Parliament panel backs phased digital competition law, EU-style appeal for ‘key player’ tag

A parliamentary panel has recommended that India’s upcoming digital competition law adopt a phased, evidence-led rollout and include an EU-style review mechanism for designating Big Tech as ‘systemically significant digital enterprises’ (SSDEs).

In a report on the evolving role of the Competition Commission of India (CCI), tabled in the Lok Sabha on Monday, the Parliamentary Standing Committee on Finance, chaired by BJP leader Bhartruhari Mahtab, supported the need for an ex-ante regulatory framework to tackle challenges like self-preferencing and predatory pricing. It said the current ex-post provisions under the Competition Act are ill-suited to address the rapid concentration of power in digital markets.

“To address stakeholder concerns, the committee recommends that the (corporate affairs) ministry refine the DCB's thresholds and designation mechanisms to prevent inadvertent capturing of fast-growing domestic firms,” the panel said. It also called for a review of the current deal-value threshold to ensure acquisitions of micro, small, and medium enterprises (MSMEs) by larger corporations do not escape regulatory scrutiny.

Rebuttal rights for tech firms

The committee proposed a “rebuttal mechanism” modelled on the EU framework, allowing companies to contest their SSDE designation in exceptional cases. This, it said, would safeguard against overreach and misclassification.

Balancing act

The Ministry of Corporate Affairs told the panel that India must be able to respond quickly to emerging anti-competitive trends in digital markets to pre-empt monopolies. MCA secretary Dipti Gaur Mukherjee noted, “The whole issue of digital markets and the best way forward is something which is evolving and the right balance there is very important.”

The CCI, for its part, said ex-ante rules should “target/prevent only such conduct that is unambiguously anti-competitive” to avoid stifling innovation. Minister of State for Corporate Affairs Harsh Malhotra recently told Parliament the government will conduct market studies to lay an “evidence-based foundation” for the new regime.

The DCB is based on recommendations made last year by a high-level committee led by then corporate affairs secretary Manoj Govil, which proposed a law covering only SSDEs. The draft bill submitted by the panel is currently under government review.