Exclusive: Internet companies mail dissent note against IAMAI’s stand on digital competition bill

Over half a dozen companies including Paytm, Bharat Matrimony, Shaadi.com, Match Group (which owns Tinder), ShareChat, and Spotify have written to the Committee on Digital Competition Law (CDCL), saying they don’t agree with apex internet industry association’s submission on the digital competition bill.

Internet and Mobile Association of India (IAMAI) had submitted its views to the CDCL opposing the prescription of ex-ante regulations for digital companies, saying that ex-ante measures “may limit growth not only of the market in question but the digital economy altogether”.

Also read | IAMAI members flag concerns surrounding ex-ante regulations

The association has been facing heat over its stance on issues such as digital competition with Indian startups alleging the body was pushing the interests of big tech platforms. The narrative had built up in the run up to IAMAI’s governing council elections that concluded last month with big tech representatives ceding way to Indian companies.

Also read | Startup chiefs join fray for IAMAI elections

While IAMAI’s submission to CDCL was made prior to the election, the dissent note was sent to the panel on June 16.

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ET had reported on May 13 that IAMAI had submitted its views to CDCL, opposing the prescription of ex-ante regulations for digital companies. It had noted in its submission that firms like Paytm did not agree with its view.

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IAMAI’s members include companies such as Google, Meta, Microsoft and Netflix as well as Indian tech firms like Paytm, Ola, PhonePe, Unacademy, ShareChat and Byju’s.

Ex-ante regulations aim to address issues identified beforehand pre-emptively by laying out a list of dos and don’ts for stakeholders.

CDCL was constituted by the government on February 6 to draft a competition law for digital platforms.

Also read | Indian firms oust Big Tech companies from IAMAI in poll coup

THE DISSENT

“Regrettably, IAMAI’s recent submission ignores the fundamental reality of why these discussions about ex-ante regulation are taking place both here and around the world: the status quo has failed, and is failing, to adequately constrain the power and conduct of the dominant digital gatekeepers that now control so many aspects of commerce and our lives,” the dissent note said.

“We understand that ex-ante regulation is needed in the digital sector and India would benefit from a new regulatory framework to improve the competition in the digital economy. Currently, the protracted nature of traditional antitrust litigation is expensive and extensive,” it added.

ET has reviewed the dissent note.

IAMAI president Subho Ray did not respond to requests for a comment.

The group of seven companies, in the note, also underscored that case-by-case adjudication of violations by a limited number of gatekeepers in digital markets has created a system “that encourages uncertainty, privileges incumbents, and deprives individuals/digital companies from participating in the digital markets fairly”.

They have recommended designating systemically important digital intermediaries (SIDIs) to identify such gatekeepers.

The recommendation of designating SIDIs was also made by the parliamentary standing committee on finance to CDCL.

This recommendation was also opposed by IAMAI in its draft views circulated to its members prior to submitting them to the CDCL. The opposition was then removed from IAMAI’s final views to the committee.

THE BACKDROP

Interestingly, Sameer Nigam, cofounder and chief executive officer of PhonePe, had termed ex-ante competition regulations “a bad idea”, saying that founders “opportunistically backing ex-ante regulations against others today will beg for less” regulation against themselves tomorrow. He was reacting to an ET report last month about Paytm, a rival of Walmart-owned fintech PhonePe, opposing submissions by IAMAI to CDCL.

On May 25, the new IAMAI governing council was elected for a period of two years with Dream11 cofounder and chief executive Harsh Jain assuming charge as its chairperson. Makemytrip cofounder and group CEO Rajesh Magow became vice-chairperson and Times Internet vice chairman Satyan Gajwani was elected treasurer.

Jain, Magow and Gajwani replaced Google India country head Sanjay Gupta, WhatsApp’s India public policy director Shivnath Thukral, and Razorpay cofounder and CEO Harshil Mathur, respectively.

Other members of the new governing council include PhonePe’s Nigam, Infibeam Avenues’ Vishwas Patel, Shaadi.com’s Anupam Mittal, IndMoney’s Ashish Kashyap, Ixigo’s Aloke Bajpai, Nazara Technologies’ Nitish Mittersain, Innov8 founder Ritesh Malik, MapmyIndia’s Rohan Verma, Matrimony.com’s Murugavel Janakiraman, in addition to executives from companies such as Billdesk, Indifi, Indian Express, Info Edge, IndiaMart, Cred, Jupiter, Paytm, Hungama, Paisabazaar, Mobikwik, and Razorpay.

Times Internet — part of the Times Group, which publishes ET — is a member of IAMAI.

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