Key provisions of India’s Digital Competition Bill, 2024

Source: The post key provisions of India’s Digital Competition Bill, 2024 has been created, based on the article “What the draft Digital Competition Bill proposes, why Big Tech opposes it” published in “Indian express” on 17th May 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.

Context: The article discusses India’s proposed Digital Competition Bill, 2024. The bill aims to prevent big tech companies like Google, Facebook, and Amazon from engaging in anti-competitive practices, similar to the EU’s Digital Markets Act.

For detailed information on Digital Competition Bill in India read Article 1, Article 2

What are the key provisions of India’s Digital Competition Bill, 2024?

Predictive Regulation:

Proposes a preventive (ex ante) approach instead of the current post-incident (ex post) regulation.

Aims to foresee and prevent potential anti-competitive practices before they occur.

Significant Entities:

The Bill proposes that for certain “core digital services” like search engines, and social media sites will be automatically designated as Systematically Significant Digital Enterprises (SSDE) tag.

The Competition Commission of India (CCI) will designate “Systematically Significant Digital Enterprises” (SSDE), on various quantitative and qualitative parameters, like

• Criteria include, in last 3 financial year, turnover over Rs 4,000 crore in India, global turnover over $30 billion, gross merchandise value in India over Rs 16,000 crore, or global market capitalization over $75 billion.
• SSDEs must have at least 1 crore end users or 10,000 business users.

Prohibited Practices:

SSDEs cannot engage in self-preferencing, anti-steering, or restricting third-party applications.

Violations can result in fines up to 10% of global turnover.

Associate Digital Enterprises (ADEs):

Entities benefiting from data shared by a major tech group will be designated as ADEs.

ADEs will have the same obligations as SSDEs.

What criticisms have been raised against the draft Bill?

Compliance Burden: Big tech companies argue that the strict regulations could shift focus from innovation to compliance. For example, the EU’s Digital Markets Act (DMA) has increased the time to find things via Google search by 4,000%.

Broad Definitions: Companies are concerned about the broad criteria for designating significant platforms. Unlike the EU’s DMA, India’s draft law leaves the decision to the discretion of the Competition Commission of India (CCI).

Impact on Smaller Businesses: Tech giants claim changes to their platforms and reduced data sharing could negatively affect smaller businesses relying on their services to reach large audiences.

Potential Arbitrary Decisions: The discretion given to the CCI could lead to arbitrary decision-making, impacting start-ups and smaller businesses.

Why is there a need for the Digital Competition Bill?

1. Big tech companies have a history of anti-competitive behavior. For instance, Google was fined Rs 1.337 crore for its conduct in the Android ecosystem.
2. The dominance of a few companies creates high barriers for new entrants. This limits innovation to within big tech firms.
3. The bill aims to lower these barriers and foster competition. This can lead to more innovation outside the big tech companies.
4. Smaller businesses struggle to compete with the market dominance of big tech. The bill aims to create a more level playing field.

Question for practice:

Examine the key provisions and criticisms of India’s Digital Competition Bill, 2024, and its significance in addressing anti-competitive practices in the digital market.