Govt to ensure law on digital competition doesn’t over-regulate

The idea is to assess whether another layer of legislation would put undue burden on businesses when a host of legislative and regulatory changes are in the works under the Digital India Bill, Digital Personal Data Protection Bill, Indian Telecommunication Bill and various rules on e-commerce and online gaming, in addition to the Competition Amendment Bill that is pending before Parliament.

The move comes in the context of the suggestion to Indian policymakers last month by Alphabet Inc. and Google chief executive officer Sundar Pichai that technology which touches the lives of people around the world needs responsible regulation, while also highlighting the need for certainty in the legal framework.

“One view is that too much regulation can come in the way of development of a sector and add to litigation. The other is the need for ensuring a level playing ground. A view will be taken,” said the first person quoted above. A balance has to be struck between the needs for protecting consumers and fostering innovation and growth, said the person.

According to a report published by the Reserve Bank of India last month, authored by members of its department of economic and policy research, India’s core digital economy expanded from 5.4% of GVA in 2014 to 8.5% in 2019, with “digitally dependent” economy hovering at 22% in 2019. The report said India’s digital economy grew 2.4 times faster than the economy during the period, with strong forward linkages to non-digital sectors.

At the time of publishing, there was no formal comment on the subject from the ministry of corporate affairs or the ministry of electronics and IT, in response to queries emailed on Tuesday.

Given that the proposed digital competition law is a new concept and that there is not enough experience in EU, which introduced the Digital Markets Act last year, the government may go for extensive consultations on this.

In an interview published in Mint on 2 January, parliamentary standing committee chairman Jayant Sinha had said that by having an ‘ex-ante’ or forward-looking regulatory framework in addition to existing competition law which is in the process of getting amended, India will have a world-leading competition framework. Sinha also said that only a small handful of systemically important digital intermediaries who can influence the market and act as digital market gate keepers will be covered under this legislation. The Competition Amendment Bill also seeks to bring high-value mergers and acquisitions in digital economy which escapes conventional merger regulations under Competition Commission of India’s (CCI) regulatory ambit.