Parliamentary panel on finance discusses the business model of Big Tech companies

The Parliamentary standing committee on finance, led by Bharatiya Janata Party’s Jayant Sinha, on Tuesday met representatives of digital economy businesses and discussed business models as part of its study on the competitive practices in the sector.

The panel had a “constructive and congenial” discussion about digital economy, opportunities created for small businesses, investments by these new age companies and their revenue streams with the representatives of the companies, said a person familiar with the discussions, seeking anonymity. The companies will have to submit written answers to specific queries later, he added.

The interaction with representatives of Big Tech companies will help the panel find out about ‘anti-competitive practices by Big Tech companies,’ according to information on the Lok Sabha website, and is one of the 12 key economic subjects taken up by the committee for a detailed study.

The extensive and detailed recommendations submitted by the Sinha-led panel on bankruptcy reforms last year formed the basis for proposals to amend the Insolvency and Bankruptcy Code, which are being finalized.

An email query sent to the panel seeking comments for the story remained unanswered till press time.

Meta Platforms Inc, Microsoft Corp., Google LLC and Apple Inc. declined to comment for the story.

The committee discussed issues such as the profitability of e-commerce platforms, extent of investments, data collected by social media networks from users, advertisement on social media platforms and types of business opportunities being created for small businesses by e-commerce platforms, the person said.

“The revenue model and ad business of big tech have been at the centre of a number of CCI investigations,” said Prasanto K. Roy, a technology policy consultant.

Many big tech companies are under Competition Commission of India (CCI)‘s lens for alleged anti-competitive practices. Investigations include alleged ad bias and abuse of dominance by a search engine, promotion of brands owned by an e-commerce platform that is supposed to be neutral, and a phone maker allegedly abusing its dominant position as an app marketplace provider and forcing developers to use its proprietary payment system.

When big tech companies are taken to regulators, things have not gone well for them, said Roy. “The parliamentary panel may help provide some balance. This will also help the Parliament look into competition law in terms of adequacy and implementation,” he said.

Policymakers are exploring the need for a new Digital Markets Act, or to introduce certain guidelines on data collection and usage in the Competition Act to govern businesses, Mint reported on 18 August.