Parl panel backs ex-ante regulation for DCB, urges deal threshold review

Business Standard

a day ago

The parliamentary panel on finance, in its report on the evolving role of the Competition Commission of India (CCI) tabled in the Lok Sabha on Monday, backed the need for an ex-ante regulatory framework to address complexities such as self-preferencing and predatory pricing, while recommending a nuanced approach to 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 Ministry refine the DCB's thresholds and designation mechanisms to prevent inadvertent capturing of fast-growing domestic firms.'
The observations come as the Ministry of Corporate Affairs (MCA) launches 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.' She said the government did not want to harm the domestic industry and that the market study being commissioned by the MCA could help with concrete solutions on provisions that would enable a balancing act.
'In certain positions, our domestic market has very unique features — like the entire quick commerce thing is something which is very, very homegrown in India. It is not there in the international arena,' the secretary said.
In 2023, the MCA constituted a Committee on Digital Competition Law, which submitted a Draft Bill proposing an ex-ante regulatory framework. Key stakeholder concerns on the draft Bill include thresholds for designating Systemically Significant Digital Enterprises, the absence of provisions to rebut the presumption of designation based on quantitative thresholds, and the definition of Core Digital Services.
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.
To address the issue of internal resources, the MCA secretary informed the committee about the CCI's proposal for cadre restructuring to create 55 additional posts.
The report also highlighted that, as of April 30, 2025, out of a total imposed penalty of Rs 20,350.46 crore by the CCI, Rs 18,512.28 crore had 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 standing committee's report said.
The panel urged the CCI to expand its sector-specific market studies into emerging areas where new business models are disrupting traditional competition dynamics.
The committee has also asked the government to revisit and adopt an updated National Competition Policy, drafted in 2011, to provide an overarching framework for promoting competition across sectors.