To curb anti-competitive practices in digital markets, a Parliamentary panel on Thursday proposed ex-ante regulations, category of systemically important digital intermediaries and a new digital competition law, apart from suggesting a more transparent deal-making process between tech companies and news publishers.

Besides, the committee has asked digital market entities to desist from “anti-steering”, “deep discounting”, “self-preferencing”, “search & ranking preferencing” and other practices that will impact competition in the market.

The suggestions are part of the Standing Committee on Finance’s report on ‘Anti-Competitive Practices by Big Tech Companies’ tabled in Parliament on Thursday and comes against the backdrop of rising concerns over unfair business practices in digital markets, a PTI report stated.

In its report, the panel has mentioned about the peculiar challenge posed by the winner-take-all markets where winners emerge within three to four years after the market starts to develop and the market tips in one direction by the time policies are formulated.

“Therefore, the committee recommends that competitive behaviour needs to be evaluated ex-ante before markets end up monopolised instead of ex-post evaluation being carried out at present,” it said.

A quick review of the parliamentary panel review by Indianbroadcastingworld.com highlighted that those who deposed before the members of parliament included Indian representatives of companies like Facebook, Netflix, Amazon, Apple, Google, Digital News Publishers’ Association, All India Gaming Federation, Alliance of Digital India Foundation and Twitter, amongst others.

In a significant recommendation, the panel has called for classifying leading entities that can negatively influence competitive conduct in the digital ecosystem as ‘Systemically Important Digital Intermediaries’ (SIDIs) based on their revenue, market capitalisation and number of active business and end users.

“India should also adopt definitions to ex-ante regulate the behaviour of SIDIs as has already been done by various legislations across the world,” the committee said, adding that stakeholders along with CCI and the central government must collaborate for a reasonable definition of SIDIs.

Apart from saying that the government should consider and introduce a Digital Competition Act to ensure a fair and transparent digital ecosystem, the panel has pitched for revamping the Competition Commission of India (CCI).

“The Committee note(s) that gatekeepers have been found to restrict the installation or operation of third-party applications. The Committee opine that an SIDI should allow and technically enable the Installation and effective use of third-party software applications or software application stores using, or Interoperating with, its operating system and allow those software applications or software application stores to be accessed by means other than the relevant core services of that platform. Further, the Committee recommend(s) that an exception may only be made in case of preventing data from the SIDI or another business user from being transferred to government of a foreign adversary,” the report pointed out.

The parliamentary panel also touched upon the Big Tech’s ad business, saying it’s a monopolistic threat as it owns every step in a system that connects ad sellers and buyers and gives the tech companies an unfair edge over the market.

“The Committee thus recommend(s) that an SIDI should not process, for the purpose of providing online advertising services, personal data of end users using services of third parties that make use of 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. It should provide advertisers and publishers with access to the performance measuring tools of the gatekeeper and the data necessary for advertisers and publishers to carry out their own independent verification of data,” it added.

Further, the committee noted that India has diverse and numerous news publishers who get advertising revenues primarily through SIDIs and are of the opinion that regulatory provisions are required to ensure that news publishers are able to establish contracts with these SIDIs through a fair and transparent process.

Stressing on the need for India to enhance its competition law to address the unique needs of digital markets, the report noted: “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 therefore recommend(s) that the government should consider and introduce a Digital Competition Act to ensure a fair, transparent and contestable digital ecosystem, which will be a boon not only for our country and its nascent start-up economy but also for the entire world.”

The committee also suggested that a specialised Digital Markets unit be established within the CCI, staffed with skilled experts, academics and attorneys, enabling the Commission to closely monitor SIDIs and emerging SIDIs, provide recommendations to the Central or the federal government on designating SIDIs, review SIDI compliance and adjudicate on digital market cases and conduct for efficient and effective monitoring of digital markets per se, while doing so, the Committee would also expect that similar unfair practices of other digital players, even though not specifically designated as SIDIs, should also be generally kept track of, monitored and acted upon in larger consumer interest.