The Ministry of Corporate Affairs-appointed 16-member inter-ministerial Committee on Digital Competition Law (CDCL) has firmed up its recommendations, and the report is near completion, sources in the ministry said on Monday. 

The report is likely to be submitted to Finance and Corporate Affairs Minister Nirmala Sitharaman within a week (certainly before the model code of conduct for general elections kicks in), they added.

It is for the government to take a call as to whether further broader consultation on the report is needed with the public or not before acting on the recommendations of the panel, sources added.

Seperate law

The panel, which was set up on February 6 last year, was tasked with submitting a report in three months and considering whether India needed a separate digital competition law or not. The CDCL was also tasked with framing a draft Bill on the proposed digital competition law.

The possibility of going in for public consultations once the new government takes office cannot be ruled out, sources said. This could mean the government may miss the monsoon session for the enactment of a digital competition law.

However, it is still not clear whether the Panel would, in its report, favour an ex-ante framework for regulating the digital economy or not. 

“The CDCL has certainly taken time to go deep into the issues. But it is well deserved (given the importance of the subject matter),” sources said.

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Asked if the panel had met recently, the Ministry of Corporate Affairs (MCA) source replied in the negative. The possibility of an in-person or digital meeting in the next few days was also ruled out, and the report is now before the members of the CDCL for their final assent. 

Digital economy

India’s digital economy is slated to touch the $1 trillion mark in 2025-26, according to government forecasts.

Domestic start-ups are pinning their hopes on the announcement of a roadmap for a separate digital competition law.

They are hoping that the government will come to their rescue with a specific legal framework that would give them a level playing field against Big Tech and cast specific obligations on systemically important digital intermediaries (SIDIs).

Competition authorities across the globe are finding it increasingly difficult to effectively regulate “digital markets.”

This is because much of the current competition law principles have evolved after decades of implementation in traditional markets. 

Competition authorities are therefore looking at enacting separate legislation aimed specifically at disciplining the “biggest players” in the digital markets.

Need for regulation

The Parliamentary Standing Committee on Finance, headed by Jayant Sinha, recommended in December 2022, in its 53rd Report on “Anti-Competitive Practices by Big Tech companies,” that there is a need for an ex-ante regulation of anti-competitive practices by big-tech companies in India.

The Standing Committee had also listed out ten areas/instances of anti-competitive practices that need to be addressed by the new framework. These are bundling and tying; anti-steering practices; deep discounting; platform neutrality; data usage; exclusive tie-ups; search and ranking; restricting third-party applications; mergers and acquisitions; and advertising policies.

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For putting in place an ex-ante regulatory framework, the Parliamentary Panel had recommended that an approach similar to the European Union’s (EU) Digital Markets Act (DMA) be followed. It remains to be seen if CDCL endorses this approach or not.

Since the emergence of the “digital economy” and “internet economy,” achieving a fine balance between innovation and regulation has been an uphill task for most competition authorities across the world.