Govt panel to weigh need for separate competition law in digital markets

The Centre on February 6 constituted a 16-member committee chaired by Ministry of Corporate Affairs (MCA) Secretary Manoj Govil, to examine the “need for a separate law on competition in digital markets." This comes after a report by the Parliamentary Standing Committee on Finance on the anti-competitive practices of Big Tech companies’ had suggested that the government consider and introduce such a law.

The order by the MCA states that the committee is to review the existing provisions of the Competition Act, and if the rules under it are sufficient to “deal with the challenges that have emerged from the digital economy”.

The Standing Committee report is focused on issues such as deep discounting and pricing, platform neutrality, search and ranking preferencing, advertising policies and more. The report recommended defining Big Tech companies as Systemically Important Digital Intermediaries (SIDIs) on the basis of their revenues, market capitalisation and end users.

The report was met with resistance. The Asia Internet Coalition, an industry body representing companies such as Google, Twitter, and Meta termed the report as 'absolutist' and 'regressive', and said it was concerned that this may dampen digital innovation in India.

The committee constituted by the MCA has been directed to examine the need for an ‘ex-ante regulatory mechanism’ — or regulation before the occurrence of an event. Ex post regulations, or regulations after an event has taken place, is essentially what the CCI does. It was among the Parliamentary Committee report’s recommendations that the committee recommend that “competitive behaviour needs to be evaluated ex ante before markets end up monopolized instead of the ex post evaluation being carried out at present.”

The committee must also study the best international best practices on regulation in the field of digital markets, as well as other regulatory regimes, institutional mechanisms and govemment policies regarding competition in digital markets. They must also study the practices of Systemically Important Digital Intermediaries (SIDIS) “which limit or have the potential to cause harm in digital markets,” it said.

It also extended the purview of the committee to any other matters related to competition in digital markets that the committee may consider relevant.

The committee must submit its report as well as a draft Digital Competition Act within three months.

Who’s on the committee?

Apart from Manoj Govil, the panel comprises of Competition Commission of India (CCI) Chairperson and asks for nominees not below the rank of a joint secretary from the NITI Aayog, Department of Commerce, Department of Economic Affairs, Department of Consumer Affairs, Department for Promotion of Industry and Internal Trade (DPIIT), and the Ministry of Electronics and Information Technology (Meity).

Additionally, members of the committee include NASSCOM co-founder and Indian Angel Network Chairman Saurabh Srivastava; Retd Delhi School of Economics Professor Aditya Bhattacharya; IKDHVAJ Advisers LLP's Harsha Vardhana Singh and four lawyers — Pallavi Shardul Shroff from Shardul Amarchand Mangaldas, Haigreeve Khaitan from Khaitan & Co, Anand S Pathak from P&A Law Offices, and Rahul Rai from Axiom5 Law Chamber.