MeitY May Advise MCA To Exclude Ex-Ante Provision From Digital Competition Bill For Now

The Ministry of Electronics and Information Technology (MeitY) may likely ask the Ministry of Corporate Affairs (MCA) to exclude the ex-ante provision from the proposed draft of the Digital Competition Bill (DCB) for now.

As per an ET report,  the IT ministry’s suggestion to exclude the ex-ante framework will be a part of its overall feedback to the MCA on the draft DCB.

Additionally, the IT ministry may propose conducting further extensive consultations with the industry, startups, and other stakeholders on various aspects of the bill before finalising the draft.

“There has been a near-unanimous view across the board that the ex-ante provision needs to be re-looked at. This is perhaps not the right time for such a provision,” a senior government official told ET.

An ex-ante provision in a regulation or a law allows the government to take preventive action based on anticipated outcomes, while an ex-post framework involves legal action after an event has occurred.

Currently, the CCI operates on an ex-post framework, intervening after receiving complaints about unfair market practices. The proposed draft DCB suggests granting the competition regulator preemptive powers in addition to its existing ex-post powers.

Last month, the IT ministry convened meetings with various stakeholders to discuss aspects of the draft DCB. Representatives from the MCA and the Competition Commission of India also participated in these consultations. 

In their feedback to the ministry, several startups, industry groups and representatives from big tech companies had told the IT ministry provisions like ex-ante measures and the definitions and limitations proposed for systemically significant digital enterprises (SSDE) could potentially harm Indian companies, particularly startups.

As per the draft Bill, large digital platforms will be designated as SSDEs if they meet certain financial and user base criteria. Some of the thresholds include a turnover of not less than INR 4,000 Cr in India in the preceding three financial years or a gross merchandise value (GMV) of not less than INR 16,000 Cr in the country. 

In December 2022, a parliamentary panel recommended implementing ex-ante regulation for digital markets in India. Subsequently, in February 2023, the MCA established the Committee on Digital Competition Law, charging it with drafting the Digital Competition Bill.