Analysing India's Digital Competition Bill And Its Legal Landscape

• Published date: 04 April 2024
• Law Firm: LexCounsel Law Offices
• Author: Ms Seema Jhingan, Jyoti Vats Mishra and Ayush Rastogi

Analysing India's Digital Competition Bill and its Legal Landscape

The Competition Act, 2002 ("Competition Act") provides a robust legal framework for regulating competition in traditional markets, but there is a notable absence of specific legislation tailored to address the intricacies of competition in digital markets. With the widespread adoption of smartphones, expanding internet connectivity and the government's push towards digitization, digital platforms have witnessed exponential growth across various sectors, leading to new challenges in the digital markets. The concentration of market power in a few dominant players limits competition. Issues such as data privacy, platform dominance of large digital enterprises, quick changes in technology etc. require specialized regulatory interventions to promote competition, innovation, and consumer welfare in the digital economy.

In February 2023, the Committee on Digital Competition Law ("CDCL") was constituted by the Ministry of Corporate Affairs to inter-alia, assess the adequacy of the Competition Act in dealing with the challenges of the digital economy, examine the need for an ex-ante regulatory regime for the digital markets in India and study the international best practices on regulating digital markets. On March 12, 2024, the CDCL published its report ("CDCL Report") which also includes a Draft Digital Competition Bill, 2024 ("Draft Bill") released for public consultation. In this article, we discuss and summarise the key provisions of the Draft Bill along with key recommendations of CDCL Report.

Key Aspects under Draft Bill and CDCL Report:

1. Introduction of a Digital Competition Act with ex-ante measures: CDCL recommends introducing a de novo Digital Competition Act ("Act") specifically covering large digital enterprises and allowing the Competition Commission of India ("CCI") to monitor and regulate the behaviour of such enterprises in an ex-ante manner i.e., before instances of anti-competitive behaviour occur. The CDCL Report suggests enacting the proposed digital competition law to supplement the existing Competition Act which relies on an ex-post model to regulate anti-competitive behaviour after its occurrence. CDCL considered various anti-competitive practices undertaken by large digital enterprises to abuse and consolidate their position in the digital markets including exclusionary behaviour which prevents business users from moving out of the platform; a platform according favourable treatment to its in-house products; bundling essential services with complementary offerings i.e., forcing consumers to buy related services; using personal data for tracking...