Founders Urge Regulation Against Digital Gatekeepers After NCLAT Ruling
Indian startup entrepreneurs are urging the government to implement proactive regulations to curb anti-competitive practices by dominant digital platforms. This demand has intensified in the wake of the National Company Law Appellate Tribunal's (NCLAT) recent judgment on the Competition Commission of India's (CCI) antitrust ruling against Google.
NCLAT Upholds CCI’s Findings Against Google
On March 28, NCLAT upheld crucial aspects of the CCI’s antitrust ruling concerning Google's Play Store policies. The tribunal affirmed that Google engaged in unfair and discriminatory business practices by enforcing the mandatory use of the Google Play Billing System (GPBS) for app sales and in-app purchases. This requirement effectively restricted app developers from using third-party payment processors, thereby strengthening Google's monopoly and limiting market competition.
Even with this landmark win for regulators and startups, NCLAT set aside certain other orders of the CCI and cut Google's fine from ?9,364 million to 2,167 million significantly. This relief in part reflects the intricacies of the legal fight and the changing regulatory landscape of India's digital economy.
Startups Ask for Tighter Regulation
The verdict of the tribunal has reopened the debate within India's startup world about how additional stricter and aggressive regulations are necessary to ensure a level playing field. Local businessmen believe that while the verdict establishes Google's anti-competitive practice, it only goes half way in ensuring the tech giants don't force upon the market prohibitive policies killing innovation and giving undue advantage to smaller companies.
"While the penalty cut is a slight letdown, the tribunal's clear assertion that Google's payment system is anti-competitive is of greater significance," said Vinay Singhal, co-founder of Stage, a home-grown video streaming service. He emphasized that much work still needs to be done to counter monopolistic behavior that stifles the development of Indian digital companies.
The Bigger Picture: India's Regulatory Stance on Big Tech
India has been probing more and more the business practices of international technology companies doing business in its economy. With more than 700 million netizens and a fast-growing digital economy, the nation is an important battleground for international tech giants, including Google, Apple, and Meta. Indian regulators have in the recent past moved to harden the country's competition laws and make sure that market leaders do not exploit their market dominance.
A number of industry players have raised concerns about Google's dominance in the mobile world, specifically by virtue of its dominance over Android and the Play Store. Startups complain that the absence of competing payment platforms compels developers to give Google high commissions, eating into their profits and hampering them from scaling businesses.
Way Forward: Regulatory Reforms and Policy Interventions
- Indian government is being appealed to implement measures to better control digital platforms. Interventions that can be considered include:
- Mandatory Alternative Payment Options: Providing app creators with the opportunity to incorporate additional payment systems.
- Platform Neutrality Regulations: Stopping internet behemoths from giving an advantage to their own offerings relative to rivals.
- Fair Revenue-Sharing Models: Developing regulations that set fair commissions for app stores and digital stores.
- Tougher Antitrust Enforcement: Enabling regulators to act more quickly against monopolistic behavior.
The NCLAT judgment has created a precedent for future regulatory actions, but policymakers now need to convert these judicial successes into strong frameworks that promote fair competition. As India builds its digital economy further, the balance between promoting innovation and avoiding market dominance will continue to be a policy priority.
For Indian startups, the battle against anti-competitive conduct is far from won. While the tribunal ruling is a move in the positive direction, industry players emphasize that sustained vigil and active governance will be critical to ensure a level playing field in the digital space.
