Why is it in the news?
- The Committee on Digital Competition Law, established by the Ministry of Corporate Affairs in February, released a report recommending legislation to regulate the market power of Big Tech firms like Google and Meta.
Some of the Key Highlights
- The report highlights concern regarding the market dominance of these Big Tech firms, attributing it to their ability to rapidly expand their user base and establish difficult-to-dislodge market power through network effects.
- It suggests that the current Competition Act of 2002, designed for a different era, is insufficient to address the challenges posed by digitalization.
- The proposed legislation, termed the Digital Competition Act, aims to supplement the Competition Act by introducing ex-ante regulations specifically for large digital enterprises.
- Firms with a “significant presence” in the market for Core Digital Services would be designated as Systemically Significant Digital Enterprises (SSDEs) under the proposed law.
- SSDEs would be required to determine their own designation, and failure to do so could result in penalties based on the entire corporate group’s global turnover.
- However, experts anticipate significant impacts on major tech enterprises like Google, Apple, and Amazon, potentially leading to stifled innovation due to burdensome regulations.
