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    Event Report: Decoding the Digital Competition Bill, April 5, 2024

    On April 5, MediaNama conducted a discussion ‘Decoding the Digital Competiton Bill’. The discussion focused on understanding the factors and themes that shaped the Bill, the role of data in digital markets, and the impact of the implementation of competition regulations in digital markets on key stakeholders, their practices, and the Competition Commission of India, among others.

    The objectives were to discuss the following topics:

    • Competition issues related to digital markets such as platform neutrality, self-preferencing, private labels, anti-steering, gatekeeping, exclusive arrangements, bundling and tying, algorithmic transparency, search and discovery, etc.
    • Role of data in competition: including network effects, barriers to entry, portability, non personal data, etc.
    • Issues with the current competition regime
    • Role of ex-ante rules
    • Global perspectives on ex-ante law
    • Designation of Systematically Significant Digital Enterprises and Core Digital Services
    • Bandwidth of CCI
    • How does the Act interplay with other regulations like the Data Protection Act and Foreign Direct Investment
    • Policy Criteria for exemptions and differential obligations
    • Implications for consumer welfare, privacy, and security
    • Impact on large Indian companies

    Download the Event Report here

    Executive Summary

    On March 12, India’s Ministry of Corporate Affairs released a report on ex-ante regulations prepared by the Committee of Digital Competition Law (CDCL), along with the draft Digital Competition Bill (DCB), 2024, which aimed at regulating large digital platforms and preventing anti-competitive practices. This sparked a debate on the efficacy of ex-ante regulations to promote competition in India’s digital markets. Speakers weighed in on the debate at MediaNama’s discussion ‘Decoding the Digital Competition Bill’ and challenged the notion that a company’s market share automatically translates into dominance.

    They advocated for a more nuanced understanding that accounts for factors such as entry barriers and the dynamics of competition. Some speakers believed that the Digital Competition Bill (DCB) runs a risk of overregulation by casting too wide a regulatory net. Since digital markets are already regulated under new amendments in the Competition Act, they questioned if ex-ante regulations may be rendered redundant. Overregulation under the DCB could have adverse effects on the burgeoning and relatively young digital economy in India.

    The DCB may also create a lengthy process of push and pull between regulators and enterprises, burdening both with multiple litigations. Market failures can be resolved through negotiation, settlement and commitment rather than lengthy legal battles, they said. Additionally, speakers questioned the deliberate exclusion of telecom companies from the ambit of the Bill, pointing to their dominance and constant attempts to dilute network neutrality.

    While discussing the role of data in competition, speakers acknowledged that large platforms have access to large amounts of consumer data allowing them to maintain market dominance over smaller platforms. However, a speaker opposed this argument claiming that the entry of large companies into different markets can enhance competition rather than stifle it. Thus, creating barriers to entry for larger platforms, can in turn be anti-competitive. The panel also noted the concerns arising from the DCB’s data-sharing regulations, such as the implications on user privacy, the complexity of data portability for business users and the challenges in segregating and delinking personal and non-public data. They emphasized that the standards of privacy must be set out by the DPDP Act and the DCB should mandate anonymizing data.

    Speakers also called for clarity and specificity in designating Systemically Significant Digital Enterprises (SSDEs), while discussing the challenges in enforcing the DCB. They argued that the qualitative thresholds for SSDEs can be too broad. While the Bill’s broad criteria for SSDE provide regulators with flexibility in enforcement, this lack of precise terminology can lead to uncertainty for enterprises, a speaker opined.

    Significant risks like consumer fraud can arise from restrictions on anti-steering policies. Questions were raised on who between platforms and third-party entities, would ensure consumers welfare, as a lack of attention to this could negatively impact consumer trust. Further, the speakers believed that the DCB’s restrictive provisions on larger platforms could have potential negative effects on MSMEs as they heavily rely on such platforms for targeted advertising, revenue generation, cost-reduction, single sign-on, etc.

    Speakers also said that the DCB had the potential to stifle innovation and delay product rollouts. They drew parallels to instances in the EU where similar regulations like the Digital Markets Act (DMA) resulted in the same.  Challenges in regulation loom large, with potential conflicts between the DCB and existing legislation such as the Competition Act and DPDP Act. Multiplicity of regulators could exacerbate these challenges, as there may be clashes in regulations and uncertainties in policy implementation. Further, the CCI could be burdened with enforcing not only the DCB but also previous regulations such as the Competition Act which could lead to longer timelines, defeating the proposed aim of self-regulation.

    It was pointed out that, presently the  Bill focuses more on protecting existing players without considering consumer welfare or the broader business landscape. The Bill’s primary objective should be to remove entry barriers to foster competition, rather than merely protect competitors, they suggested.

    Thus, speakers emphasised that Digital markets are a separate ecosystem and new regulations must focus on understanding the various dynamics between players and stakeholders and not disrupt the system. They called for localized research to better understand the idiosyncrasies of Indian markets and craft regulations that resonate with ground realities. They also called to address redundancies within the Bill to streamline enforcement and prevent regulatory overlap. Furthermore, they called to incorporate insights from the EU’s Digital Markets Act and pay more heed to consumer welfare and efficiency.

    Video and Coverage:

    About the discussion

    Speakers:

    Keynote address

    Vinod Dhall, Founding Member and former acting Chairman of the CCI; and expert in competition policy and law.

    Competition Concerns in Digital Markets

    • Viswanath Pingali (Associate Professor of Economics, IIM-A)
    • Navneet Sharma (Director General, CUTS Institute for Regulation and Competition)
    • Meghna Bal (Director, Esya Center)

    Role of Data in Competition

    • Manjushree RM (Senior Resident Fellow, Vidhi Center)
    • Deeksha Manchanda (Counsel at Chandhiok and Mahajan)
    • Snehil Khanor (Founder and CEO, Truly Madly)

    Enforcement of the Digital Competition Act

    • Shivanghi Sukumar (Partner, Axiom 5 Law Chambers)
    • Lazar Radic (Senior Scholar for Competition Policy at the International Center for Law & Economics, Adjunct Professor of Law at IE University)
    • Parthsarathi Jha ( Partner,Economic Laws Practice)

    Participation:

    We saw participation from organisations such as CCAOI, CUTS,  Meta India, Google, The Quantum Hub,  Vidhi Centre for Legal Policy, SFLC, India, Bharucha and Partners, The Asia Group, K&S Digiprotect Services, USISPF,, BIF, Ikigai Law, PLR Chambers, Deloitte, Indiamart, The Hindu, Cyril Amarchand Mangaldas, MM TV Limited, Future of Privacy Forum, Avenue Bridge, Chandhiok and Mahajan, E-Gaming Federation, APCO Worldwide, Esya Center, FTI Consulting, Ajatshatru Chambers, E&Y, IAMAI, AWS, Office of Binoy Viswam MP, Rajya Sabha, CCG-NLUD, Games24x7, European Union, Shardul Amarchand Mangaldas & Co., Axiom 5 Law Chambers, Truly Madly, MakeMyTrip, Centre for Culture Media and Governance-Jamia Milia Islamia., Sdela Telecom LLP,  Hexagon India, USLLS, GGSIPU, British High Commission, Krafton India Pvt Ltd, Symbiosis Law School Noida, Humvatan NGO, Zebra Technologies India Pvt. Ltd.

    Support and partners:

    MediaNama organized with discussion support from PhonePe, Meta and Google and in partnership with CUTS, CCOAI.

    The post Event Report: Decoding the Digital Competition Bill, April 5, 2024 appeared first on MediaNama.

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