Govt to Introduce Digital Competition Bill in Next Fiscal, Likely to Amend IBC First

Prime Minister Narendra Modi-led government is likely to postpone the introduction of the proposed digital competition bill digital competition billto the next financial year. The Ministry of Corporate Affairs (MCA) has deferred the introduction of the bill that aims to regulate big companies, as it has first planned to amend the Insolvency and Bankruptcy Code (IBC) and the Companies Act, the Economic Times reported. 

“The ministry of corporate affairs (MCA) has received stakeholder comments on the draft bill. More inter-ministerial discussions would be undertaken to drum up consensus on it. It may be finalised next fiscal year,” the Economic Times reported, citing sources. 

The decision to bring digital competition legislation first came to light when a Committee on Digital Competition Law (CDCL) headed by then corporate affairs secretary Manoj Govil suggested a new antitrust law with an ex-ante framework to regulate only “systemically significant digital enterprises” that have a “significant presence” in the country. The committee was set up by the MCA in February 2023.

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Speaking at the 10th National Conference on Economics of Competition Law in New Delhi in March this year, Minister of State for Corporate Affairs Harsh Malhotra said that the government is not in a hurry to bring the law. 

“There is a need being felt for a Digital Competition Bill. We are not in a big rush. After due process, the government wants to bring this Bill. Indian players in the digital market should not be dominated by global players, and they should not dominate the smaller players- these discussions are on,” Malhotra had said, according to the Business Standard. 

Need for Digital Competition Law 

The committee in its report stated that the current Competition Act of 2002 doesn’t provide a solution for timely redressal of anti-competitive practices by digital enterprises. It suggested enacting a law that would enable the Competition Commission of India (CCI) to selectively regulate big digital companies before an anti-competitive act takes place. The proposed legislation would only regulate those digital companies that have a significant presence and have the potential to influence the online space.