As the digital economy witnesses unprecedented growth, the Indian government is gearing up to introduce a new law designed to curb anticompetitive conduct among major players such as Amazon, Google, and Facebook. An expert panel, commissioned by the corporate affairs ministry to assess the necessity of such legislation, is expected to present its findings, proposing both a new law and a draft bill.
Key Points:
- The proposed bill aims to ensure fairness in the actions of search engines, online marketplaces, and social media platforms.
- The legislation is not anticipated to be tabled before the upcoming elections due to the limited duration of the budget session, which will prioritize issues of broader public interest.
- Once the expert panel submits its report, the ministry will initiate a public feedback process to gather diverse perspectives on the matter.
Digital Economy’s Significance:
- Union Minister of State for Electronics and IT, Rajeev Chandrasekhar, highlighted that the digital economy is poised to contribute over 20% to India’s total GDP by 2026.
India’s Digital Transformation:
- India has made substantial strides in digitalization across sectors, with initiatives like the Unified Payments Interface (UPI) revolutionizing the fintech ecosystem.
- The launch of AI-backed initiatives and the opening of India Stack, a collection of digital public goods, have propelled the country’s tech ecosystem forward.
Regulatory Framework Development:
- In 2022, the parliamentary standing committee on finance proposed an ex-ante regulatory framework for systemically important digital economy firms, emphasizing a set of guidelines before violations occur.
- The expert committee, formed in response to these recommendations, assessed whether existing competition laws were adequate for addressing challenges in the digital economy or if a separate regulatory regime was necessary.
Upcoming Legislative Initiatives:
- The new bill targeting anticompetitive practices is part of a broader effort to enhance regulatory frameworks. Two additional bills, focusing on amendments to the Bankruptcy Code and the Companies Act, may also be introduced in Parliament post-elections.
