Targeted ads could face new regulation
The way technology firms tap internet users’ data to flood them with advertisements has become a focal point of the debate on India’s proposed law on regulating big tech firms. The draft Digital Competition Bill prepared by the ministry of corporate affairs is open for public inputs now.
It bars “inter-mixing or cross-using” of data from different services offered by digital economy firms without user consent—a move aimed at ensuring a level playing field in the digital economy.
However, industry executives say this will come in the way of application developers monetizing their platforms.
The bill lists “advertising services” as a “core digital service” alongwitheightothers—online search engines, online social networking sites, interpersonal communication services, operating systems, web browsers, video sharing platform service, cloud services, and online intermediation services.
Using data of consumers from one service—search engines for instance—for using on another, such as advertising, requires user consent.
Consumers denying consent would block application developers like online gaming firms or payment applications and social media networks from monetizing their business through ads, said an industry executive from a large digital economy firm who spoke on the condition of anonymity.
An email sent to the spokesperson for the ministry of corporate affairs on Tuesday seeking comments for the story remained unanswered at the time of publishing. However, a person informed about discussions in the government said the ministry has extended the public feedback period on the draft bill that started midMarch by another month till 15 May.
“Once stakeholders spell out any concern, the government will look into them,” the person said.
On Monday, 21 think tanks, industry associations, and several experts wrote to the ministry requesting an extension of the public consultation period by five months till 15 October, saying that the bill’s potentially wide impact on the digital economy requires in-depth, evidence-based analysis.
FIRST India (Forum for Internet, Retailers, Sellers & Traders), a division of not-for profit organization India SME Forum (ISF), wrote to the ministry on 11 April saying concerns were raised during its consultation with experts that the draft law, inspired by the EU’s Digital Markets Act, may stifle opportunities for Indian MSMEs that are heavily reliant on digital platforms for targeted advertising, identification, and discovery services.
Restricting such practices could significantly impact customer acquisition, cost savings, and accessibility for MSMEs, the forum said.
Mint has seen a copy of the letter.
“Today, advertisements have become more efficient, targeted and low cost as you need not show them in expensive broadcast platforms for niche products. Many small businesses today use online advertisements to reach consumers,” the executive quoted above said.
The Digital Competition bill bars “inter-mixing or cross-using” of data from services without user consent