The proposed Digital Competition Bill is aimed at tackling anti-competitive practices by big tech companies. However, it is learned that the bill could harm the Indian MSMEs and startups. A recent survey by public-policy think tank The Dialogue shows reveals that it could disrupt businesses that rely heavily on digital services.
One major concern is the restriction on personalized ad placements as around 71.6 per cent of the MSMEs and startups surveyed argue that the bill would reduce their advertising reach. Personalized ads allow small businesses to reach the right audience and at a low cost. Similarly, 47.7 per cent of respondents said that placing a ban on bundled services like integrated payment systems and promotional deals would make things harder.
The survey makes a valid point and the government should take a more targeted approach instead of just imposing some blanket rules. Specific anti-competitive practices can be tackled without disrupting the entire system as India has a capable regulator in the Competition Commission of India (CCI).
Digital services are the backbone of MSMEs and startups today. The survey highlights the way these tools are important for the businesses. About 82.2 per cent of the respondents said that digital platforms help them in improving market reach 76.4 per cent credited them for business expansion. Nearly 69.1 per cent reported lower customer acquisition costs and operational expenses. About 64 per cent saw better returns on their marketing investments.
MSMEs and startups are the driving force of the Indian economy. Restricting the tools will simply slow down their progress. The government must tread carefully and ensure that the bill does not create unintended roadblocks. The approach should be balanced as well as flexible to allow the Indian digital economy to thrive apart from addressing genuine concerns about big tech practices. It is not about choosing between regulation and growth, but it is also about finding the right balance for both.
