It is released by the Standing Committee on Finance, and noted that the existing ex-post Competition Act, 2002, is ill-equipped to deal with digital market.

• The Competition (Amendment) Act, 2023, introduced provisions like Deal Value Thresholds (DVT), Settlement and Commitment Mechanisms, etc., to deal complexities of the digital market.
• The CCI has also recently constituted a Digital Markets Division (DMD).

Key Issues Highlighted:

• Anti-Competitive Practices: Dominant firms employ self-preferencing, predatory pricing, and tying/bundling, stifling innovation.
• Regulatory Limitations: 
  • Institutional Capacity: CCI faces significant human resource vacancies (only 113 out of 195 sanctioned posts filled), lack of specialized technical expertise (e.g., AI).
  • Enforcement Effectiveness: CCI-imposed penalties (Rs. 18,512.28 crore out of Rs. 20,350.46 crore) are stayed or dismissed by appellate courts.
  • Digital Competition Bill Concerns: Broad thresholds, absence of a rebuttal mechanism, and potential overlap with the Digital Personal Data Protection Act (DPDP Act).
  • MSME Vulnerability: The DVT of Rs. 2000 crore raises concerns about unchecked MSME acquisitions.

Key Recommendations

• Enforcement & Digital Bill: Reduce litigation delays via robust legal defence and the 25% pre-deposit for appeals.
• Protect MSMEs: Review the DVT for MSMEs and boost investigations into predatory pricing.
• Proactive Approach: Expand market studies (e.g., on AI) and deepen consumer welfare integration, focusing on data privacy.
• Policy Framework: Implement the National Competition Policy (NCP).