In a crucial decision, the Centre on Monday constituted a 16-member inter-ministerial committee to examine the need for a separate law on competition in digital markets. The panel has been tasked with submitting its report, including a draft Digital Competition Act, within three months, sources close to the development said. 

The Standing Committee on Finance, headed by BJP MP Jayant Sinha, recently recommended the enactment of the Digital Competition Act.

The committee

The Inter-ministerial Committee, which will be headed by Manoj Govil MCA Secretary, comprises of Sangeeta Verma, Chairperson, Competition Commission of India (CCI); Saurabh Srivastava, Chairman, Indian Angel Network and Co-founder, NASSCOM; Aditya Bhattacharya, Professor of Economics (retd) from Delhi School of Economics; and five personnel from leading law firms (Pallavi Shardul Shroff from Shardul Amarchand Mangaldas & Co; Haigreeve Khaitan from Khaitan & co; Anand S Pathak, P&A Law Offices; Harsha Vardhana Singh, IKDHVAJ Advisers LLP and Rahul Rai, Axiom5 Law Chamber). The Panel will also include nominees from NITI Aayog, Department of Commerce, the Department of Economic Affairs, the Department of Consumer Affairs, the Department for Promotion of Industry and Internal Trade (DPIIT), and the Ministry of Electronics and Information Technology (MEiTY).

The Panel’s terms of reference include a review as to whether existing provisions of the Competition Act 2002 and the rules and regulations framed thereunder are sufficient to deal with the challenges that have emerged from the digital economy and to examine the need for an ex ante regulatory mechanism for digital markets through separate legislation.

The committee has also been tasked with studying the international practices on regulation in the field of digital markets. The Panel will be required to study other regulatory regimes, institutional mechanisms, and government policies regarding competition in digital markets. 

Also the Panel has been tasked to study the practices of leading players/ systemically important digital intermediaries (SIDIs) which limit or have the potential to cause harm in digital markets, sources added.

The Centre’s latest move to constitute a 16-member inter-ministerial committee comes close on the heels of the Parliamentary Standing Committee on Finance, headed by BJP MP Jayant Sinha, recommending in its recent report on “Anti-Competitive Practices by Big Tech” (tabled in December 2022) that a Digital Competition Act is needed to ensure a fair, transparent, and contestable digital ecosystem.

The Standing Committee on Finance has recommended that India identify the small number of leading players and market winners that can negatively influence competitive conduct in the digital ecosystem as “systemically important digital intermediaries (SIDI)“ and adopt definitions to ex ante regulate their behaviour.

The competitive behaviour needs to be evaluated ex-ante before markets end up monopolised instead of the ex post evaluation being carried out at present, the Standing Committee had recommended in December last year.