Digital Competition Bill
Context: The parliamentary committee on Finance urges the government to finalize the digital competition bill to address anti-competitive practices in digital markets. More on News:
- Committee emphasizes the need to fill vacant positions at the Competition Commission of India (CCI) to ensure effective regulation.
- In December, the Committee recommended formation of Digital Competition Law, and defining Big Tech companies as Systemically Important Digital Intermediaries (SIDIs) on the basis of revenues, market capitalisation and end users.
- Introduction of Digital Competition Act: The government should introduce a Digital Competition Act to address the specific needs of the digital market and ensure a fair and transparent digital ecosystem.
- Strengthening the Role of CCI: The Competition Commission of India (CCI) should be empowered to address anti-competitive behavior in digital markets.
- Establishment of Specialized Digital Markets Unit: A specialized unit within CCI should be established to focus on digital markets.
- Monitoring of SIDIs: The unit would monitor established and emerging Systemically Important Digital Intermediaries (SIDIs).
- Recommendations on Designation: The unit would provide recommendations to the central government on designating SIDIs.
- Reviewing Compliance: The unit would review compliance with digital market regulations.
- Adjudication on Cases: The unit would adjudicate on cases related to digital markets.
- Big Tech refers to a group of major technology companies like Google, Facebook, Amazon, Apple, and Microsoft.
- It is a dynamic concept, with new companies entering and existing ones potentially leaving this category over time.
- Acquisitions and Mergers: Large firms buying highly valued start-ups without being subject to merger control rules. The lack of capturing certain mergers and acquisitions due to thresholds not being met is a concern.
- Platform Neutrality/Self-preferencing: Big Tech favoring their own services or subsidiaries on their platforms, providing unfair advantages and negatively affecting downstream markets.
- Data Usage: Big Tech companies collecting massive amounts of customer data, potentially misusing it for tracking and profiling customers, creating barriers for smaller competitors.
- Restricting Third-Party Applications: Preventing the installation or operation of third-party applications, limiting user choice and competition.
- Adjacency/Bundling and Tying: Forcing consumers to buy related services by linking them to the main product, making it challenging for developers to establish fair fees and reducing competition.
- Anti-steering: Using provisions to prevent business users from using alternatives, stifling choice and leading to anti-competitive practices.
- For example, application stores mandating the use of their own payment systems for application purchases.