House panel says Big Tech's ad business monopolist threat, wants CCI amped up for digital age

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The Parliamentary Standing Committee on Finance termed the advertisement business of Big Tech as a “monopolist threat”, saying it gives these companies “an unfair edge over the market”.

The committee has recommended that India should enhance its competition law to address the unique needs of the digital market.

In its report “Anti Competitive Practices by Big Tech Companies”, tabled in the Parliament on December 22, the committee said that Big Tech companies "owned every step in a system that connected ad sellers and buyers", giving them an unfair edge.

It said a systematically important digital intermediary (SIDI) should not process the personal data of users with the help of third parties which make use of the core services of the platform.

"It should provide advertisers, information on a daily basis, regarding price paid by the advertiser and the remuneration received by the publisher," the committee said.

The report recommends defining Big Tech companies as Systemically Important Digital Intermediaries (SIDIs) on the basis of their revenues, market capitalisation and end users.

It urged Big Tech to provide advertisers and publishers with access to performance-measuring tools and data necessary for advertisers and publishers to carry out independent verification of advertisements.

Digital Competition Act

The committee recommended that the government introduce a digital competition act to ensure fair, transparent and contestable digital ecosystem.

"Unlike traditional markets, the economic drivers that are rampant in digital markets quickly result in a few massive players dominating vast swathes of the digital ecosystem," the committee said in the report.

It also recommended strengthening the Competition Commission of India (CCI) so that it could take on new responsibilities.

The committee suggested that a digital markets unit be established within the commission, with experts who could monitor SIDIs and emerging SIDIs and also offer suggestions to the Centre.

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Deep discounting  a concern

The House panel also criticised deep discounting offered by platforms and termed it a matter of concern.

"The committee thus recommends that a SIDI should not limit business users from differentiating commercial conditions on its platform, including price, increased commissions, delisting and other equivalent terms and conditions," the committee said.

"Further, a SIDI should not prevent business users from offering the same products or services to end users through third-party online intermediation services or through their own direct online sales channel at prices or conditions that are different from those offered through the online intermediation services of the platform," it added.

Deep discounting by e-commerce platforms has been a contentious issue, with traders and small business owners saying predatory pricing puts them at a disadvantage.

There have been complaints about alleged anti-competitive ways of various technology platforms and firms. In 2019, the Delhi Vyapar Mahasangh filed a complaint with the Competition Commission of India accusing Amazon and Flipkart of anti-competitive practices, predatory pricing and preferential treatment of sellers among others.