Source-This post on New digital competition law proposed to regulate Big Tech is based on the article “Panel recommends law to regulate Big Tech firms” published in “The Hindu” on 13th March 2024.
Why in the News?
The Committee on Digital Competition Law, in its report, has recommended legislation to regulate the market power of Big Tech firms such as Google and Meta.
What does the report state?
1. Competition Act outdated in digital age– The committee says the Competition Act of 2002 deals with anti-competitive behavior after it occurs, without considering today’s digitalization pace. If adopted, the suggestions would improve the Competition Commission of India’s ability to address competition issues in the tech sector.
2. Market dominance of Big Tech– The report expresses concern about the market dominance of these Big Tech companies. It cites their “network effects,” which enable rapid growth of their user base and establish a market position that is challenging for new competitors to overcome.
3. New Digital law proposed– The recommendation suggests forming a new law, the Digital Competition Act, to introduce proactive legislation aimed specifically at large digital companies, to complement the Competition Act.
4. SSDEs identification:
a. A draft proposed by the panel identifies companies with a “significant presence” in the market for a “Core Digital Service” as “Systemically Significant Digital Enterprises (SSDEs).
b. According to the draft, companies would be required to assess if they fall into this category.
c. Failure to self-designate could result in penalties based on the entire global turnover of the corporate group, rather than just domestic revenues. Specific rules for SSDEs would be determined after public consultations.
About the Committee on Digital Competition Law
Constituted by– Ministry of Corporate Affairs
Committee Members: It consists of 16 members, including government officials, legal experts, and industry representatives.
Functions of the Panel:
a. Examine if the Competition Act of 2002 and the rules framed under it are equipped to address the challenges presented by the digital economy.
b. It also study the requirement of the digital competition law and give suggestions regarding competition norms.
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