The Competition Commission of India recently held an inter-departmental consultation with the Ministry of Electronics and IT (MeitY). The meeting happened in the background of the Digital Personal Data Protection (DPDP) Act, 2023, the Competition Act, 2002 and the perceived overlap in the digital economy. The press release also mentions that topics such as growth and innovation in the digital sector and consumer welfare were also discussed in the meeting.

Why was there a need for consultation, and why now?

The meeting happens at a time when there is a renewed focus on digital economic growth in India. The Indian government is running multiple programmes such as Digital India, AI Mission and Startup India to facilitate investment and creation of job opportunities in the sector. At the same time, there is renewed focus on the digital economic regulatory framework. The enactment of the 2023 Data Protection law is seen as a watershed moment because it restores users' control over their personal data, which was previously at the mercy of data controllers. Under the new law, consumers will have the ability to resolve their grievances through a statutory body within a specified time frame.

How is data protection a competition concern?

The answer lies in one of the studies commissioned by the CCI itself. In that study, the regulator stated that, prima facie, a privacy violation is typically considered a consumer law issue; however, the same violation, if as a business policy, could also qualify as a competition concern. Some of the Big Tech firms, such as Google, Meta (Facebook) and Amazon, have also been held in violation of competition law on multiple instances in India and abroad, where the dispute, in effect, was about privacy violation.

One of the major gaps in the regulatory framework is the overlap between various branches of the law and effective coordination between various regulators. This leads to inconsistent law and policy where the question of economic regulation is raised before constitutional courts in the form of a dispute. This aspect is glaring in the case of data protection law and competition law in the digital economy.

As argued elsewhere, the statutory bodies ought to avail the referencing mechanism available under the law to fill such a gap. This referencing mechanism ought to work in a two-way manner, where the data protection authority and the competition watchdog could consult each other. For instance, the Competition Commission of India (CCI) recently made a reference to MeitY in the online RMG case to better understand the sectoral regulation. Similarly, the data protection authority under the DPDP Act could consult the competition authority wherever the case involves market power and systematic abuse of such.

Are there any implications for a larger AI governance framework in the country?

India is becoming a major consumer base for global AI companies. The digital regulatory framework has come a full circle with the advent of AI. Artificial Intelligence, while emblematic of productivity and efficiency, has led to novel questions in multiple branches of law, such as intellectual property and the issue of deepfakes, along with data protection legislation and competition statute. This consultation meeting has happened at a time when India is also planning to host the AI summit in February next year. All these issues would be a subject matter of discussion there.

Takeaways

Inter-departmental consultation is a routine exercise within the government. Some of the sectoral regulations specifically provide for referencing mechanisms, highlighting the need to resolve such an overlap. The consultation between the CCI and MeitY should be a welcome step from an economic regulation perspective. The said meeting might also be reflective of a larger shift in approach on the part of the government to ensure better coordination of the digital economy.