Frequent run-ins between MCA and MeitY officials over regulation of digital market are a thing of the past as a clear demarcation has been made on their respective roles in regulation.

In a move that would remove possibility of duplicity of regulations on digital markets and their smoother enforcement, the Centre has now made it clear that Ministry of Corporate Affairs (MCA) would be the nodal Ministry to look into all the “competition issues in the digital market”.

On the other hand, the Ministry of Information Technology (MeitY) will look into sector specific issues, the Centre has decided.

This clarity of roles and oversight areas is critical as it comes at a time when the Government is working towards introducing several pieces of legislations including Digital India Act and Digital Competition law for regulating various facets of the booming digital market in India. 

The government expects India’s digital markets to touch $ 1 trillion by 2025-26.

“A meeting between officials of @GOI_MeitY & @MCA21India was held where concerns regarding Systemically Important Digital Intermediaries (SIDIs) were discussed. It has been decided that MCA will look into the competition issues in digital market.

@GOI_MeitY will look into sector-specific & technical issues. Several meetings of the Committee on Digital Competition Law have been held in the past, and various stakeholders have been consulted for the same”, said a MCA tweet on Tuesday.

Digital gatekeepers

This tweet assumes importance as it is now clear that the upcoming Digital India Act — which is being piloted by MeitY — would not have provisions around competition issues of technology or gatekeeper platforms.  

This would also mean that the upcoming Digital Competition law would as planned look to bring digital gatekeepers including AI platforms under an ex-ante framework to be introduced through the legislation.

It maybe recalled that there was a lot of chatter in the corridors of power and MCA and CCI circles after a presentation on the proposed Digital India Act came into public domain and talked of MeitY taking possible steps on regulating gatekeeper platforms on competition issues. 

Many wondered if there was duplication of efforts given that a MCA appointed inter ministerial panel — Committee on Digital Competition law — was already tasked to examine the need for a separate legal framework for ex-ante regulation of SIDIs. 

The CDCL is in the last lap of firming up a draft of the Digital Competition Law.  It is understood that during the deliberations both MCA and MeitY were vying with each other to regulate new transformative areas of technology such as Artificial Intelligence (AI).

Experts’ take

Samir Gandhi, Co-Founder, Axiom5law Chambers, a law firm, said both the MeITY and MCA are key stakeholders involved in the regulation of digital markets. 

“The MCA’s announcement clearly identifies it as being the primary ministry tasked with looking into overarching competition issues in the digital market, and the MeITY has been tasked with regulating technical and sector specific issues. This is a welcome clarification since it will avoid possible regulatory overlaps or turf wars between multiple agencies of the government”, Gandhi said.

Nisha Kaur Uberoi, Partner& National Head Competition Law, Trilegal, said this is a welcome clarification and an excellent instance of harmonious construction and inter-ministerial co-operation to ensure that there is no regulatory overlap — the CCI as the competition regulator will have supremacy on all issues of competition law agnostic of sector including SIDIs and MEITY will provide the requisite technical input.