Policy Wrap:Committee considers Big Tech’s ad business a ‘monopolist threat’, Meta removes content in compliance with IT Rules, 2021, over 1,400 Startups Incubated Under Startup India Scheme, and more
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Standing committee on Finance considers Big Tech’s ad business a ‘monopolist threat’
A parliamentary committee referred to Big Tech's advertising sector as "a monopolist threat" and urged the government to take swift action to prevent anti-competitive practises in the digital economy. In order to guarantee a fair, transparent, and contestable environment throughout the nation, it also recommended legislation for digital competition.
The standing committee on finance stated in its report, Anti-Competitive Practices by Big Tech Companies, which was introduced in parliament on Thursday, that Bigtechs own every step in a system that connects ad vendors and purchasers and provide the Big Tech companies an unfair edge over the market.
The committee said that competition behaviour needs to be evaluated ex ante before markets become monopolised. To ensure fair markets, they advised identifying and controlling dominant firms or market leaders that could have a negative impact on competition in the digital ecosystem. They also advised evaluating competitive behaviour.
It recommended specific actions on preferential access, platform neutrality, and data usage, among other things, and provided thorough oversight of identified SIDIs.
“It should provide advertisers information on daily basis, regarding price paid by the advertiser and the remuneration received by the publisher,” it suggested. The committee recommended that SIDIs give publishers and advertisers access to performance measurement tools and the information they need to independently verify the ad inventory.
Meta removes over 23 million items of content across Facebook, Instagram in India in compliance with IT Rules, 2021
On Thursday, Meta announced that in India during the month of November, it removed more than 19.52 million items in violation of 13 Facebook policies and more than 3.39 million items in violation of 12 Instagram policies.
Facebook reported 889 complaints through the Indian grievance procedure between November 1 and 30, and the corporation claimed it had given customers tools in 511 cases to help them resolve their problems.
According to Meta's monthly report in accordance with the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, these include pre-established channels to report content for specific violations, self-remediation flows where they can download their data, avenues to address account hacked issues, etc.
Big social media and digital platforms with more than 5 million members are required to provide monthly compliance reports under the new IT Rules 2021.
Over 1,400 Startups Incubated Under Startup India Scheme since its introduction
Som Parkash, Minister of State (MoS) for Commerce and Industry, briefed the Parliament that 656 firms were fostered over the course of the previous two years by the Startup India Seed Fund Scheme (SISFS). As many as 126 incubators were used to support the entrepreneurs as part of the Center's flagship programme. In the fiscal year 2021–2022 (FY22), the SISFS onboarded as many as 304 businesses, and in FY23, it provided support to an additional 352 firms (till November 2022).
Karnataka has the most firms that were incubated under the Startup India Seed Fund Scheme (126), followed by Maharashtra (104) and Tamil Nadu (51). There are currently 84,012 DPIIT-recognized startups operating in various parts of India.
I&B ministry releases draft policies on Animation, Visual Effects, Gaming, and Comics (AVGC-XR) sectors
To enhance India's domestic capacity and create opportunities in the Animation, Visual Effects, Gaming, and Comics – Extended Reality (AVGC-XR) sector, the Centre announced draught policies for national and state level on Monday.
The creation of a new curriculum at the secondary and tertiary levels, laying the groundwork for the "Create in India" campaign, and expanding employment prospects are all discussed in the national and state policies.
Chandra, who revealed the report, claimed that the AVGC industry in India has recently experienced unheard-of growth as a result of both domestic demand for AVGC content and the entry of numerous international players into the Indian talent pool to take advantage of offshore delivery of services. India currently contributes between $2.5 and $3 billion to the $260 to 275 billion global market.
As per the experts within the media and entertainment industry, the AVGC sector can witness a growth of 14-16% in the next decade," said the officer.
Additionally, he mentioned that there are already 30,000 indirect jobs and 1.85 lakh professionals working in the AVGC sector. By 2030, the sector would need to employ additional 20 lakh people in order to maintain current development. The AVGC specialists need a combination of technological expertise and artistic talent.
