The Draft Digital Competition Bill, 2024 (“Bill”), has been released recently by the Central Government, for public consultations initiated by the Ministry of Corporate Affairs. The Bill comes against the backdrop of a long debate on the pros and cons of having an ex-ante regulation for big tech and its effect on competition and innovation. In leading the discussion on Competition in the digital markets, the Law and Technology Society organized a panel discussion to address the report and the Bill’s shortcomings and suggest a way forward. The panel comprised the finest minds in the competition and technology law sector, having the following members:

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1. Ms. Deeksha Manchanda, Partner at Chandhiok & Mahajan

2. Dr. Tilottama Raychaudhuri, Associate Professor, NUJS Kolkata

3. Mr. Kashish Makkar

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Mr. Kazim Rizvi, Founding Director, The Dialogue, moderated the panel and discussed broad themes including the designation of Core Digital Services, obligations of Systemically Significant Digital Enterprises, powers of Central Government and nature of ex-ante regulation.

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Click here to read the Full Report.

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EXECUTIVE SUMMARY:

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The panel discussion centred on the Report by the Committee on Digital Competition Law and the Draft Digital Competition Bill, exploring four key themes: Core Digital Services, obligations of Systemically Significant Digital Enterprises, powers of the Central Government, and the nature of ex-ante regulations.

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Firstly, discussing about the Core Digital Services, the panellists expressed concerns about the lack of empirical evidence supporting the selection of nine CDS, noting heavy influence from European legislation. They highlighted the need for a theoretical framework for designating CDS which take into account the criticality of infrastructure and the harm caused by anti-competitive conduct and remedial measures, etc. The discussion also touched upon the exclusion of merger controls, with panellists suggesting that the Committee on Digital Competition Law should have taken a more holistic approach and included it.

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Secondly, on the topic of ‘Obligations of Systemically Significant Digital Enterprises’, the panel discussed the six principal-based obligations for SSDEs. They cautioned against creating broad presumptions of anti-competitive practices at this stage. They also questioned the necessity of introducing the new law when it’s the framework mirrors the current Competition Act. They also highlighted the challenge of defining and enforcing obligations in the digital space and expressed concerns regarding CCI’s capacity to handle additional responsibilities under the new framework.

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Thirdly, moving towards ‘the powers of the Central Government’, the panelists generally viewed the provisions granting powers to the Central Government as standard and present in many other laws. They noted that these powers have been exercised sparingly in the past. However, they expressed concerns about the less-defined nature of the power of exemption.

 

Fourthly, delving into ‘Nature of Ex-Ante Regulations’, the panel questioned whether the bill genuinely provides for an ex-ante approach. It was suggested that the Draft Bill primarily eliminates the need to define relevant markets and inverts the burden of proof. The discussion revealed scepticism about whether the proposed framework truly constitutes ex-ante regulation which in practice seems ex-post only.

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Panellists emphasized the importance of tailoring the approach to India's unique market conditions and suggested that some objectives could potentially be achieved by amending the existing Competition Act. They also stressed the need for a longer, more comprehensive consultation process to ensure all stakeholders' perspectives are considered.

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In conclusion, while acknowledging the bill as a starting point, the panel highlighted several areas requiring further refinement and consideration to create an effective and balanced digital competition framework for India. The discussion underscored the complexity of regulating the digital market and the need for a more critical and nuanced approach that encourages innovation while ensuring fair competition.

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