Gear up wisely to clamp down on important digital intermediaries

Source: The post is based on the article “Gear up wisely to clamp down on important digital intermediaries” published in the mint on 27th December 2022. 

Syllabus: GS3- Indian economy 

Relevance: Issue related to fair competition in market.

News: The article explains the Parliamentary Committee report on anti-competitive practices by big tech companies prevalent in digital markets. 

Recently, the Standing Committee on Finance tabled its report on “anti-competitive practices by Big Tech companies”. 

What are the recommendations of the Parliamentary Panel? 

It has recommended the introduction of “Digital Competition Act”. It would ensure a fair and transparent digital ecosystem in India. 

Dedicated “digital market units” should be set up at CCI. It should be staffed with skilled experts to handle issues related to digital markets. 

Any merger or acquisition involving them must be notified to CCI. There is no minimum threshold or local nexus requirement to keep out deals that do not have a substantial impact on competition.  

It has emphasised the need for globally harmonised regulations that govern digital markets. 

A consistent theme of the report is the exceptional growth of the digital economy in India and its bright forecast. 

What is the way forward to ensure fair competition? 

Some level of state intervention may be reasonable to ensure fair competition and the successful coexistence of smaller players. But, a fine balance needs to be struck between the need to regulate and the freedom to innovate. 

India must focus on developing the concept of voluntary and informed concept and make it compatible with the use of Big Data.