IT Ministry reviews Digital Competition Bill inputs amid business rule allocation deliberations

The digital competition bill was introduced by the Ministry of Corporate Affairs in February 2024 to address anti-competitive practices by Big Tech firms.

The Ministry of Electronics and Information Technology is currently reviewing the inputs it has received from industry players on the Digital Competition Bill before it decides its stance on digital competition, while considering the allocation of business rules and its likely impact on digital economy.

The IT Ministry has been holding consultations with industry associations regarding the draft bill, which was floated for public consultation by the Ministry of Corporate Affairs in February.

The allocation of business rules refers to the rules that define which government ministries or departments are responsible for different areas of policy and administration.

In the context of the Digital Competition Bill, the allocation of business rules would determine whether the Ministry of Electronics and IT or the Ministry of Corporate Affairs will legislate on this.

"Our concern is a bit different because there's allocation of rules of business. So, all of those issues have to reviewed and we must figure out what its likely impact will be on the ecosystem. We will have to balance various interests. Competition is clearly in the purview of MCA, but digital economy so far has been with the IT Ministry, and hence is a stakeholder ministry," an official in know of the matter said.

According to sources, the Bill is currently undergoing inter-ministerial consultations and is being reviewed by the IT Ministry at present. The ministry convened these consultations with industry and civil society to better understand the issue at hand before giving its opinion to the MCA.

"Many of the industry representatives in the digital economy have been representing to us about what they feel about the Bills. So now, the Bill has come to the ministry, with a request for comments. Before we submit our opinion to the MCA, we must understand how our stakeholders feel," said an official.

On June 18, the MeitY met with met with industry bodies representing Big Tech, homegrown companies and Indian startups, and on June 19, it met with  think tanks to deliberate on the potential impact the regulation may have on the industry

The Digital Competition Bill brings in additional obligations for companies if they meet certain specific thresholds such as global turnover, number of business users and so on. Although aimed at curbing anti-competitive practices of Big Tech, the industry has argued that the Bill may severely impact smaller companies and startups.

In the first meeting, industry bodies such as IAMAI raised the issue of how the Bill may have far-reaching effects on sectors such as investments. The ADIF, in contrast, advocated for the Bill.

In the second meeting with think tanks and civil society groups, there was a consensus around the opinion that ex-ante regulation like Digital competition Bill will severely impact startups and innovation.