India Mulls New Digital Competition Law To Regulate Big Tech: Report

The government is considering the introduction of a distinct digital competition law to regulate big technology firms.

The Ministry of Corporate Affairs is reportedly contemplating a new legislation rather than modifying the recently amended Competition Act.

Due to the intricate nature of the issue and the varying perspectives of stakeholders, the process of introducing a bill of this nature would be time-consuming, according to a source quoted by The Economic Times.

"It will be a new law, so it will take some time," said one of the people aware of the matter, reports ET.

The government reportedly doesn't intend to hastily introduce a digital competition law merely for the sake of it. Instead, it plans to develop such a law after thorough discussions and deliberations, according to the person.

The person also pointed out that the idea of a law to regulate major digital entities has been a topic of discussion in countries such as the UK and the US for some time now.

The committee led by corporate affairs secretary Manoj Govil, which was established to examine the need for any ex-ante regulatory mechanism for digital markets through a separate law and to study international best practices, among others, is reportedly on track to finish the preliminary draft of its report within this month.

The committee has wrapped up its consultations with stakeholders, which includes local startups as well as major international corporations like Apple, Amazon, Google, Meta, and Twitter.

There have been reports that large multinational tech companies have expressed their disagreement with the concept of ex-ante regulations in India.

The findings of the report are expected to serve as the basis of the government's next course of action.

The existing Competition Act has already been revised earlier this year to address modern issues and manage fair trade concerns across various sectors, according to another person quoted in the report.

"So, there is no need to amend the existing Act again," he said. "The new law is expected to complement the existing Competition Act."

The anticipated new law is expected to complement the existing Competition Act, the person added.

Previously, ET had reported that the government panel is likely to endorse ex-ante regulations and suggest guidelines for systemically important digital intermediaries (SIDI). However, the new framework will not include smaller digital companies.

The panel is expected to establish the definition of SIDI, based on a range of factors such as business nature, turnover, and user base, both local and global.

The report from the panel will incorporate suggestions from stakeholders, the findings of the parliamentary panel on finance's report from December 2022, along with its own inputs.

The need for a distinct digital competition legislation was put forth by the parliamentary committee, led by Jayant Sinha, the previous minister of state for finance.

Prominent tech companies such as Google, Apple, and Facebook are currently under investigation by the competition regulator for potential violations of fair trade regulations.