In a significant move to regulate anti-competitive practices by major technology companies, a government-appointed inter-ministerial panel is in the final stages of preparing a draft digital competition law. Sources familiar with the matter have revealed that the high-powered panel, led by the Secretary of the Ministry of Corporate Affairs, is set to give final touches to the draft during its 10th meeting on June 1.
Once the draft is finalized, it will be recommended to the Ministry of Corporate Affairs for careful consideration. Following stakeholder consultations, the proposed law could be tabled in the winter session of Parliament later this year.
The parliamentary committee on finance had previously suggested the enactment of a distinct ex-ante law, modeled after the European Union, to address the anti-competitive practices of major tech firms. Acting upon these recommendations, the central government established a 16-member panel on February 6, 2023, to examine the necessity of a separate competition law for digital markets.
Sources indicate that the committee is deliberating on the criteria to identify “gatekeepers” within digital markets. This term encompasses large tech companies operating in sectors such as e-commerce, food delivery platforms, cab aggregators, and search engines, capable of distorting market competition. The committee is likely to propose a criterion based on active user count and global turnover to identify these gatekeepers.
The committee is also expected to recommend ten obligations that the identified gatekeepers must adhere to. These obligations encompass aspects such as platform interoperability, anti-steering measures, data portability, and responsible data usage.
Speaking on the matter, an anonymous source stated, “The committee firmly believes that big tech companies should not exploit the data they collect to eliminate competition or hinder new entrants.”
In the event that a major tech company fails to fulfill its obligations under the digital competition law, the committee is contemplating imposing penalties amounting to 10% of the company’s global turnover.
Experts assert that the implementation of a digital competition law could have far-reaching implications for major tech players operating within India’s digital markets. Among the objectives under consideration by the committee is to foster a level playing field for Indian startups and promote their growth.
As the panel finalizes the draft digital competition law, anticipation builds for its potential impact on the regulatory landscape and the future of competition in the digital sphere.
