There has been a lot of noise around the topic of digital growth recently. It is both positive and negative. The digital developments, such as the growth of AI, are beneficial to a large sector to a large extent. There are also equal threats associated with digital growth, such as the increase in cybercrimes,
possible replacement of jobs by AI, etc. Well, it’s an additional responsibility of the government to make new legislation for rapid development. The global economy has been significantly altered by the rapid expansion of digital platforms, including Amazon, Flipkart, Facebook, and Google. The control of vast quantities of data and the unprecedented influence on market dynamics that these tech giants exercise are solid. Their dominance has resulted in various problems, such as the exploitation of consumer data, the suppression of competition, and unreasonable business practices.
In a scenario where many services are provided for free in exchange for user data, conventional metrics of market power, such as price, are less pertinent. This requires a new regulatory approach specifically designed for the digital era, and the Digital Competition Bill, 2024 is drafted to address this need. At a time when the current scope of digitalisation was unimaginable, the current ex-post framework under the Competition Act, 2002 was designed to ensure contestability and fairness in traditional markets. Specific components of the past structure, which is characterised by the time-consuming nature of enforcement proceedings, may not be suitable for digital markets due to their distinctive characteristics. In recent years, there has been a significant increase in stakeholder concerns regarding the potential anti-competitive behaviour of large enterprises that provide digital services.
Why is the Competition Act not sufficient? This is predominantly because there are few to no regulations in the Act to curb the discrepancies in the digital market, and the growth of the digital market in India is a hot topic in every international forum. Although it has left a huge global impact, what have we done to meet the legal challenges that could arise from this massive technological shift in the market. The need for all-inclusive legislation is vital as the number of safety and cyber threats has increased rapidly over the past few years.
To curb this dent in the legislation, the Digital Competition Bill has been drafted. The CCI is directed to designate companies as Systematically Significant Digital Enterprise (SSDE). Tech companies are predominantly against the bill as they have an open nature of handling privacy concerns, and providing the information they have to third parties is currently easier. All this is discussed in the new bill, making it more difficult in the name of security. It further looks into the anti-competitive aspects and ways to promote fair competition in the digital market. The Committee on Digital Competition Law was set up to examine the previously existing regulatory mechanism for the rising digital markets in India. The main objective of this committee was to review the Competition Act, 2000, which currently deals with digital markets.
There is a need to revisit the existing Act to make sure that it is well-equipped with the laws to deal with the challenges of the emerging digital economy and markets. These developments proves that the nation is adapting well to developments and to ensure that the advantages of digital innovation are widely distributed and that market power is not concentrated in the hands of a small number of dominant companies, such regulatory frameworks will likely become more critical as the digital economy continues to undergo further transformations.
Done By: Anoushka Samyuktha, B.A LL.B (Hons), LLM (Criminal Law), Junior Legal Consultant
For Origin Law Labs
