Digital Competition Law To Take A Back Seat Amid Ongoing Trade Talks With US

The introduction of the Digital Competition Bill is likely to be delayed amid India’s ongoing negotiations with the US for a bilateral trade deal.  

Citing sources, CNBC TV18 reported that the bill is unlikely to be tabled in the near term as the Centre is focussing on finalising the trade deal with the US.

The bill has been opposed by the US government officials and industry bodies. The US-India Business Council, which counts tech giants Google, Amazon, Apple, and Meta among its members, rallied against the bill last year, saying it is “much further in scope” than the EU’s law.

The Digital Competition Bill aims to regulate large digital platforms by addressing the anti-competitive practices in the online realm. It draws inspiration from the EU framework. The corporate affairs ministry invited public comments on the draft bill in March last year.

Along with the draft bill, the committee on digital competition law (CDCL) also submitted a report to the corporate affairs ministry (MCA) calling for the creation of a new Digital Competition Act to enable the Competition Commission of India (CCI) to “selectively” regulate large digital entities on an ex-ante basis.

The draft bill proposes to regulate major entities based on their turnover, gross merchandise value, global market capitalisation, user numbers, and other factors.

The draft bill has also divided the Indian startup ecosystem. While 40 startups, including Matrimony.com, Innov8, Magicbricks, Hoichoi, among others, supported the bill, the Internet and Mobile Association of India (IAMAI) said that it could dry up investments for tech startups.

Meanwhile, the parliamentary standing committee on finance is expected to discuss the evolving role of the CCI in the economy, especially in the digital landscape, on Monday (April 28). News agency PTI reported that competition issues, including those related to quick commerce, are likely to be taken up during the discussions.

Big Tech Companies Under The Lens 

With rising digitisation in the country, big tech giants like Flipkart, Amazon, Google, among others, have been facing allegations of resorting to anti-competitive practices. Many of these companies have also come under the scanner of the country’s antitrust regulator.

Google recently settled its smart TV antitrust case with the CCI by paying INR 20.24 Cr. In 2022, the CCI levied penalties totalling INR 2,274.2 Cr on Google in two different cases for abuse of dominant position in the Android market and anti-competitive Play Store policies. The company is fighting the cases in various courts.

Ecommerce giants Flipkart and Walmart are also being probed by the fair trade regulator. In September last year, it was reported that the CCI found them in violation of laws by giving preference to select sellers on their platforms. 

Among other big names, Apple has come under the CCI’s radar for its App Store policy. The regulator also slapped a fine of INR 213.14 Cr on Meta for abusing its dominant position.