The government has set up a 16-member committee to examine the need for a separate law on competition for digital companies. The committee, chaired by Manoj Govil, secretary, Ministry of Corporate Affairs (MCA), is to review the existing provisions of the Competition Act, and if the rules under it are sufficient to deal with the challenges that have emerged from the digital economy.

The move follows a recommendation by the Parliamentary Standing Committee on Finance on the anti-competitive practices of big tech companies to prevent the formation of monopolies. The Standing Committee report is focused on issues such as deep discounting and pricing, platform neutrality, search and ranking preferencing, advertising policies and more. The report recommended defining big tech companies as systemically important digital intermediaries (SIDIs) on the basis of their revenues, market capitalisation and end users.

The committee constituted by the MCA has been directed to examine the need for an ex-ante regulatory mechanism or regulation before the occurrence of an event. It was among the Parliamentary Committee report’s recommendations that the committee recommend that competitive behaviour needs to be evaluated ex-ante before markets end up monopolised instead of the ex-post evaluation being carried out at present. Additionally, as per the report, the committee must also study the best international best practices on regulation in the field of digital markets, as well as other regulatory regimes, institutional mechanisms and government policies regarding competition in digital markets. They must also study the practices of SIDIS which limit or have the potential to cause harm in digital markets.

Further, the Parliamentary Committee report extended the purview of the committee to any other matters related to competition in digital markets that the committee may consider relevant. The committee will submit its report as well as a draft Digital Competition Act within three months.