Digital Competition Bill: Gatekeeper tag likely for top digital startups

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₹4,000 crore or global sales of $30 billion or gross merchandise value of ₹16,000 crore or global market capitalization or fair value of $75 billion and also meet the criterion of 10 million end users or 10,000 business users will be designated as SSDE. In addition, any enterprise which does not meet these criteria but has significant presence in the market for specified services including internet search, advertising services and operating system, in CCI’s view, will get the tag of an SSDE.

Experts pointed out that the thresholds appear to have received the most attention in terms of them being quite low for both financial strength test and user-spread test. “For example, a threshold of ₹4,000 crore has been suggested for turnover in India, but there is lack of any empirical basis supporting such a number," said Pranjal Prateek, a partner at law firm Khaitan & Co.

Prateek explained that the Committee on Digital Competition Law noted that the equivalent number in EU is 7.5 billion euros. The proposed India turnover number does not justify being many times lower, even after accounting for per capita income disparities, he said.

On the threshold of number of users, the report took general note of active internet users, linguistic and regional considerations and household earnings, but again doesn’t provide any empirical basis to arrive at low thresholds, he said. “With over 800 million smartphone users in India, such low thresholds need more robust basis," Prateek said.

According to Sharma of CIRC, given that India is a growing economy, subjecting domestic enterprises to too many regulatory restrictions in terms of product design and user interface can hamper its growth. “The proposed law in its current form will adversely