• Notification Date: 13-02-2024
• Notification No: N/A

Digital Competition Bill: 58 Stakeholders write to MCA over Transparency Concerns

About 58 stakeholders from across the country have written to the Secretary of the Ministry of Corporate Affairs (MCA), Dr Manoj Govil, over their exclusion from the consultations on the Digital Competition Bill. 

The stakeholders have urged the MCA to hold an "open consultative public engagement process" while drafting the Digital Competition Bill, which is understood to be in the final stages. 

The think tanks and consumer advocacy organisations that have written to the government include the Cyber Cafe Association of India (CCAOI), Internet Society of India, India Internet Foundation (IFF), and Consumer Unity and Trust Society (CUTS International) among others. 

In their letter, the stakeholders have asked the ministry to consider concerns around the impact of the upcoming bill on end consumers and small businesses that rely on information communication technology (ICT) tools. 

This comes against the backdrop of a Committee on Digital Competition Law (CDCL) that the MCA formulated in February to work on the contours of the upcoming law in India. 

Industry experts suggest that the law is likely to benefit Indian small businesses and startups by providing them a level playing field with tech giants. However, many stakeholders who are signatories of the letter say the committee should consider the impact of such a law on end consumers and smaller players and civil society organizations (CSOs). 

“In 2022, the Parliamentary Standing Committee on Finance (Finance Committee) held oral evidence and meetings with industry stakeholders and government departments on the issue of “Anti-competitive practices by Big Tech companies” and tabled their report in the Parliament in December 2022,” the stakeholders' letter. 

They cited the report that recommended India should have a Digital Competition Act consisting of set rules based on recent and ongoing antitrust cases in relation to the digital markets. 

However, various civil society organisations (CSOs) including signatories of the aforesaid letter were not invited by the Finance Committee to present their views, the stakeholders have alleged. 

They also said they are concerned that the proposed Digital Competition Act would impact a wide range of subjects such as digital inclusivity, user experience, data protection and security, foreign investment, cost of doing digital business for MSMEs, and there would also be an indirect impact on cost for consumers, etc. These issues might become big as the current discourse around the upcoming bill is informed by only a few stakeholders even though the proposed law directly and indirectly affects a much wider range of stakeholders, they said. 

The letter also makes a case against the adoption of ex-ante laws under the new digital competition law. Ex ante is Latin for 'beforehand', so legally, any law that is formed before the occurrence of a situation, is called an ex-ante law. It is important to note that only two to three legal systems have adopted ex ante laws globally. 

“If India introduces a prescriptive ex ante law, then India may no longer be the “first market” for newer technologies (equivalent of Digital Competition Act does not exist in most of the other jurisdictions),” the letter noted. It added, “An ex-ante law which limits data will naturally drive costs for advertising and digital marketing as particularly the larger brands will continue to spend even without precise targeting. Hence, the ex-ante laws could inadvertently increase customer acquisition costs for small businesses, and it would eventually decrease their global market footprint. Small businesses do not have the runway to undergo this type of change.” 

India’s Digital Competition Act is in the works amid growing concern among policymakers about the dominance of tech giants in the digital economy, and the need to ensure a level playing field for all players, including startups in the market. The proposed new digital competition law is expected to promote competition and consumer protection in India.  

It was reported previously that an inter-ministerial panel's report and a set of recommendations on the draft digital competition bill are in the final stages and are likely to be submitted to the MCA by the first week of July.