Representing a unified front, nearly 40 Indian startups have voiced their strong support for the draft Digital Competition Bill. This proposed legislation, is aimed at curbing anti-competitive practices of big tech companies. “We see it as a catalyst for creating a fairer and more competitive digital ecosystem in the country, one that allows startups to thrive,” the companies said in a letter to Manoj Govil, Secretary of the Ministry of Corporate Affairs (MCA).

The companies, including Matrimony.com, TrulyMadly, Innov8, QuackQuack, Magicbricks, Hoichoi, and Medibuddy, have written to the Ministry of Corporate Affairs saying that the Bill is a step in the right direction and will address the long-standing concerns of Indian startups by reigning in practices that stifle innovation, limit consumer choice, and hinder the growth of young businesses.

While requesting that the government move forward with the Bill at the earliest and not give in to delay tactics, the startups have also asked for an upward revision of the thresholds for designating Systematically Significant Digital Enterprises (SSDEs). They have argued that the Bill should only target the real gatekeepers of the internet - firms that have long enjoyed dominant positions, accumulating extensive resources and influence to shape the rules of the digital ecosystem. By narrowly targeting the new law, the government can rein in monopolistic practices while making sure that Indian startups have the space to grow within India and beyond Indian borders to and compete globally.

The Committee on Digital Competition Law (CDCL) published its report in March this year outlining the challenges associated with anti-competitive practices of digital enterprises such as anti-steering, self-preferencing, tying and bundling in the digital markets in India. The report proposed a Digital Competition Bill providing ex-ante regulations to curb these anti-competitive practices. The report was open for public consultation, and the last date to submit comments was May 15 2024.

The proposed DCB outlined in the CDCL report resonates deeply with the startup community. We perceive it as a forward-thinking piece of legislation that directly addresses our long-standing concerns regarding monopolistic practices by dominant digital platforms. These practices have often stifled innovation, limited consumer choice, and hindered the growth of young businesses. The DCBill has the potential to be a game-changer for the Indian start-up ecosystem, the letter said.

“While we fully support the draft Bill, we propose a key revision regarding the thresholds for designating Significant Strategic Digital Entities (SSDEs). Our concern is that the current thresholds are low, and they are likely to – perhaps, inadvertently - encompass startups and other digital enterprises which are not gatekeepers. It could also severely hamper the growth potential of Indian startups and impede their ability to grow beyond Indian borders to compete globally,” the letter said.

The startups suggested increasing the financial thresholds and also provided numbers for end-user and business-user count that would better reflect the realities of the Indian start-up ecosystem.

“We also urge the MCA to move forward with the Bill at the earliest and not give in to further requests for extensions in the consultation period. We believe the current consultation period has been more than sufficient,” the letter said.

Gaurav Sahay, Practice Head (Technology & General Corporate), Fox Mandal & Associates, said Digital competition law, often referred to as antitrust law in the digital age, is a crucial component in the new age of technology, as traditional antitrust frameworks struggle to address the unique challenges posed by digital platforms.

Digital Competition Law is critical in ensuring digital markets remain competitive, innovative, and beneficial for consumers and businesses. It requires ongoing adaptation and refinement to keep pace with technological advancements and evolving market dynamics., he said.

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