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๐‚๐จ๐ฆ๐ฆ๐ข๐ญ๐ญ๐ž๐ž ๐จ๐ง ๐ƒ๐ข๐ ๐ข๐ญ๐š๐ฅ ๐‚๐จ๐ฆ๐ฉ๐ž๐ญ๐ข๐ญ๐ข๐จ๐ง ๐‹๐š๐ฐ ๐ฉ๐ซ๐จ๐ฉ๐จ๐ฌ๐ž๐ฌ ๐ซ๐ž๐ ๐ฎ๐ฅ๐š๐ญ๐จ๐ซ๐ฒ ๐ฆ๐ž๐œ๐ก๐š๐ง๐ข๐ฌ๐ฆ ๐Ÿ๐จ๐ซ ๐๐ข๐ ๐ข๐ญ๐š๐ฅ ๐ฆ๐š๐ซ๐ค๐ž๐ญ๐ฌ ๐ข๐ง ๐ˆ๐ง๐๐ข๐š

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The Committee on Digital Competition Law has recommended a new framework with respect to the Digital Competition bill. The Committee was set up to assess whether the existing framework under the Competition Act, 2002 was sufficient to deal with challenges that had emerged from the digital economy and whether there was a requirement of separate ex-ante competition framework for digital markets in India.

๐–๐ก๐ฒ ๐ฌ๐ž๐ฉ๐š๐ซ๐š๐ญ๐ž ๐ฅ๐ž๐ ๐ข๐ฌ๐ฅ๐š๐ญ๐ข๐จ๐ง?

As per the Committee, the current framework needs to better tackle concerns regarding anti-competitive practices by major digital firms. There is also a need for a framework to identify large digital enterprises with a โ€˜significant presenceโ€™ in India in selected โ€˜core digital servicesโ€™ and introducing pre-determined rules for their conduct. The Committee explored the option of amending the Competition Act to include a specific chapter for digital markets, however, it was of the view that modifying the Competition Act’s fundamental framework, which relies on post-event enforcement, could cause uncertainty and prolonged litigation over its scope. Hence, the Committee felt it was unfeasible to introduce a separate chapter under the Competition Act solely for regulating digital enterprises through ex-ante measures and instead proposed introducing a new law to deal with large digital enterprises.

๐’๐ฎ๐ ๐ ๐ž๐ฌ๐ญ๐ข๐จ๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ž ๐‘๐ž๐ฉ๐จ๐ซ๐ญ:

(a) Identifying Systemically Significant Digital Enterprises (SSDE): these include Enterprises having significant presence in Core Digital Service in India i.e services like online search engines, social networking services, web browsers, cloud services, etc.

(b) The criteria for Deemed SSDE would include (i) turnover in India of not less than INR 4000 crore; OR (ii) global turnover of not less than USD 30 billion; or (iii) gross merchandise value in India of not less than INR 16000 crore; OR (iv) global market capitalisation of not less than USD 75 billion and additionally they should have at least one crore end users or ten thousand business users.

(c) Self-reporting system’s wherein the enterprises meeting the criteria of SSDE entities are required to notify the CCI.

(d) Requiring SSDE’s to comply with Chapter III of the draft regulations which includes (i) Anti-circumvention from obligations (ii) Reporting and Compliance (iii) Fair and Transparent Dealing (iv) Self-preferencing (v) Restricting third-party applications and (vi) Anti-steering.

(e) The proposed bill to have an overriding effect and order passed by the CCI and can be appealed before the NCLAT.

A copy of the Committee report is enclosed herewith.

Readers are welcome to share their views withย Regstreet Law Advisorsย onย info@regstreetlaw.com.

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