Indian Law to Check Anticompetitive Practices for Digital Economy Giants Proposed
An experts’ committee appointed by the corporate affairs ministry in India is set to recommend a new legislation to regulate anticompetitive practices of digital economy giants such as Amazon, Google, and Facebook. The committee’s report, which includes a draft bill, will be submitted to the ministry, and public feedback will be sought before it is presented to Parliament after the national elections.
However, the bill is not expected to be tabled before the elections due to the limited time available for discussion and the focus on issues of wider public interest during the budget session. Some experts are skeptical about the need for a new law, pointing out that the Competition Act has recently been amended to address such concerns effectively.
Amol Kulkarni, the director of research at CUTS International, a non-profit organization working on public interest issues, suggests having more discussions with stakeholders to find solutions such as industry standards or a code of conduct to address dominance and anticompetitive behavior in digital markets. He also emphasizes the importance of enhancing the technical and manpower capacity of India’s fair-play watchdog, the Competition Commission of India (CCI), to effectively deal with emerging challenges.
Neelambera Sandeepan, a partner at law firm Lakshmikumaran & Sridharan, suggests that India’s own ex-ante (forward-looking) law should be tailored to the maturity level of the digital market in the country. She warns against disincentivizing innovation through overregulation and highlights the need for a specialized regulation that complements the existing powers of the CCI.
The ministry of corporate affairs and the CCI were contacted for comments but did not respond.
In December 2022, the parliamentary standing committee on finance proposed an ex-ante regulatory framework for systemically important digital economy firms. The committee suggested that these firms, identified as digital market gatekeepers, should comply with certain rules and file annual compliance reports. For example, e-commerce platforms should refrain from favoring their own private labels over third-party brands and bundling different goods and services together.
In addition to the proposed law on anticompetitive practices, the ministry has been working on amendments to the Bankruptcy Code and the Companies Act, which may also be presented to Parliament after the national elections.
An experts’ committee in India is proposing a new law to regulate the practices of digital economy giants like Amazon, Google, and Facebook. The committee, set up by the corporate affairs ministry, will submit a report recommending a new legislation and draft bill. The proposed law aims to ensure fair behavior by search engines, marketplaces, and social media platforms. Public feedback will be sought before the bill is presented to Parliament after the national elections. Some experts question the need for a new law, suggesting that existing competition regulations could be sufficient. The Competition Commission of India’s digital markets unit may need to enhance its technical capacity to deal with emerging challenges. The new law is expected to have similarities with the European Union’s Digital Markets Act. However, caution is advised to prevent overregulation that could stifle innovation.
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