Tussle between Indian start-ups & Big Techs

In Context

• There is a widening rift between some Indian start-ups and the industry body Internet and Mobile Association of India (IAMAI). 

IAMAI’s opposition to the new law for tackling Big Tech firms

• About: 
  • Internet and Mobile Association of India (IAMAI) criticised the recommendations of the Parliamentary Standing Committee on Finance to introduce a new law for tackling Big Tech firms’ anti-competitive practices. 
• What were these recommendations?
  • To curb anti-competitive practices in digital markets, the panel proposed measures like having ex-ante regulations, which are meant to protect consumers by requiring companies to follow certain standards of behaviour, as opposed to post-ante regulations that can only punish an entiry after it has breached a law.
  • There were also recommendations for designating Big Tech entitites as “systemically important digital intermediaries’ ‘ and then subjecting them to certain ex-ante provisions, and the suggestion for a new digital competition law. 
  • Further, it asked digital market entities to desist from “anti-steering”, “deep discounting”, “self preferencing”, “search & ranking preferencing” and other promotional practices that lead to consumers going for these companies in the market, impacting competition.

• IAMAI’s concern:
  • IAMAI expressed concern that the recommendations in the Report of the Parliamentary Standing Committee on Finance are neither targeted nor proportionate, the industry body said in its submission, saying these would “stifle innovation” as well.
  • The AMAI said, “Lack of a well-articulated policy objective, (and) failure to adopt an evidence-based approach to identify the need for the regulation, have led to ambiguous, broad recommendations (in the report), which will stifle innovation, competition and the benefit that accrues to markets and users”.
• Similar concern as Big Techs:
  • IAMAI’s submission was similar to the comments submitted by the Asia Internet Coalition (AIC), an industry association which also counts big tech companies like Meta, Apple, Amazon, Twitter, and Google among its members.

Criticisms by the start-ups 

• “Pro-Indian” start-ups vs “Pro-foreign” big techs:
  • IAMAI’s submission drew sharp criticism from some prominent Indian start-up founders, who accused the industry grouping of furthering views of big tech companies.
  • They have criticised it for “parroting and promoting views that are anti-Indian and pro-foreign Big Tech”.
  • Few others noted that “Start-ups are strongly in favour of a strong anti-monopoly Digital Act. IAMAI is a failing lobby for BigTech propaganda and misinformation”. Etc.
• Previous criticisms:
  • This is not the first time that start-ups have criticised IAMAI for its views on key policy issues. 
  • Earlier this year, a number of online gaming companies, that are also members of IAMAI, had written to Ministry of Electronics and IT (MeitY) opposing the industry body’s submission on draft online gaming rules that the scoping of the rules was done poorly” and the some aspects needed a “major re-look”.