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Source: The post Digital Competition Bill in India has been created, based on the article “Digital regulation: Proposed competition law should not stifle innovation” published in “Business standard” on 18th March 2024.
UPSC Syllabus Topic: GS Paper 2- governance-Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
News: The article discusses a new Digital Competition Bill in India. This Bill aims to regulate the digital sector and prevent anti-competitive practices. Digital Competition Bill in India
What is the Digital Competition Bill?
Drafting Process: The Bill was drafted by a 16-member committee on digital competition law after a year of deliberation.
Target Group: It focuses on regulating “systemically significant digital enterprises” (SSDEs), which are large tech firms with major revenue and user base in India. SSDEs are identified by having at least ₹4,000 crore in Indian revenue and $30 billion globally.
Bill’s Aims: Designed to prevent anti-competitive practices, ensure transparency, and curb unfair favoritism in the digital sector.
Current Status: The Bill is open for public comment and may require further adjustments before being finalized.
What are the benefits of the Digital Competition Bill?
Increases Transparency: Requires tech companies to be more transparent in their operations and dealings.
Protects Innovators and Startups: Exempts smaller companies and startups from stringent rules, encouraging innovation.
Aligns with Global Standards: Follows a similar approach to the EU’s Digital Markets Act, showing an effort to align with international regulatory frameworks.
Boosts Digital Economy: By regulating effectively, it supports the growth of India’s digital market, expected to reach $800 billion by 2030.
How is the bill intended to regulate big tech companies?
1.The Digital Competition Bill intends to regulate big tech companies by requiring them to operate in a fair, transparent manner, and establish clear complaint-handling mechanisms.
2.It specifically prohibits these companies from unfairly favoring their own products or those of related parties.
3.Additionally, the Bill restricts the misuse of non-public data of business users and prevents the restriction of third-party apps.
4.It also bans practices like “steering” or “self-referencing” and predatory pricing.
- These regulations apply alongside compliance with the existing Competition Act and the Digital Personal Data Protection Act.
What are the concerns with the bill?
Stifling Innovation: There’s worry that strict regulations could limit creativity and growth in the tech sector.
Too Much Power to Regulators: The Bill’s ex-ante approach may give regulators excessive discretionary power, raising concerns about potential misuse.
Duplication with Existing Laws: It might overlap with provisions in the current Competition Act, leading to regulatory complexity and potential confusion.
Potential for Conflicting Decisions: This overlap could result in parallel inquiries and divergent rulings for the same issue under different laws.
Question for practice:
Evaluate the potential impact of the Digital Competition Bill in India on the regulation of big tech companies, considering its aims, provisions, benefits, and concerns.
