Govt to exempt certain public enterprises from Digi Competition Bill | News – Business Standard

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“It is an overarching section. The government has kept room to make changes in the context of these exceptions,” said Sagardeep Rathi, Partner at Khaitan & Co.

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The government has proposed safeguards to exempt public interest entities from the provisions of ex ante regulations under the proposed Digital Competition Bill.

Section 38 of the proposed bill empowers the Central Government to exempt enterprises from the application of one or more provisions of the Bill, the rules or regulations made thereunder, or any part thereof, for a specified period.

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The provision states that the government can do so in the interest of the security of the State or public interest; in accordance with any obligation India has assumed under any treaty with another country; or if it performs a sovereign function on behalf of the Central Government or a State Government, but only in respect of activities related to the discharge of the sovereign functions.

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“It is an overarching section. The government has kept room to make changes in the context of these exceptions,” said Sagardeep Rathi, Partner at Khaitan & Co.

Experts have noted that these provisions of the Draft Digital Competition Bill are akin to Section 54 of the Competition Act, under which business-friendly exemptions have been issued. The government operates various digital platforms such as the Open Network for Digital Commerce, IRCTC, E-NAM (National Agriculture Market), among others.

“At first glance, the inclusion of this provision in the Draft Digital Competition Bill seems to espouse a similar intent. However, it is hoped that it is not invoked to further protectionist sentiments by exempting government enterprises and local Indian enterprises, which qualify to be designated as ‘Systemically Significant Digital Enterprise’; such an exemption has the potential to lead to the creation of an uneven playing field,” said Unnati Agrawal, Partner at IndusLaw.