Building back better

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Wise policymaking is need of the hour

IBLJ 2110 leader
Oct.2021
India Business Law Journal

Rebuilding after the pandemic was never going to be an easy task. Restoring confidence within communities and companies, coaxing workers back to offices and repairing the economy all need to happen even as the world grapples with climate change and its effects on the planet. As Greta Thunberg, the Swedish climate activist, put it: The pandemic has “turned everything upside down”. Understanding how everything has changed is critical to getting it right.

For new entities, structures and relationships have occupied novel spaces that have emerged even as legions of companies, and communities, across India continue their struggles with covid-19. The boom in digital unicorns and the rush of investment into these companies is cause for celebration, yet these entities represent a mere sliver of the economy. While ensuring their continued growth is vital, policies and programmes to rebuild the entire economy in a healthier and more sustainable manner are the need of the hour.

Draft e-commerce rules unveiled some months ago are the focus of this month’s Cover story. Seen as India’s attempt to rein in Big Tech, the tweaking of the rules is also testament to the considerable political clout that the bricks-and-mortar retail lobby wields. While e-retailers including Amazon, Walmart’s Flipkart and Nykaa have created online platforms that have enabled the growth of many small and medium-sized companies, their progress has also thrown up challenges for offline retailers who have had to rethink, and even abandon, their ventures. It is important to recognise that both offline and online retailers should co-exist in the interest of consumers.

Commentators have been vociferous in their criticisms of the draft e-commerce rules. The ban on flash sales ­­– deeply embedded within the DNA of e-retail ­­– while also wanting to rein in abuse of dominance, an area currently within the ambit of India’s vigorously enforced competition laws, suggests a case of over-regulation at best and of creating confusion at worst.

Add to this the fact that the Consumer Protection Act does not provide for an investigative authority and “the possibility of erroneous orders being passed … exponentially increases”, says one antitrust lawyer, adding that this could have a devastating effect on the economy, competition, and e-commerce entities’ incentive to innovate. Policymakers looking to chart a new path as the pandemic wanes should do better.

In Who’s in control, we turn the spotlight on a notable change that the Securities and Exchange Board of India (SEBI) is looking to bring about within the fabric of companies. A recent consultation paper suggests doing away with the age-old concept of promoters and shifting to a “person in control”. The SEBI says “promoter” is a word that has passed its use-by date, as family groups no longer effectively control large conglomerates and the actual ownership and controlling rights of a company have transferred to private equity funds or alternate investment funds. The market watchdog wants to change em­phasis from promoters to controlling shareholders, or the so-called person in control. Is this new class of persons in control merely old wine in a new bottle?

In The briefing we analyse the government’s attempt to pro­vide clarity with the Information Technology (Intermediary Guide­lines and Digital Media Ethics Code) Rules, 2021. The consensus appears to be that the document falls short of addressing the most controversial aspects of the rules aimed at regulating digital news publishers and OTT (over the top) platforms. Meanwhile, several courts have imposed a stay on the government’s enforcement of the rules against digital news publications. More clarity is undoubtedly required.

This month’s What’s the deal? is a survey of in-house counsel from Seoul to Singapore to Mumbai and beyond, who reflect on their relationships with their law firm counterparts. As we discover, while the majority surveyed expressed the importance of a harmonious relationship, many have misgivings. For instance, suggesting that law firms “price their output and deliverables that add value to our business, rather than their time to deliver the output”, Jolly Abraham, at private equity company True North in Mumbai, says law firms should adopt legal tech to ensure that lawyers are doing high-value legal work.

Are law firms in India allowed to have a website? This has long been debated, with many remaining cautious until the pandemic prompted lawyers and law firms to embrace online engagement tools. This month’s Intelligence report analyses what makes a good legal website, and which firms are achieving the best online engagement. Our research found that the websites that do the best are those that are content-rich, feature innovative technologies, and offer much more than rudimentary information about their services.

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