MCA to conduct a study on ex-ante regulations for digital markets

Ministry to invite proposals for a market study on ex ante digital regulations amid stakeholder concerns and inter-ministerial review

The Ministry of Corporate Affairs (MCA) will soon conduct a market study into the impact of ex-ante regulations for preventing anti-competitive conduct in the digital markets, according to official sources.

 

The MCA would be inviting requests for proposal (RFP) and issue terms of reference for the study to be undertaken by an external agency, sources said. 

“We do not want to over regulate the digital markets. After speaking to stakeholders, it was felt that there is a need to study the market impact of these regulations,” the source said. 

Minister of state for corporate affairs, Harsh Malhotra, had told the Parliament on July 21 that an evidence-based foundation through market studies is required to consider all relevant aspects for ex-ante regulation, considering it is in nascent implementational stages globally. 

The ministry of corporate affairs (MCA) had constituted a committee on the Digital Competition Bill based on the recommendations of the Parliamentary Standing Committee on Finance in its 53rd report on “Anti- Competitive Practices by Big-Tech Companies.” 

 

The committee submitted its report in February 2024 along with a draft Digital Competition Bill.

 

The ministry has received responses from more than 100 stakeholders, ranging from legal professionals, industry associations, civil society organisations, and domestic and foreign digital enterprises providing digital services in India.

 

The Ministry of Electronics and Information Technology (MeiTY), official sources said, had raised concerns about the draft bill with the MCA. The views of MeiTY on the Bill, Malhotra had told the Lok Sabha, were still awaited.

 

A Parliamentary Panel, looking into the role of the Competition Commission of India (CCI) in an evolving economy, particularly the digital landscape, has sought the views of the MCA on the suggestions made by some of the Indian online players regarding the draft Bill.

 

Speaking at a CCI event in March this year, Malhotra had said the government is not in a hurry to bring the Digital Competition Bill (DCB) and wants to follow due process and have more deliberations on the proposed legislation before introducing it. He said that strict interventions are required to enforce the law, self-regulation and compliance also has to be promoted.

 

The draft DCB provisions set quantitative and qualitative criteria for Systemically Significant Digital Enterprises (SSDE) such as turnover in India of not less than Rs 4000 crore, or global turnover of not less than USD 30 billion.