Digital Competition Bill 2024
Source: Indian Express
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Overview
- News in Brief
- What are the features of Digital Competition Bill 2024?
- Competition Commission of India
Why in the News?
India has proposed a new digital competition law.
News in Brief
- India has proposed a new digital competition law that could stop tech giants like Google, Facebook, and Amazon from self-preferencing their own services or using data gathered from one company to benefit another group company.
- The draft law, called the Digital Competition Bill, 2024.
- Also has provisions to set presumptive norms to curb anti-competitive practices before they take place, and promises to impose heavy penalties.
- If this were to go into force, it could require big tech companies to make fundamental changes to their various platforms.
What are the features of Digital Competition Bill 2024?
This is an analysis of the Digital Competition Bill.
What is the draft digital competition bill?
- The emergence of ‘Big Tech’ companies over the last twenty years has spurred a widespread call for their regulation.
- India is also addressing this issue.
- The government established the ‘Committee on Digital Competition Law’ (CDCL) in 2023 to investigate and report on the necessity of a distinct law for regulating competition in digital markets.
- Following over a year of discussions, the CDCL presented its report to the Indian Parliament in the second week of March 2024.
- The report is accompanied by the Digital Competition Bill, 2024 (DCB). This draft is currently open for public consultation until May 15, 2024.
Key Features of Digital Competition Bill 2024
- Ex-ante regulation
- The current ex-post framework (intervening after an event occurs) under the Competition Act, 2002, does not facilitate timely redressal of anti-competitive conduct by digital enterprises.
- Legislation should regulate only those enterprises that have a significant presence and the ability to influence Indian digital market.
- Significant Digital Enterprises (SSDEs)
- Certain features of digital markets allow digital enterprises to swiftly gain influence.
- These features include
- Collection of user data which can allow large incumbent enterprises to enter related markets
- Network effects where the utility of a service increases when the number of users consuming the service increases
- Economies of scale wherein incumbents can offer digital services at lower costs as compared to new entrants.
- Designating entities offering certain core digital services as SSDEs for ex-ante regulation, which are susceptible to market concentration.
- These include search engines, social networking services, operating systems, and web browsers.
- Penalties
- Recommended that contraventions under the draft Bill should be addressed by imposing civil penalties.
- For calculating the ceiling on penalties, the Committee recommended the use of global turnover of enterprises.
- The Committee also recommended capping the penalty at 10% of the global turnover of SSDEs.
- Enforcement
- Empower the Director General, appointed under the 2002 Act, to investigate any contraventions when directed by the CCI.
- CCI should bolster its technical capacity including within the Director General’s office for early detection and disposal of cases.
- Constituting a separate bench of the National Company Law Appellate Tribunal for the timely disposal of appeals.
Competition Commission of India
- The Competition Commission of India (CCI) is the chief regulatory body responsible for enforcing competition laws and promoting fair competition in India.
- Established under the Competition Act, 2002
- Aims to prevent practices that have an adverse effect on competition, promote and sustain competition in markets, protect the interests of consumers, and ensure freedom of trade carried out by other participants in markets in India.
Functions and Objectives
- Preventing Anti-Competitive Practices: CCI investigates and takes action against anti-competitive agreements, abuse of dominant positions, and mergers and acquisitions that could potentially harm the competitive landscape.
- Promoting Fair Competition: The CCI works to create a level playing field by promoting competition and curbing monopolistic practices, ensuring businesses operate under fair conditions.
- Consumer Protection: One of the key objectives is to protect consumer interests by ensuring they have access to a wide range of goods and services at competitive prices.
- Regulating Combinations: The CCI scrutinizes mergers and acquisitions to prevent combinations that may lead to a substantial reduction of competition in the market.
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