Will Digital Competition Bill benefit MSMEs?

The explosive growth of digital platforms has revolutionised the way we live, work, and interact. While offering undeniable benefits in terms of convenience, choice, and innovation, the dominance of a few tech giants has also raised concerns about unfair market practices, stifling of competition, and potential harm to smaller businesses, especially micro, small, and medium enterprises (MSMEs).Concerns about dominance by large tech companies have led to the proposal of a new Digital Competition Bill (DCB) aimed at regulating these digital behemoths and fostering a more level playing field. However, recently, India SME Forum (ISF) expressed concerns over the proposed Bill. Let us look at the pros and cons of the Bill with special reference to MSMEs.The draft Digital Competition Bill, released in March 2024, identifies large digital platforms as ‘Systemically Significant Digital Enterprises’ (SSDEs) based on factors like market share and user base. The Bill proposes to prohibit anti-competitive practices like self-preferencing (promoting the platform’s own products over competitors) and data discrimination against businesses ( those indulging in such discriminatory practices will be outlawed). Further it aims to promote interoperability.Platforms will need to ensure data portability, allowing users and businesses to move their data seamlessly to other platforms. The Bill mandates greater transparency in how algorithms rank content and how platforms utilise user data. Finally, the Bill further aims to empower the Competition Commission of India (CCI) by granting enhanced powers to investigate and penalise violations. This legislation represents a significant shift from India’s current reactive regulatory system towards an ‘ex-ante’ framework by empowering authorities to intervene before potential anti-competitive behaviours cause harm. Inspired by efforts such as the European Union’s Digital Markets Act, the Bill signifies a crucial step in creating a fair and more competitive landscape within the nation’s digital ecosystem.

Will Digital Competition Bill benefit MSMEs? – Reader Mode