Digital Competition Bill: Its core needs strengthening
The ministry of corporate affairs recently closed public consultations on the draft Digital Competition Bill (DCB) and the findings of the Committee on Digital Competition Law (CDCL). The CDCL emphasized the importance of a robust framework to support the rapid expansion of the digital ecosystem in India and recommended the introduction of ex-ante measures in form of the DCB to complement the existing ex-post framework under the Competition Act.
The DCB has received a mixed response from the digital sector. Big tech companies are opposing it by underlining its potential negative effects on innovation and investment in the digital sector.
Many startups, on the other hand, believe that the DCB is indispensable for creating a level playing field in the digital ecosystem. The DCB, much like its European counterpart, the Digital Markets Act (DMA), is built on the pillars of fairness and contestability in digital markets.
There are four key stages proposed under the DCB: (i) identification of a ‘core’ digital service (CDS); (ii) designation of systemically significant digital enterprises (SSDE) for each CDS; (iii) mandatory ex-ante compliance obligations for an SSDE; and (iv) penalties for non-compliance of obligations by an SSDE. As the first stage is to identify CDSs, the CDCL recommended that certain digital services that are susceptible to market concentration can be pre-identified based on the CCI’s enforcement experience, market studies and emerging global practices.
Such CDSs must be listed as a schedule to the DCB and be updated regularly by the government. Accordingly, based on the CCI’s enforcement experience, nine digital services (including online search engines, operating systems, video sharing platform services
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