; Ritesh Malik, the founder of Innov8; Chintan Thakkar, the CFO of Info Edge, and so on.
Apart from Indian entrepreneurs, employees of foreign tech bigwigs like Meta, Amazon, Google, and Netflix are also contesting in the governing council elections.
Shivnath Thukral, Head of Public Policy at Facebook India; Ambika Khurana, Director at Netflix India; Sandeep Ghosh, Country Manager of Visa in India; Manish Tiwary, Country Manager of Amazon's India consumer business; Mihir Rale, Chief Regional Counsel of Disney Star; Bikram Bedi, from Google India; Anubhav Gupta, Senior Vice President of Mastercard; and Amanpreet Bajaj, General Manager of Airbnb India, are the candidates running in the elections from the India arms of major foreign tech and media companies.
Did IAMAI see any additions to its members' list in the lead-up to the elections? If yes, why?
Yes, domestic tech companies such as Info Edge, Shaadi, BharatMatrimony, Limeroad, and MapMyIndia have rejoined the industry body to provide impetus to Indian representation in the ongoing elections.
"We had left being a member a few years back... After all this fracas of last month. In the last week, I was asked by many senior industry entrepreneurs and leaders for MapMyIndia to become a member and apply for the governing council, so that we can change the IAMAI's direction towards a better India... Joined as a member and nominated, for this reason," said MapMyIndia chief executive officer Rohan Verma.
When are the results expected?
The results of the election will be declared at the end of May 2023, and the new Governing Council will take over after the Annual General Meeting in June 2023.
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