A committee established by the Ministry of Corporate Affairs (MCA) is currently working on a draft law addressing digital competition. Simultaneously, the Ministry of Information Technology (IT Ministry), the governing body for the Internet in India, is anticipated to outline general principles for the competition landscape. The MCA is taking the lead in formulating and enforcing specific rules related to the digital sector.
The committee, formed in February, is reportedly contemplating the introduction of “ex ante” competition regulations for the digital space, aligning with a recommendation from a Parliamentary panel. This suggestion, however, has faced opposition from major technology corporations.
Finance Minister Nirmala Sitharaman recently convened a meeting with Rajeev Chandrasekhar, the Minister of State for Electronics and IT, where they discussed various aspects of digital competition laws. According to a tweet from the Finance Ministry, they concurred that a “whole of Government approach” should be adopted in framing relevant provisions.
Chandrasekhar emphasized the need for global standard cyber laws aligned with Prime Minister Narendra Modi’s vision of a $1 trillion vibrant digital and innovation economy. The discussion also involved harmonizing the Ministry of Corporate Affairs’ thoughts on digital competition with the upcoming Digital India Act, which succeeds the IT Act (2000).
The forthcoming Digital India Bill, being finalized by the IT Ministry, is expected to include a chapter, tentatively titled ‘openness,’ addressing competition issues in the digital space. This section will establish comprehensive principles related to the sector, defining concepts such as market power and imbalances.
This initiative arises as India recognizes antitrust measures as crucial for curtailing the dominance of large technology companies, following the European Union’s lead with the Digital Markets Act (DMA) enacted in November. In December 2022, the Standing Committee on Finance proposed ex-ante regulations, identifying systemically important digital intermediaries (SIDIs), and advocating a new digital competition law to combat anti-competitive practices in digital markets.
Unlike India’s current ‘ex-post’ regulatory approach, where action is taken after establishing anti-competitive practices, the proposed ‘ex-ante’ framework will require companies to proactively implement mechanisms preventing abusive practices.
The Internet and Mobile Association of India (IAMAI), representing major companies like Google, Meta, and Microsoft, expressed opposition to ex-ante regulations, arguing that it could discourage companies from scaling beyond a certain limit. This stance faced criticism from prominent startups, characterizing IAMAI’s views as promotional efforts for large technology corporations.
