Digital Competition Law

Context

Recently, over 10 civil society and private organisations has addressed a letter to the government asking for the Committee on Digital Competition Law (CDCL) to conduct its proceedings more transparently by opening up its consultation process to the public at large.

Background

• Earlier, Centre has ordered setting up a committee that will review whether existing ‘antitrust laws’ in the country are equipped to deal with the challenges that have emerged from the digital economy, and submit to the government a draft Digital Competition Act within three months.
• They were also ordered to make consultation with several stakeholders’ including civil societies.
• Also, in December 2022, the Standing Committee on Finance had proposed ‘ex-ante regulations’, category of systemically important digital intermediaries and a new digital competition law to curb anti-competitive practices in digital markets.
• These digital intermediaries, according to the panel, should be classified based on their revenue, market capitalisation and number of active business and end users.

Proposed Ex-ante framework:

• The Standing Committee on Finance had in its 53rd report titled ‘Anti- competitive practices by big tech company’ suggested an ex-ante framework to regulate ‘Systemically Important Digital Intermediaries’ (SIDIs) under a new Digital Competition Act.
• This signals a new era of ex-ante frameworks, meant to cover only SIDIs in digital markets, marking a significant exit from the existing sector-agnostic framework which covers all market players.
• Experts also stressed the need to ensure that ex-ante frameworks do not overlap or conflict with other areas of policy, for instance, the proposed Digital India Act and the Digital Personal Data Protection Bill, 2022.
• The significance of achieving a balance between regulating anti-competitive conduct in digital markets and preventing overregulation and harm to innovation and consumer interests was also emphasised.

About the Committee on Digital Competition Law (CDCL):

• Members composition: the Secretary of the Ministry of Corporate Affairs (MCA), and will include eight other members including the Chairperson of the Competition Commission of India.
  • The joint secretary for competition at the MCA will join the committee as a member secretary.
  • The remaining seven members of the committee are from the private sector.

The Ministry of Electronics and IT (MeitY), Niti Aayog, Department of Commerce, Department of Economic Affairs, Department of Consumer Affairs, and the Department for Promotion of Industry and Internal Trade (DPIIT) will also have to nominate representatives to the committee.

• Objective:
  • As per the order, the committee will “review whether existing provisions in the Competition Act, 2000 and rules and regulations, framed thereunder are sufficient to deal with the challenges that have emerged from the digital economy”.
  • It will also examine the need for an ex-ante regulatory mechanism for digital markets through a separate legislation and study the practices of “systemically important digital intermediaries” which “limit or have the potential to cause harm in digital markets”.

The Digital Competition Law:

• Aim: The proposed new digital competition law is expected to promote competition, innovation, and consumer protection in India’s rapidly evolving digital economy, which is expected to touch 1 trillion dollars by the year 2025-26.
• Need of the Law: India is contemplating the enactment of a Digital Competition Act at a time when there is growing concern among policymakers about the power and dominance of tech giants in the digital economy, and the need to ensure a level playing field for all players in the market.