Decoding India’s Digital Competition Act

Author: LawSphereX

Category: Technology, Cyber & Privacy

Published: 2026-08-23T19:12:26.072Z

Updated: 2026-08-30T07:12:44.127Z

DECODING INDIA’S DIGITAL COMPETITION ACT

Prateek Sethi, Bharti Enterprises Limited Introduction The rapid evolution of the digital landscape has presented unprecedented opportunities and challenges. While digital platforms have revolutionized access to information, goods, and services, their increasing dominance has raised concerns about anti-competitive practices, abuse of market power, and the erosion of consumer choice. In response, India is poised to enact a Digital Competition Act, a landmark legislation aimed at fostering a level playing field and ensuring fair competition in the burgeoning digital economy. This article delves into the nuances of the proposed Act, examining its key provisions, potential impact, and the broader context of digital regulation globally.

As background, the Parliamentary Standing Committee on Finance, on 22 December 2022, submitted a report titled ‘Anti-Competitive Practices by Big Tech Companies’ (“Report”) which identified 10 anti-competitive practices in digital markets, such as anti-steering, selfpreferencing, bundling/tying, unauthorized non-public data usage to one’s own advantage, etc. Upon assessment of these practices and the developments in certain foreign jurisdictions, the Report recommended the formation of the Committee on Digital Competition Law (“CDCL”) to study the possibility of introducing a Digital Competition Act for ex-ante regulation of digital markets (i. e. , pre-determined rule-based enforcement). A nine member CDCL was established on 6 February 2023 to study the facets of digital markets and draft the Digital Competition Act.

The proposed Digital Competition Act is expected to tackle these practices and their adverse impact. It seeks to establish a process of identifying ‘systemically important digital intermediaries’ (“SIDIs”). The Digital Competition Act will mark a fundamental shift in Indian antitrust regulation from the Competition Commission of India’s (CCI) ex-post facto review of conduct to now an exante framework, in the digital markets. The Digital Competition Act is expected to address the ten different prevalent anti-competitive practices in digital markets as identified in the Report, and additional concerns that may be identified by the CDCL. Further, the Digital Competition Act will lay down the process for identifying SIDIs) and lay down the new ex-ante regulatory framework that SIDIs will have to comply with under the Digital Competition Act.

This development coincides with increased scrutiny of digital markets by the Competition Commission of India (CCI). The CCI has recently penalized Meta for WhatsApp's "take it or leave it" privacy policy update and Google for abusing its dominant position in two separate digital market cases. Ongoing investigations involving other major digital players, including Apple, Amazon, and Flipkart, are expected to conclude in 2025. The Need for the Digital Competition Act The need for a dedicated digital competition law in India stems from the unique characteristics of digital markets. Network effects, data-driven business models, and the "winner-takes-all" dynamic often lead to the rapid emergence of dominant players.

These platforms, leveraging their vast user base and access to data, can engage in practices that stifle competition, such as self-preferencing, predatory pricing, and exclusive agreements. Existing competition laws, designed for traditional markets, often prove inadequate in addressing these novel challenges. The sheer scale and speed of digital markets, coupled with the intangible nature of digital assets, require a more nuanced and proactive regulatory approach. In recent years, digital platforms have become central to everyday life. Companies like Google, Amazon, Facebook, and Apple dominate not only their respective sectors but also the overall digital landscape. This concentration of power has led to several issues, including:

1 Reduced Consumer Choice

Dominant platforms often stifle competition by acquiring or undermining emerging rivals, leading to fewer choices for consumers. In the absence of competition, these platforms can dictate pricing, control access to information, and shape user experiences without accountability.

2 Exploitation of Data

Companies controlling vast amounts of user data have the ability to manipulate and exploit consumer behavior. Data-driven business models often place consumers at a disadvantage, as their personal information is leveraged for profit without clear consent or transparency.

3 Barriers to Entry for New Entrants

Startups and smaller firms struggle to compete with the scale and resources of digital giants. The lack of market access, visibility, and resources to challenge dominant players hampers innovation and market diversity.

