Published: 29th Jun, 2023
Context
In a letter to the Ministry of Corporate Affairs, various stakeholders have demanded that the Committee on Digital Competition Law (CDCL) to conduct its proceedings by including smaller stakeholders for more transparency.
Background
- India’s Digital Competition Act is in the works amid growing concern among policymakers about the dominance of tech giants in the digital economy, and the need to ensure a level playing field for all players, including startups in the market.
- The proposed new digital competition law is expected to promote competition and consumer protection in India. ?
Key-demands
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The Ministry of Corporate Affairs formulated a Committee on Digital Competition Law (CDCL) to work on the contours of the upcoming law in India. (Following the Parliamentary Standing Committee on Finance’s 53rd Report on ‘Anti-competitive Practices by Big Tech Companies’ (Report) in December 2022.) |
- The stakeholders have urged the MCA to hold an "open consultative public engagement process" while drafting the Digital Competition Bill, which is understood to be in the final stages.
- Concerning issues:
- Impact on consumers: The stakeholders involved are concerned that the proposed Digital Competition Act would impact a wide range of subjects such as digital inclusivity, user experience, data protection and security, foreign investment, cost of doing digital business for MSMEs, and there would also be an indirect impact on cost for consumers, etc.
- Direct impact on stakeholders: The proposed law directly and indirectly affects a much wider range of stakeholders.
- Adoption of ex-ante laws: The letter also makes a case against the adoption of ex-ante laws under the new digital competition law.
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Ex-ante framework
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What’s the need to regulate digital economy?
- Significant growth in the sector: Between 2014 and 2019, India’s “digital economy” grew 2.4 times faster than the Indian economy as a whole.
- Involvement of big tech companies: A few large technology companies have significantly contributed to this growth. However, globally as well as in India, often these companies act both as intermediary platforms and providers of services and goods on those platforms.
- This has heightened concerns about potential economic harm brought about by the concentrated structure of the digital economy.
- Therefore, competition regulators across jurisdictions have highlighted the need to regulate the behaviour of big-tech companies in digital markets.
- Despite existing regulation, due to the rapid pace at which digital businesses grow a need was felt to evaluate competition in digital markets ex-ante.
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In India, competition in digital markets is regulated by the Competition Commission of India (CCI) under the Competition Act, 2002 (Competition Act). |
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