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16-member panel set up to draft Digital Competition Act within 3 months

New Delhi, February 7, 2023 

Panel comprising civil servants, experts will study if Competition Act, 2002 enough to deal with new digital economy

The government has appointed a 16-member committee of union secretaries, law experts, and industry stakeholders to draft within three months the Digital Competition Act after studying anticompetitive practices.

The panel will be headed by Manoj Govil, secretary in the Ministry of Corporate Affairs (MCA) and it will study if existing provisions in Competition Act, 2002 and related regulations were sufficient to deal with the challenges in the digital economy. The Competition Commission of India (CCI) will provide secretarial and research assistance and logistic support to the panel.

The move comes days after the Parliamentary Standing Committee on Finance presented recommendations on the subject. The parliamentary committee’s report underlined the need for ex-ante regulations—they are cautionary and based on anticipated changes or activity—and said the government must frame a definition for Systemically Important Digital Intermediaries (SIDIs) that need tighter regulations. The classification could be based on revenues, market capitalisation, and the number of active users.

The committee will include the chairperson of the CCI, joint secretary (Competition) of the MCA, Dr Saurabh Srivastava; the cofounder of industry body NASSCOM, and experts from leading law firms. Joint secretary-level officers invited by the Niti Aayog, Department of Commerce, Economic Affairs, Consumer Affairs, Ministry of Electronics and Information Technology, and Department of Promotion of Industry and Internal Trade will also be a part of the new committee.

It will study best international practices on regulation in digital markets, other regulatory regimes, institutional mechanisms or government policies regarding competition in digital markets.

Technology giants like Google, Apple, Facebook and Amazon face growing global scrutiny for allegedly abusing their market position using chunks of user data. CCI, in two separate cases last year, asked Google to pay penalties of Rs 936.44 crore and Rs 1,337.76 crore along with mandatory changes in its business model.

The parliamentary committee had suggested a specialized digital markets unit within the CCI, with “skilled experts,” academics, and attorneys, enabling the commission to closely monitor the SIDIs as well as emerging SIDIs. It had also recommended that the SIDIs must submit a report to the CCI every year describing the measures implemented to fulfil their obligations and also publish a summary of this report on their websites.

Anti-steering provisions, self-preferencing, bundling or tying of services, deep discounting, and search or ranking preferencing were some of the anti-competitive practices recognised by the parliamentary panel. It also said the SIDIs should be stopped from processing users’ data by using the services of third parties that make use of their core services.

[The Business Standard]

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