The Committee on Digital Competition Law (CDCL/the Committee) released its report recommending a new Digital Competition Law for India alongside the Draft Digital Competition Bill (DCB).
About Digital Competition Bill 2024:
- The Digital Competition Bill 2024 addresses the evolving challenges in digital markets.
- It introduces an “ex-ante” regulatory framework, aimed primarily at major digital enterprises to prevent anti-competitive practices before they manifest.
- The Bill is inspired by global precedents, notably the EU’s Digital Markets Act, and seeks to adapt similar regulatory strategies.
Key Provisions:
- Systemically Significant Digital Enterprises (SSDEs): These are entities with a substantial user base and specific financial benchmarks.
- SSDEs are mandated to adhere to stringent regulatory conditions to promote fair competition.
- Thresholds for Classification: SSDEs must meet financial thresholds (e.g., turnover, market capitalization) or user-based metrics (such as the number of users or business clients).
- Non-compliance with these criteria and reporting requirements could result in penalties.
- Associate Digital Enterprises (ADEs): Larger corporate groups that offer core digital services and have multiple entities must identify and declare all related ADEs.
- Both SSDEs and ADEs are subject to similar regulatory obligations.
Need for the Bill:
- The rapid dominance of large digital firms has the potential to irreversibly tip the scales of the market, which the current ex-post regulatory framework (which acts after violations have occurred) struggles to address effectively.
- The Bill aims to provide timely interventions to prevent potential market abuses and maintain competitive digital markets.
Ref: Source
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