4 Anti-Competitive Practices

Major platforms can engage in practices such as price manipulation, predatory pricing, or exclusive partnerships, which stifle fair competition and ultimately harm the consumer. Key Features of the Digital Competition Act The Digital Competition Act is designed to address these challenges through several key provisions. • Designation of SIDIs: The Act will empower the Competition Commission of India (CCI) to designate digital platforms as SIDIs based on pre-defined criteria. These criteria are likely to include factors such as the number of active users, revenue, market capitalization, and global reach. The focus is on identifying platforms that wield significant influence over the digital ecosystem and can potentially distort competition.

• Ex-Ante Obligations: Unlike traditional competition law, which relies on ex-post interventions after anti-competitive conduct has occurred, the Digital Competition Act will impose ex-ante obligations on SIDIs. These obligations aim to prevent anticompetitive behavior before it occurs, promoting a more proactive and preventative approach to regulation. • Prohibited Conduct: SIDIs will be prohibited from engaging in certain types of conduct that are deemed anti-competitive. These could include: o Self-preferencing: Giving preferential treatment to their own products or services on their platform. o Tying and bundling: Conditioning access to one service on the purchase of another. o Predatory pricing: Setting prices below cost to eliminate competitors. o Exclusive agreements: Preventing businesses from using competing platforms.

o Data misuse: Using user data to unfairly advantage their own businesses. • Transparency and Non-Discrimination: SIDIs will likely be required to be transparent about their algorithms, data collection practices, and platform rules. They will also be obligated to treat all users and businesses on their platform in a nondiscriminatory manner. • Enforcement and Remedies: The CCI will be the primary enforcement agency for the Digital Competition Act. It will have the power to investigate alleged violations, impose penalties, and order corrective actions. Potential Challenges to the Digital Competition Act While the Digital Competition Act holds immense promise, its implementation will face several challenges: • Defining SIDIs: Establishing clear and objective criteria for designating SIDIs will be crucial.

The criteria must be robust enough to capture genuinely dominant platforms while avoiding unnecessary burdens on smaller players. • Enforcement Challenges: The CCI will need to develop the expertise and resources to effectively monitor SIDIs and enforce the provisions of the Act. This will require a deep understanding of digital markets and the ability to analyze complex technical and economic data. • Balancing Innovation and Regulation: The Act must strike a delicate balance between promoting competition and avoiding excessive regulation that could stifle innovation. The regulations must be designed to address genuine anti-competitive concerns without unduly hindering the growth and dynamism of the digital economy.

• International Harmonization: As digital markets are global in nature, it is important to ensure that India's digital competition framework is aligned with international best practices. Collaboration with other jurisdictions will be crucial to address cross-border anti-competitive conduct.

Conclusion

The proposed Digital Competition Act represents a significant step towards creating a more competitive and equitable digital ecosystem in India. By addressing the unique challenges posed by the dominance of digital platforms, the Act has the potential to unlock further innovation, enhance consumer choice, and promote sustainable growth in the digital economy. While the implementation of the Act will undoubtedly face challenges, its enactment will mark a new era for digital competition in India, paving the way for a more balanced and dynamic digital marketplace. The success of this legislation will depend on careful drafting, effective enforcement, and ongoing dialogue between regulators, businesses, and other stakeholders.

The future of digital competition in India, and indeed globally, hinges on the ability to create a regulatory framework that fosters innovation while safeguarding against anti-competitive practices. India's proposed Digital Competition Act is part of a global wave of regulatory initiatives aimed at addressing the challenges posed by the dominance of digital platforms. The European Union's Digital Markets Act (DMA), which also focuses on ex-ante regulation of "gatekeepers," is a notable example. Other jurisdictions, including the United States, the United Kingdom, and Australia, are also exploring various regulatory options. India's approach, with its emphasis on ex-ante obligations and the designation of SIDIs, will be closely watched by other countries as they grapple with the complexities of digital regulation.

However, the proposed Digital Competition Act, focusing on large tech companies, has drawn strong criticism from the industry, which argues it is overly broad and burdensome. Stakeholders have questioned the appropriateness of adopting an EU-style ex-ante regulatory framework without considering the distinct characteristics of the Indian market, fearing it could stifle digital innovation. Consequently, there's widespread anticipation that the Act, in its current form, will not be passed. While its introduction to Parliament is expected in 2025, the final shape and form of the legislation remain uncertain.