House panel backs ex-ante regulation for DCB but calls for nuanced approach

Business Standard

2 days ago

In its report on the evolving role of the Competition Commission of India (CCI), tabled in the Lok Sabha on Monday, the parliamentary panel on finance backed the need to have an ex-ante regulatory framework to address complexities such as self-preferencing and predatory pricing while taking a nuanced approach in adopting the Digital Competition Bill (DCB). The committee has also called for a review of the current deal value threshold so that acquisitions of micro, small and medium enterprises (MSMEs) by larger corporations do not escape regulatory scrutiny.
Stressing that the ex-post framework of the present Competition Act was ill-equipped to handle the rapid concentration of power in digital markets, the panel said, 'To address stakeholder concerns, the committee recommends that the (corporate affairs) ministry refine the DCB's thresholds and designation mechanisms to prevent inadvertent capturing of fast-growing domestic firms.'
The observations of the committee come at a time when the Ministry of Corporate Affairs (MCA) is launching a market study into the impact of ex-ante regulations, proposed in the draft DCB on the domestic market.
MCA secretary Dipti Gaur Mukherjee told the committee, '...The whole issue of digital markets and the best way forward is something which is evolving and the right balance there is very important.'
Mukherjee said that the government does not want to harm the domestic industry and the market study being commissioned by the MCA could come up with concrete solutions that will help the government do a balancing act.
'In certain positions, our domestic market has very unique features like the entire quick commerce thing, which is very, very homegrown in India. It is not there in the international arena,' the secretary said.
The MCA in 2023 had constituted a committee on digital competition law, which had submitted a draft Bill on Digital Competition Law, proposing an ex-ante regulatory framework. Some of the key concerns of stakeholders on the draft Bill are in relation to thresholds for systemically significant digital enterprises, no provision for rebutting presumption of designation based on quantitative thresholds, and definition of core digital services, among others.
The parliamentary panel's report stressed the urgency for the CCI to remain agile and continuously adapt its tools and strategies to keep pace with rapid technological advancements, and ensure effective competition law enforcement in the evolving digital landscape.
In order to address the issue of internal resources, the MCA secretary told the committee about CCI's proposal for cadre restructuring for the creation of 55 additional posts in the Commission.
The report also highlighted that as of April 30, 2025, out of a total CCI-imposed penalty of ₹20,350.46 crore, ₹18,512.28 crore has been either stayed or dismissed by appellate courts.
The antitrust watchdog, however, has managed to realise 99.2 per cent of the remaining amount.
'This data indicates that while the CCI is effective at collecting penalties that are not under litigation, its overall enforcement is significantly undermined by legal challenges,' the committee report said, urging the CCI to expand its sector-specific market studies into emerging areas where new business models are disrupting traditional competition dynamics.