IAMAI opposes separate digital competition law for regulating Big Tech

Established in 2004, the Internet and Mobile Association of India (IAMAI) is a industry body representing the digital services industry with over 500 Indian and multinational corporations as its members

Industry body Internet and Mobile Association of India (IAMAI) has opposed the need for a separate law that would address anti-competitive practices by Big Tech firms in their written submission to the Committee on Digital Competition Law (CDCL). This stance could potentially escalate tensions between the Indian entrepreneurial ecosystem and Big Tech companies.

The industry body's stance on the matter comes despite the opposition it faced from many Indian companies when a draft version of the submission leaked. In the leaked draft, the industry body had also argued against such a law.

Many Indian entrepreneurs insinuated that IAMAI's position on the matter was directly related to the composition of the industry body's leadership, which included members of Big Tech companies such as Google and Meta. Such Indian companies asked for a change in IAMAI's structure.

However, later IAMAI clarified that the "overwhelming majority of IAMAI members"  were opposed to the idea of a separate competition law for the digital market, signalling that it would not make any changes to the views published in the draft report.

In a release on May 16, IAMAI argued that size or scale-based applicability of regulations under an ex-ante digital competition policy will impact larger players in the market in their growth trajectory, while also limiting the growth potential of startups.

"Regulations that kick in as soon as certain financial/size-based thresholds are met, will disincentivise Indian tech companies from scaling so as to avoid additional regulations. It is pertinent to note that ex-ante regulations may affect Indian companies even before they can achieve scale to compete globally or achieve profitability. This in turn will reduce value creation and valuations," the industry body said in the release.

It is also important to note that currently, the industry body is also conducting its governing council elections wherein 83 candidates, which include founders of Indian companies and those representing foreign tech bigwigs, are in the fray.

What happened earlier

Parliamentary Standing Committee on Finance released a report in December that, in addition to recommending the creation of a Digital Competition Law, recommended classifying Big Tech companies as Systemically Important Digital Intermediaries (SIDIs) based on their revenues, market capitalisation, and end users.

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

A few months later, 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." IAMAI on May 16, announced that it has submitted its views on the matter to the committee.