Hindu Editorial Analysis: 3-May-2023
The Internet and Mobile Association of India (IAMAI) has found itself at odds with several Indian start-ups due to its opposition to the introduction of a new law aimed at addressing anti-competitive practices of Big Tech firms. The IAMAI criticized the recommendations made by the Parliamentary Standing Committee on Finance, arguing that they are not targeted or proportionate and could stifle innovation. This essay delves into the details of the recommendations, IAMAI’s concerns, and the criticisms leveled by start-ups.
Recommendations to Tackle Anti-competitive Practices:
The Parliamentary Standing Committee on Finance proposed several measures to curb anti-competitive practices in digital markets. These recommendations include:
- Ex-ante regulations: The committee suggested adopting ex-ante regulations, which require companies to adhere to certain standards of behavior before any breaches occur, aiming to protect consumers.
- Designating Big Tech entities: The panel recommended classifying Big Tech firms as “systemically important digital intermediaries” and subjecting them to specific ex-ante provisions.
- Digital competition law: The committee suggested the need for a new digital competition law to address the challenges posed by Big Tech companies.
- Discouraging anti-competitive practices: Digital market entities were advised to refrain from practices such as “anti-steering,” “deep discounting,” “self-preferencing,” and “search and ranking preferencing” that lead to unfair competition.
IAMAI’s Concerns:
The IAMAI expressed concerns regarding the recommendations put forth by the Parliamentary Standing Committee on Finance. The industry body argued that the suggestions lacked a well-articulated policy objective and failed to adopt an evidence-based approach to identify the need for regulation. IAMAI believes that these broad and ambiguous recommendations could stifle innovation, competition, and the benefits that accrue to markets and users.
Alignment with Big Tech Firms:
The IAMAI’s submission aligns with the views expressed by the Asia Internet Coalition (AIC), another industry association representing big tech companies such as Meta, Apple, Amazon, Twitter, and Google. The similarity between the IAMAI and AIC’s stance further fueled criticism from Indian start-up founders who accused the IAMAI of favoring the interests of foreign Big Tech companies over domestic start-ups.
Criticisms by Indian Start-ups:
Several prominent Indian start-up founders have criticized the IAMAI for allegedly promoting views that favor foreign Big Tech companies. They argue that the IAMAI is acting as a lobbying group for Big Tech propaganda and misinformation, and accuse it of being “anti-Indian.” This isn’t the first time start-ups have voiced their displeasure with the IAMAI, as earlier this year, online gaming companies, also IAMAI members, criticized the industry body’s submission on draft online gaming rules, citing poor scoping and the need for a major reevaluation.
Why In News
Tensions escalate as a widening rift emerges between Indian start-ups and the industry body Internet and Mobile Association of India (IAMAI), fueling a growing divide over key policy issues and regulations for the tech sector.
MCQs about Indian Start-ups
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What is the primary reason for the widening rift between Indian start-ups and IAMAI?
A. Disagreements over funding strategies
B. Differences in business models
C. Opposition to new regulations for Big Tech firms
D. Conflict of interest regarding international partnerships
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Which type of regulations did the Parliamentary Standing Committee on Finance propose to curb anti-competitive practices?
A. Ex-post regulations
B. Ex-ante regulations
C. Reactive regulations
D. Post-ante regulations
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What is the common concern raised by IAMAI and the Asia Internet Coalition (AIC)?
A. Insufficient government support for start-ups
B. Lack of digital infrastructure in India
C. Negative impact on innovation and competition
D. Inadequate consumer protection measures
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How have some Indian start-up founders criticized IAMAI’s stance?
A. Accusing it of being pro-foreign Big Tech
B. Criticizing its membership policies
C. Highlighting its failure to support domestic start-ups
D. Questioning its influence over government policies
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