Digital Competition Bill may affect major start-ups

Of 23 select large digital enterprises in India, as many as thirteen, including Zomato, Swiggy, Paytm, IRCTC, Makemytrip, Flipkart would come under the purview of the digital competition bill (DCB), according to a recent analysis by CUTS Institute for Regulation & Competition (CIRC). In a report, the think tank, however, added that the remaining firms in the set studied, including Ola, Bookmyshow, Blinkit and Zepto are likely to remain unaffected by the proposed regulations.

In the current form, the draft DCB designates a Systemically Significant Data Enterprise (SSDE) based on two criteria: financial and user thresholds. In the case of user thresholds, any enterprise with over 10 million end-users or 10,000 business users in its core digital service will be considered SSDE and, therefore, it will be subjected to thr proposed ex-ante regulations.

The report said that end users are going to have a tough time using apps once the draft DCB comes into force. The report further added that the the current discourse on ex-ante regulation in India lacks focusing on the impact on consumers. “To address this critical gap, the report places consumers at the forefront of the discussion,” it said.

The user experience is analysed through the real-life examples across four major apps – Paytm, MyJio, Makemytrip and IRCTC – in the pre- and post-DCB phases. In the context of PayTM, for instance, the users often make purchases that require delivery to a specific location. Prior to the implementation of the DCB, the app would store and use the user’s address information to automatically fill in the required fields in subsequent transactions, streamlining the purchase process and saving time and effort. However, in the post-DCB period, due to restrictions on data usage, the app may no longer be able to automatically populate this information. As a result, users are now required to manually input their address for each transaction.

Similarly, the report said that systemically significant digital enterprises or SSDEs like Makemytrip would need to unbundle its services to comply with the new legislation, and this would lead to significant changes in the user experience. “For instance, users may need to utilise separate apps for each service. Makemytrip will have to provide distinct apps for “outstation cabs” and “forex card & currency”, and the user experience may become more fragmented and less seamless as users would have to switch between multiple apps to access different services,” the report said.

As per the report, the users will also have to give constant approvals to the apps which would result in consent fatigue. “Before the implementation of the DCB, accessing an app like MyJio was a seamless experience. With the DCB in place, the app’s interface undergoes a significant change. Now, upon opening the MyJio app, users are immediately greeted with a pop-up, somewhat humorously referred to as a “Pop-Up Party.” This pop-up requires consent of end users and business users to intermix or cross use their personal data collected from different services,” the report said. Financial Express