MeitY appointed as nodal ministry for online gaming
According to a gazette notification released on Monday, the Ministry of Electronics & Information Technology (MeitY) has been designated the nodal ministry for online gaming.
The Department of Sports within the Ministry of Youth Affairs and Sports has been designated as the nodal department for e-sports competitions that are multi-sport events.
The government has been drafting regulations for the online gaming industry as the industry has been under regulatory scrutiny.
“The appointment of MeitY as the central regulatory authority will provide clarity and certainty to investors, industry and consumers,” said Joy Bhattacharjya, director general, Federation of Indian Fantasy Sports (FIFS)
Indian start-ups will attract significant FDI in 2023; on track to be top startup ecosystem in the world
According to Anurag Jain, secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), startups in India would draw sizeable foreign direct investments (FDI) in 2023 as the government works to improve the environment for aspiring business owners.
According to Jain, India has the third-largest startup environment in the world, and given how well its startups are doing, it will soon overtake other countries as the top ecosystem in the world. He claims that the Startup India Seed Fund Scheme and the Fund of Funds for Startups (FFS) have both had a significant impact on this.
As of November 30, 93 AIFs (alternative investment funds) under FFS have commitments totaling Rs 7,528 crore. 773 startups have received investments from these AIFs.
Similar to this, 126 incubators under SISFS, which was started in 2021–22, have been approved for Rs 455.25 crore. As of November 30, these incubators had granted about 650 requests from startups for financial support.
Significant investment, production, sales, and employment have been achieved in key industries such large-scale electronics manufacturing, medicines, telecom and networking devices, food processing, and white goods, according to him.
Fintech startups likely to have a rollercoaster year in 2023, investors to take a conservative approach
A worsening financing winter and recent regulatory reforms are expected to make the operating climate for Indian fintech firms harsher next year.
Investors are anticipated to stay selective in their approach at least for the next 6-12 months, which could result in consolidation in the near future, according to experts, as the regulatory burden on fintechs continues and the Reserve Bank of India (RBI) moves to regulate various parts of the sector.
One of the main reasons is that the regulatory environment has rendered numerous procedures, like FLDG, inaccessible to fintechs. A lowering in financing is projected to occur in the upcoming year as a result of this and the global funding winter that has followed. The market is likely to consolidate, with collaboration models with regulated institutions seeing an increase, and companies with a weaker foundation might be shown the door.
Layoffs, lack of funding may continue through 2023
As a result of enormous layoffs by digital companies this year alone, which have eclipsed levels from the Great Recession the globe saw in 2008-2009 following the fall of Lehman Brothers, thousands of jobs were lost amid a deepening funding winter in 2022.
Approximately 65,000 workers were laid off by tech companies in 2008, and a similar number of people lost their jobs in 2009, according to data from Challenger, Gray & Christmas, a global outplacement and career transitioning firm. In contrast, more than 1,000 IT companies fired over 1,52,000 workers globally this year, exceeding the Great Recession-era levels of 2008–2009.
According to a Crunchbase data count, the US tech industry lost more than 91,000 workers as a result of widespread job cutbacks in 2022. In India, around 17,000 tech workers were fired, mostly from edtech firms including BYJU's, Unacademy, Vedanta, and others. The funding lull in the startup sector may continue for another 12 to 18 months.
According to a PwC India research, just two firms in India, Shiprocket and OneCard, reached unicorn status (value of $1 billion and above) between July and September.
There was a clear decline in Q2 of this year, and quality transaction flow had significantly dried up as investors were generally concerned. From $37.2 billion in 2021 to $24.7 billion this year, funding for India fell by a staggering 35%. According to Tracxn, edtech startups had a dramatic 39% decline from the same time last year. From $29.3 billion in January–November 2021 to $16.1 billion in the same period this year, late-stage investments decreased by 45%.
"The market will turn eventually, and disciplined founders and top talent will reap disproportionate benefits once this funding winter is over. This is the time for cockroaches and not unicorns," said Rushit Shah, CoFounder of DevX Venture Fund.
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