India Inc raises concerns over draft Digital Competition Bill

India Inc on Tuesday raised its concerns over the draft Digital Competition Bill 2024 in a meeting chaired by MeitY (Ministry of Electronics and Information Technology) Secretary S Krishnan.

The meeting, which was earlier scheduled for June 13 but postponed at the last moment, also saw participation from representatives of the Competition Commission of India and the Ministry of Corporate Affairs.

Internet and Mobile Association of India (IAMAI) proposed recommendations for the Dual Legislation, saying the current Competition Act and the new bill for digital markets are unfair and untenable.

It said the definition of significant digital players virtually includes all digital firms, large and small, making the scope of the draft poor.

The Digital Competition Bill has driven its inspiration from the European Union's Digital Market Act (DMA) 2022.

IAMAI said the EU's DMA has not been able to solve the revenue share issue, but whatever it solved so far has already been resolved by the current Competition Act.

The unresolved issues may be taken care of by making amendments to the IT Act and Competition Act, it added.

The proposed Digital Competition Bill, which seeks to impose obligations on big tech firms with a global turnover exceeding $30 billion, was introduced in February this year by the Ministry of Corporate Affairs. It seeks to put in place several obligations for large digital enterprises, including news aggregators, in efforts to ensure a level playing field and fair competition in the digital space.

It has ever since received mixed reactions from industry stakeholders, with strong opposition from the big tech firms amid divided startups, but largely advocating the draft and pushing for its enactment.

As many as 21 entities, including CUTS International, Broadband India Forum, Internet Freedom Foundation and The Dialogue, as well as 26 individuals, had written a letter to Corporate Affairs Secretary Manoj Govil in April.

"The bill will impact various sectors and domains of the digital economy, including user experience, data protection and security, supply chains, investments, business costs for MSMEs and consumer affordability. It is also likely to impact non-digital domains, owing to their inextricable relationship with digital counterparts ...," they had said.

Currently, the Competition Act primarily envisages an ex-post framework of intervention, wherein the CCI intervenes after the occurrence of anti-competitive conduct.

India Cellular & Electronics Association, which was also slated to attend the meeting, was not present, as per sources.

Prateek Jain, Associate Director - Startup and Alliances, Alliance of Digital India Foundation (ADIF), said the proposed Digital Competition Law is a visionary step that will cement India's position as a global leader in the digital economy.

As the premier policy think-tank for digital startups in India, ADIF wholeheartedly welcomes this forward-looking legislation that strikes the right balance between promoting innovation and ensuring fair competition, he said.

This robust framework will empower homegrown innovators, safeguard consumer interests, and foster an environment conducive to sustainable growth, he added.

"The digital revolution must thrive on fair play and equal opportunities for all players. We remain committed partners in this journey, working alongside policymakers to nurture an ecosystem driven by innovation, fair competition and inclusive progress for the benefit of all Indians," Jain noted.

As per sources, MeitY will hold at least two more rounds of consultations before deciding any course of action.