• Recently, Ministry of Corporate Affairs (MCA) released the draft Digital Competition Bill.


  • The bill proposes an ‘ex-ante’ approach to regulate Big Tech and large Indian tech firms.
  • The “Systemically significant digital enterprises” are defined as firms with domestic revenue of over ₹4,000 crore or global revenue of over $30 billion, and with over 10 million end-users or 10,000 business users in India.
  • Also nine ‘core’ services have been identified, including search engines, social networks, browsers and e-commerce aggregators.
  • The bill prohibits bundling of services,restricting third-party apps or data cross-sharing, self-preferencing among other mandates.


  • The main aim of the proposed legislation is to tackle Big Tech firms anti-competitive practices.
  • The bill aims to regulate bigger companies based on their turnover, gross merchandise value, global market capitalisation, number of users and other factors.
  • The bill comes at a time when Big Tech firms and Indian companies have often locked horns over various issues.
  • This draft bill is a part of the report that Committee on Digital Competition Law (CDCL) submitted to the Ministry of Corporate Affairs.


  • There is a need for a new law as the existing Competition Act, 2002 could not “imagine the current scale of digitalization.”
  • Thus when Big Tech firms will be regulated under the bill’s ambit, large India-based startups too will have to comply.
  • According to Legal experts, “Big Tech will struggle to function with restrictions in cross-sharing of data, as well as unbundling of services”. As currently popular tech platforms work as ecosystems of services. Thus, mandating unbundling with penalties may dilute user- experiences of most apps that right now work seamlessly.


  • As the provision of the bill, unbundling services by a tech firm may lead to users having to grant permission for every single feature.
  • As per various experts, proposal could lead to regulatory confusion in terms of how such services are defined.
  • The non-compliance penalties are as high as 10% of a firm’s global revenue, while incorrect submission penalties are up to 1% of a company’s global revenue.
  • The bill has also raised questions among legal and policy experts on whether the regulations are workable.
  • As the most of digital services come from firms with successful tech products, so multiple apps fall under one tech umbrella and the draft bill forbids this.
  • Global investors can feel that such a law could go against the ability of firms to innovate.
  • Lawyers too believe that such a bill may push India towards a consumption economy and not an innovation-first one.
  • This provision on cloud providers may also limit startups access to global tech.
  • The experts also argued that ex-ante regulation for big techs, especially for e-commerce sector may be untimely and excessive and may lead to over-regulation.


  • As this draft bill competition is largely inspired from the European Union’s Digital Markets Act (DMA), but further consultations with stakeholders will lead to India- specific proposals that would relax certain restrictions.
  • As India is also seeking global investments in order to present itself as an innovation ecosystem, thus the writers of the draft should believe that India needs more flexible regulations.

The post DIGITAL COMPETITION BILL appeared first on Vajirao IAS.


Source link

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *