Experts Discuss Digital Competition Bill, Its Effectiveness & Areas For Improvement

The Digital Competition Bill 2024 aims to regulate large digital platforms and preventing anti competitive practices. 

R.S. Sachdeva, President (Group) Legal, JK Organisation says, “The reason for this separate enactment is because the digital space moves at a very fast pace than other segments, therefore the competition act where we saw certain investigations going on for upwards of 12 years, there was a necessity to bring this new regulation with the Digital Competition Bill.”

The Bill introduced in March 2024 is a regulation applicable to Systematically Significant Digital Enterprises (SSDEs). The identification of an SSDE is done through two methodologies, quantitative threshold and qualitative threshold.

Dr Mukul Shastry, General Counsel, Cube Highways explains, “Digital markets are very different from the brick-and-mortar markets that the competition primarily deals with. We have modeled our competition act in 2002 based on the practices in EU and UK and we are doing the same when it comes to the digital competition act.”

Shastry gives the example of Google’s UCD policy wherein if a company has a billing/payment system other than the one provided by google, then the company must give 11-26 per cent of revenue to Google.

He adds that the current law falls short where the parameters to become an SSDE are very broad, any company that becomes an SSDE comes in direct competition with huge companies like Google, Facebook, etc. in compliance. This makes it extremely difficult for the smaller players in the industry.

Pulin Kumar, Ex Senior Legal Director, Adidas India notes, “From the industry perspective, whenever the in-house council goes to the board and notify them of a new law, the first reaction is that this is a highly regulated country. From a broader perspective, the law proposed now is a paradigm shift. We are visualising an ecosystem which puts the onus on the enterprise to be regulated or be exposed to huge primitive provisions.”

Kumar adds that the government is working with some agencies which are working under various ministries and they have a very consultative approach with the corporations. Invest India is coordinating with the industry and the ministries to relay concerns and points of views.

At the 4^th Edition of the BW Legal World Top 100 General Counsel Conclave & Awards, Moderator Deeksha Manchanda, Partner, Chandhiok & Mahajan underscores, “There are a lot of unintended consequences that you could be dealing with. We are not the European economy and we are not European users either. There is a lot of merit in rethinking the law, this is the first time the draft has come out even though the industry has been talking about it since 2021.”

Manchanda adds that there is a need for careful consideration of the present bill. It’s open for comments till 15 May and the bill merits this kind of deliberation because of how many businesses it could end up affecting.