MCA plans market study on thresholds for Big Tech companies and core digital services

In what could indicate a revival of the Digital Competition Bill and tighter oversight of the market practices of Big Tech firms, the government has now decided to get a market study done on key provisions of the proposed legislation, including core digital services and the thresholds to decide Big Tech firms.

To this end, the Ministry of Corporate Affairs has floated a Request for Proposal to engage an agency for conducting a market study on the qualitative and quantitative thresholds for Big Tech companies and core digital services (CDS).

“The objectives of the study will be to review and evaluate the proposed qualitative and quantitative thresholds outlined in Clause 3 of the draft Digital Competition Bill,” the ministry said, adding that it would also review the list of proposed core digital services included in Schedule I of the draft DCB.

Further, the study would also be expected to evaluate the implications of the draft Digital Competition Bill on these services and their stakeholders, including the potential impact on competition and market entry and assess the potential impact of the proposed ex-ante framework on smaller players including start-ups and micro, small and medium enterprises.

The study would have four key focus areas including the efficacy and the impact of the thresholds proposed for Big Tech firms under the DCB, reviewing the nine services proposed as core digital services, assessing the current regulatory and legal frameworks governing digital markets in India and other major jurisdictions and international best practices, as well as the way forward on how to foster a competitive environment in the digital economy.

The study would be expected to cover and gather data and facts from various stakeholders including major technology firms and e-commerce platforms, think tanks, domestic and foreign digital enterprises providing digital services in India, relevant start-ups and MSMEs, civil society organisations, experts from the field of competition law and policy and industry associations.

Based on a report of the Parliamentary Standing Committee on Finance on the subject titled “Anti-Competitive Practices by Big Tech Companies”, the ministry of corporate affairs set up a high-powered committee on digital competition law had prepared a draft digital competition bill and placed it for inputs from stakeholders in early 2024.

The Committee proposed that the Draft DCB should apply to a list of nine (09) Core Digital Services that are susceptible to concentration, drawing from the CCI’s enforcement experience, market studies, and emerging global practices. It had also recommended that the draft DCB should only regulate enterprises which have a ‘significant presence’ in the provision of a Core Digital Service in India and the ability to influence the Indian Digital Market. Enterprises fulfilling such thresholds may be designated as “Systemically Significant Digital Enterprises” (SSDEs).