DIGITAL ANTITRUST LAW MAY BE FOR BIG TECH ONLY

Why in the news?

  • The planned digital antitrust law by the Indian government is probably going to be revised, with higher bar requirements for businesses and enterprises to fall under its purview.
  • This modification indicates that the regulation may largely target huge digital platforms like as Amazon, Meta, Apple, Google, and Microsoft.

DIGITAL ANTITRUST LAW MAY BE FOR BIG TECH ONLY - UPSC

About the Digital Antitrust Law

  • Objective: The proposed law seeks to regulate major digital firms in order to prevent monopolistic activities and promote fair competition in the digital economy.
  • Target: The law is expected to largely affect Systemically Significant Digital Enterprises with significant market power and resources.
About ‘Big Tech’

  • Big Tech refers to the world’s largest and most powerful technology corporations, including as Amazon, Apple, Meta (previously Facebook), Google, and Microsoft.
  • Market Influence: These corporations wield significant market power, impacting worldwide digital markets, consumer behaviour, and regulatory landscapes.

Digital Competition Bill

  • The Digital Competition Bill aims to address the issues of digital marketplaces, specifically prohibiting anti-competitive behaviour by giant tech businesses.
  • Comparison with the EU: The law is modelled after the EU’s Digital Markets Act, which likewise addresses the behaviour of huge digital platforms.

Background of the Bill:

  • In February 2023, the Ministry of Corporate Affairs established the Committee on Digital Competition Law (CDCL) to investigate the necessity for a distinct law governing competition in digital markets.
  • The CDCL advised that the current ex-post structure under the Competition Act of 2002 be supplemented by an ex-ante framework.
  • It established this ex-ante structure in the draft Digital Competition Bill.

What is an ex-ante framework?

  • The Competition Act of 2002 is built on an ex-post structure, which implies that the CCI can employ its enforcement powers only after anti-competitive activity has happened.
  • However, in digital markets, the CDCL has called for ex-ante competition. This means that the CCI’s enforcement powers will be expanded so that it can pre-empt and deter digital companies from engaging in anti-competitive behaviour in the first place.
  • The European Union is now the only jurisdiction with a full ex-ante competition regime in place, as outlined in the Digital Markets Act.