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Govt calls key meeting on draft digital competition law

New Delhi, June 11, 2024 

Thursday meet to consider concerns of Big Tech

A big move is afoot on the EU-style digital competition law under consideration, posing a challenge to tech firms by laying out strict compliance obligations that can impact their business model. The Ministry of Electronics and Information Technology (MeitY) has scheduled a crucial meeting with industry associations on Thursday to discuss the draft Digital Competition Bill (DCB).

DCB has proposed this ex-ante law for digital markets to regulate enterprises that have a significant presence in India. India’s digital economy is expected to touch the $1 trillion mark by 2027-28, according to government estimates.

The MeitY Secretary will chair the meeting on Thursday. It will cover the industry stakeholders’ representations, which have raised “serious concerns” about the proposed DCB’s impact on data and digital markets, according to official sources.

Indications are that the meeting will be attended by representatives of industry associations such as IAMAI and NASSCOM, as well as chambers of commerce, including FICCI and ASSOCHAM.

Separately, on June 18, there is expected to be another meeting with industry representatives, sources said. Big tech representatives have been invited to attend both meetings, sources said.

The Corporate Affairs Ministry (MCA), which was the nodal ministry driving the deliberations and had set up a 16-member Committee on Digital Competition Law (CDCL), had set May 15 as the last date for stakeholders to submit comments on the DCB and CDCL reports.

This MeitY Secretary-chaired meeting assumes importance as Big Tech are understood to have expressed their serious concerns over DCB.

Already, a US lobby group representing tech giants such as Google, Amazon, and Apple has urged India to reconsider its proposed EU-like ex-ante approach focused on digital competition law.

The US-India Business Council (USIBC), part of the U.S. Chamber of Commerce, had reportedly written a letter to MCA expressing concerns over the proposed Digital Competition Bill.

Thursday’s meeting has been scheduled by the government to ensure that the proposed legislation is balanced and considers the interests of all parties involved, sources said.

Top officials of the MCA and Competition Commission of India (CCI) and senior officials from MeitY are likely to attend the meeting, they added.

Besides the EU, which has enacted the Digital Markets Act with an ex-ante approach to regulating large digital players, the UK too has recently enacted ex-ante regulations.

What is DCB?
The DCB, modelled after the EU’s Digital Markets Act 2022, aims to impose obligations on big digital firms with a global turnover exceeding $30 billion and at least 10 million local users.

The proposed law seeks to prevent large digital companies from exploiting non-public user data and favouring their services over competitors. Additionally, it aims to remove restrictions on downloading third-party apps.

The ex-ante obligations under DCB are proposed to be applicable only to Systematically Significant Digital Enterprises (SSDE) (comparable to ‘gatekeepers’ under the EU DMA) in respect of pre-defined Core Digital Services (CDS) offered by these SSDEs in India.

The key obligations proposed under the proposed ex-ante framework include “fair and transparent dealings,” anti-steering, tying and bundling, self-preferencing, restrictions on third-party applications, and data usage.

Dinoo Muthappa, a competition law expert, said, “Countries like the UK have recently enacted ex-ante regulations to govern the conduct of large players in some digital markets. India is likely to follow suit with the Digital Competition Bill 2024. The nuts and bolts of how the law will play out will be further refined in secondary legislation to be issued by the Competition Commission of India.”

Industry Concerns
Industry associations have voiced apprehensions regarding several aspects of the proposed Bill. Key concerns include the implications for data privacy, the competitive landscape of digital markets, and the compliance burdens it may place on companies. Stakeholders fear that stringent regulations could stifle innovation, hamper business operations, and ultimately affect consumer choice and market dynamics.

“We recognise the importance of fostering a competitive and innovative digital economy. This meeting is an opportunity for us to listen to the industry’s perspectives and collaborate on creating a regulatory framework that supports growth while protecting consumer interests and data integrity,” the official source said.

Industry leaders are expected to present detailed feedback and suggestions during the meeting. Many are advocating for a balanced approach that protects consumer data without imposing overly restrictive measures on businesses.

[The Hindu Business Line]

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