A 16-member inter-ministerial Committee on Digital Competition Law, set up by the Ministry of Corporate Affairs in February, is likely to get another extension to submit its report.

The panel, which was initially given three months to submit its findings, has already been granted four extensions, with the latest one allowing it to submit its report by August 31.

However, as the deadline approaches, the committee members are still engaged in deliberations on the draft of the proposed digital competition law and the Panel is now likely to submit its final report next month.

This development comes even as a parliamentary panel headed by Jayant Sinha, which first mooted the idea of a digital competition law, recently asked the government to urgently apprise it of the findings of the panel on digital competition law.

The committee’s recommendations are eagerly awaited as the digital competition law is expected to have a significant impact on the rapidly evolving digital landscape in the country.

Listen: State of the Economy. Do we need the Digital Competition Act?

The law aims to address issues related to anti-competitive practices, data protection, and fair competition in the digital market, which are crucial for the growth and development of the digital economy.

Ex-anteregulationofdigitalmarkets

The rise of digital platforms has revolutionised the way businesses operate and consumers interact. However, this transformation has also raised several concerns related to anti-competitive practices, data protection, and the dominance of a few major players.

To address these concerns, several jurisdictions have been considering or have already implemented ex-ante regulations, which are proactive regulations that aim to prevent harm before it occurs, rather than merely addressing it after the fact.

Digital Markets Act

The Digital Markets Act (DMA) proposed by the European Union is a recent example of legislation that aims to create fair and contestable digital markets by addressing challenges posed by the dominant position of certain digital platforms, referred to as ‘gatekeepers’.

These gatekeepers have a significant impact on the market, acting as intermediaries for millions of businesses and consumers, and often hold entrenched and durable positions that eliminate competition.

The DMA sets out a list of do’s and don’ts for these gatekeepers, aiming to ensure that they behave in a fair manner and allow for the entry and growth of smaller competitors. For example, the DMA prohibits gatekeepers from treating their own services more favourably than those of their competitors, and mandates data portability and interoperability.

Read more: Big Tech braces for roll-out of EU’s Digital Services Act

The DMA also provides the European Commission the power to conduct market investigations and impose fines or structural remedies if gatekeepers do not comply with the rules.

This approach contrasts with ex-post regulations, which are more reactive and involve taking corrective actions after anti-competitive practices have already occurred. While ex-post regulations are necessary and important, they often involve lengthy legal processes and may not be sufficient to restore competition and rectify the harm caused. Hence, the DMA, as an ex-ante regulation, represents a more proactive approach to regulating digital markets.

Overall, the DMA represents a significant step towards creating a level playing field in the digital market. It aims to ensure that gatekeepers do not abuse their dominant position, while fostering innovation and protecting the interests of consumers and businesses alike .

While it is too early to assess its impact, the DMA serves as an important model for other jurisdictions considering similar ex-ante regulations for digital markets.

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