MeitY to propose removal of ex-ante provision from Digital Competition Bill

The Ministry of Electronics and Information (MeitY) is expected to ask the Ministry of Corporate Affairs (MCA) to exclude the ex-ante provision of the proposed Digital Competition Bill (DCB) for the time being as per a report by the Economic Times.

This recent development comes in the wake of IT ministry’s extensive discussions with the major industry players over several aspects of the bill.

In the discussions that took place, which included representatives from MCA and CCI, several start-ups, industry groups, and the big tech companies stated that provisions in the bill pertaining to ex-ante, SSDE, among others may be destructive for Indian companies, especially startups.

The Digital Competition Bill, 2024 (DCB) aims to prevent anti-competitive practices in digital markets and curb market dominance by tech companies. It includes core digital services, including online search engines, social networking services , video-sharing platforms, and more

Terming the drafted DCB as “unfair imposition on digital companies” which can make businesses “untenable”, Internet and Mobile Association of India (IAMAI), an NGO representing the interests of online and mobile value added service industry warned that the ex-ante provisions of the could “dry up venture investments in tech startups as per ET.

An ex-ante provision is a regulation or a law that empowers the government to take action based on its prediction or forecast of the event. An ex-post, on the other hand, is where the government takes legal action after the event has occurred.

The Competition Commission of India (CCI), the nodal agency which comes under the Ministry of Corporate Affairs (MCA) is responsible for enforcing the Competition Act, 2002 to promote competition and prevent activities that may have an adverse impact on competition in the country. CCI works on the provision of ex-post.

The committee on Digital Competition Law (CDCL) submitted its reports to the Ministry of Corporate Affairs evaluating the need for an ex-ante competition framework complementary to the current ex-post policy approach for regulating the digital markets in the country

As per the report, the committee felt that the current ex-post framework (intervening after an event occurs) under the Competition Act, 2002, does not facilitate timely redressal of anti-competitive conduct by digital enterprises. Outlook India