LIVE | Draft Digital Competition Bill: Fear Over Impact On Startups | Newscentre | CNBC TV18

Summary

The discussion on CNBC TV18's News Center revolves around the draft Digital Competition Bill in India, which has raised concerns among startups and legal experts. Fears include increased compliance burdens and potential stifling of innovation due to ex-ante rules and heavy penalties. Stakeholders, including lawmakers and officials, convened to debate the bill's impact on fostering innovation and competition. Senior Advocate Gopal Jen, Dr. Nitish Sharma, and Advocate Apar Gupta shared insights on the bill's alignment with India's digital economy vision, constitutional principles, and the need for a balanced approach that doesn't deter innovation while addressing market concentration.

Takeaways

• 📜 The draft Digital Competition Bill in India has raised concerns among startups and legal experts due to potential increased compliance burdens and stifled innovation.
• 💡 The industry fears that the bill could deter private equity and venture capitalists from investing in Indian startups, affecting the growth of the digital economy.
• 🛑 The bill includes provisions for presumptive norms to curb anti-competitive practices before they occur and imposes heavy penalties, which could reach up to 10% of global turnover.
• 🗣️ Stakeholders, including lawmakers and officials from various ministries, convened to debate the bill, emphasizing the need to balance competition and innovation.
• 👩‍⚖️ Supreme Court Justice Indu Malhotra advised the government to consider industry concerns and promote a competitive environment without hindering innovation.
• 🌟 Senior Advocate Gopal Jain emphasized the need for laws to support innovation, be sector-specific, and have a consumer benefit test to align with India's vision of a $5 trillion economy.
• 🔍 Apar Gupta, co-founder of the Internet Freedom Foundation, discussed the relevance of the ex ante approach in the Indian context and its potential impact on smaller players in the market.
• 💼 Dr. N. S. Nappinai from CUTS Institute highlighted the rapid growth of the digital economy and cautioned against regulations that could inhibit the sector's natural growth.
• 🤔 The panelists agreed on the need for a thorough legal assessment and market study to determine the bill's impact on fostering a competitive environment and consumer interests.
• ⏳ There is a call for greater consultation, empirical evidence, and a focus on national goals and priorities to guide the development of tech legislation in India.

Q & A

What is the primary concern regarding the draft digital competition bill among startups and legal experts?

The primary concern is that the ex ante rules in the bill may increase compliance burden and stifle innovation, potentially discouraging private equity and venture capitalists from investing in Indian startups.

What is the purpose of the provisions in the draft law to set presumptive norms?

The provisions aim to curb anti-competitive practices before they occur, which is why the term 'ex ante' is used, and they promise to impose heavy penalties that can go up to as high as 10% of the global turnover.

What was the main topic of discussion at the Indian Habitat Center on July 16th?

The main topic of discussion was the digital competition Bill, where stakeholders including lawmakers, key officials, and members of the judiciary debated its implications.

What does Justice Kohli emphasize as crucial in the legislation process?

Justice Kohli emphasizes the need to promote a competitive environment without deterring innovation and to carefully consider the concerns voiced by the industry before finalizing the legislation.

What are the key principles that should form the basis of any law according to Gopal Jen?

According to Gopal Jen, any law should be supportive of national priorities and policy goals, foster innovation, attract investment, create jobs, and be sector or service-specific, with a consumer benefit test.

What is the role of the Constitution of India in shaping modern legislations as per Justice Kohli?

Justice Kohli states that the Constitution of India is the bedrock of any legislation, and modern legislations must be in line with constitutional principles, including the right of affirmative defense, the test of proportionality, and checks and balances.

What is the ex ante approach and why is it being considered in the draft bill?

The ex ante approach is a preemptive regulation method that sets up guardrails and safeguards to prevent anti-competitive actions without waiting for evidence of abuse of dominance. It is being considered to address the dynamic nature of digital markets.

How does the draft bill define 'core Digital Services' and 'systematically significant digital enterprises'?

The draft bill defines 'core Digital Services' and 'systematically significant digital enterprises' (SSD) based on financial thresholds, user thresholds, and qualitative criteria set by the CCI, which may include both large tech companies and smaller, lesser-known service providers.

What are the potential impacts of ex ante regulation on businesses as discussed by the panelists?

The panelists discuss that ex ante regulation could increase costs for businesses, divert capital from service development, and potentially harm competition by targeting specific players without evidence of abuse of dominance.

What recommendations do the panelists have for the way forward regarding the draft bill?

The panelists recommend waiting for empirical evidence from other jurisdictions, ensuring the voices of Indian companies and startups are heard, and developing core design principles that align with India's national goals and priorities for technology legislation.