India Set to Pass the Digital Competition Bill, 2024

Published on: May 17, 2024 14:19 IST

India very soon going to pass the Digital Competition Bill, 2024, following recommendations from the Committee on Digital Competition Law, which submitted its report in February. The report suggesting the necessity of supplementing the current ex-post Regulations under the Competition Act, 2002, to better address the concerns of the digital world.

Inspired by European regulatory frameworks, India has proposed a new digital competition law with aim to curb the dominance of tech giants such as Google, Facebook, and Amazon. The draft law, known as the Digital Competition Bill, 2024, seeks to prevent these companies from self-preferencing their services or using data from one company to benefit another within their group.

The Bill introduces presumptive norms to tackle anti-competitive practices proactively and imposes substantial penalties, potentially amounting to billions of dollars, for violations. If enacted, this could force major tech firms to implement fundamental changes across their platforms.

This proposal mirrors the European Union’s Digital Markets Act (DMA), which fully came into effect earlier this year. The DMA mandates large tech firms like Alphabet, Amazon, and Apple to open their services and prohibits them from favoring their offerings over those of rivals. The law was enacted in response to a long history of anti-competitive behavior by these companies.

Major Proposals of the Digital Competition Bill

The Digital Competition Bill, 2024 aims to curb anti-competitive practices with a forward-looking approach and impose substantial penalties. Drawing inspiration from European regulatory frameworks, this bill intends to regulate major technology firms like Google, Facebook, and Amazon, ensuring they do not misuse their dominant positions.

  1. Predictive Regulation: Unlike the reactive framework of the Competition Act, 2002, the Bill introduces a proactive regulatory approach (ex-ante) to anticipate and prevent anti-competitive practices.
  2. Significant Entities: The Bill aims to identify Systematically Significant Digital Enterprises (SSDEs) based on turnover, user base, and market influence. These SSDEs will be restricted from self-preferencing and anti-steering practices.
  3. Associate Digital Enterprises (ADEs): The legislation will also regulate ADEs, ensuring that their operations do not undermine competitive practices by benefiting from shared data within their group companies.

Criticism and Concerns by Tech Giants

Large tech corporations have criticized the proposed Bill, arguing that the stringent rules could impose heavy compliance burdens and stifle innovation. Concerns about arbitrary decision-making by the Competition Commission of India (CCI) and potential negative impacts on platform-based small businesses have also been raised.

Fostering Digital Competition

Government officials advocate for the Bill by highlighting the history of anti-competitive behavior by big tech firms and the need for a framework to effectively manage the dynamics of the digital market. The goal is to ensure a fairer playing field for new entrants and smaller companies, potentially leading to broader innovation and healthier competition within the digital ecosystem.

More About Digital Markets Act (DMA)

The Digital Markets Act (DMA) is a major legislative Regulation which were adopted by the European Union in 2022 to promote competition in the digital market. It targets large online platforms, termed “gatekeepers,” such as Google, Apple, and Facebook. The DMA restricts self-preferencing practices, mandates interoperability of messaging services, and enforces data portability. It imposes fines up to 10% of global turnover for non-compliance, showcasing its stringent regulatory approach. The Act aims to enhance consumer choices and foster a fair, transparent digital economy

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