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Panel meet scheduled June 1-2 to freeze Digital Competition Bill draft

The inter-ministerial panel set up by the government to frame the draft of the Digital Competition Bill will meet on June 1-2 to fine tune and freeze the draft.

The back-to-back meetings are seen as the last lap of the drafting exercise sources said.

Once enacted, the law will fundamentally alter the regulation of digital markets in India.

The Committee on Digital Competition Law (CDCL), appointed by the Ministry of Corporate Affairs (MCA), is expected to lay down a formula to identify gatekeeper firms and impose certain obligations that need to be observed ex-ante, sources added.

Big tech demurs
The panel has endorsed the requirement for an ex-ante framework, which is opposed by big tech firms such as Google, Meta, Uber and Amazon. These firms have already made submissions to the MCA-appointed committee on the proposed Digital Competition Act (DCA).

Flipkart, Zomato, and the National Restaurant Association of India (NRAI), among other organisations, too made their submissions to the panel.

A significant feature of the proposed draft Digital Competition Bill is the penalty provision of upto 10 per cent of the global turnover of an enterprise found to have violated the ex-ante regulations.

Ambit of panel
The panel — which was set up on February 6 — has overshot the three-month deadline for finalising its report and framing the draft law.

The working groups set up by the panel have submitted their presentations. All stakeholder consultations have been completed.

It may be recalled that the CDCL has been tasked with examining the need for an ex-ante regulatory mechanism for digital markets through a separate legislation. It was also tasked with preparing a draft Digital Competition Act.

The panel will also have to review whether the existing provisions in the Competition Act and the rules and regulations framed under it are sufficient to deal with the newer challenges emerging from the digital economy.

Need for separate law
India is contemplating the enactment of a Digital Competition Act at a time when there is growing concern among policymakers around the world over the power and dominance of tech giants in the digital economy, and the need to ensure a level playing field for all market players.

Competition law experts are still divided over whether India needs a separate digital competition law. Some contend it would be premature for India to go for an ex-ante framework through a separate law to prevent anti-competitive conduct of big tech firms.

The government, as part of its Digital India mission, expects the country’s digital economy to touch $1 trillion by 2025-26.

Break from sector-agnostic framework
The Standing Committee on Finance had, in its 53rd report titled ‘Anti-competitive practices by big tech companies’, 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, according to competition law experts.

It is crucial to analyse the objectives that policymakers seek to achieve by introducing ex-ante regimes, the challenges that may be associated with these frameworks, and the international guidance on the subject. Further, it is necessary to discuss the implications of these frameworks for the startup economy, facilitation of competition at downstream levels, catalysing innovation, and ensuring the protection of consumer interests, they said.

Experts also stressed the need to ensure that ex-ante frameworks do not overlap or conflict with other areas of policy such as the proposed Digital India Act and the Digital Personal Data Protection Bill, 2022. The Hindu BusinessLine

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