India’s Digital Competition Bill - Towards Proactive Regulation Of Big Tech
Author: LawSphereX
Category: Technology, Cyber & Privacy
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INDIA’S DIGITAL COMPETITION BILL: TOWARDS
PROACTIVE REGULATION OF BIG TECH
Vyshnavi Epari, Lovely Professional University
INTRODUCTION:
India is on the verge of a regulatory change in the digital economy. The Digital Competition Bill 2024 (Bill) is a proposed legislation which intends to curb the increasing market power, and anti-competitive conducts of the large Technology firms, by shifting paradigm from reactive enforcement model to a preventive model. This change from ex-post to ex-ante regulation is a major evolution in the Indian competition law that is suitable for the intricacies of digital markets. WHY EX-ANTE REGULATION?
The digital markets are significantly different from the traditional market. They are marked by network effects, data-based dominance, and incredibly high entry barriers that enable a set of big players to establish their positions very quickly. Under the Competition Act 2002 (Act), ex-post regulation of anti-competitive conduct is currently being made by the Competition Commission of India 2002 (CCI) ie. intervening after harm has occurred. But in the spaces of supercharged digitality, such damage might be already irreparable once something is done about it. As such, having acknowledged these challenges, the Standing Committee on Finance, while issuing its 2023 report, has noted a “growing imbalance in bargaining power between digital platforms and market participants” and has recommended adopting an ex-ante approach for regulation of “systemically significant digital intermediaries”1.
GLOBAL CONTEXT: COMPARATIVE DEVELOPMENTS:
The Indian action falls in line with the latest regulatory activity in other jurisdictions:
1 NASSCOM, Representation on Digital Competition Bill, April 2024.
The European Union Digital Markets Act 2022 (DMA) classifies large digital firms as “gatekeepers” and introduces a list of obligations that these firms must meet to curb anticompetitive behaviour2. • UK has introduced the Digital Markets, Competition and Consumers Bill 2023 (UK Bill) where the Digital Markets Unit has been given the mandate it to construct industry-specific codes of conduct for firms that have “strategic market status”3. Such models represent a consensus of the world. that the responsive nature of conventional competition laws is unfit for regulating the digital markets.
FEATURES OF THE DIGITAL COMPETITION BILL 2024:
(Systemically Significant Digital Enterprises) (SSDEs) Under the Bill, there is a proposal to declare some digital firms to be SSDEs based on quantitative and qualitative thresholds such as: • Annual global turnover exceeding ₹4,000 crore. • 10 million count of end-users or 10000 business users in India4. After designation, SSDEs would be under prior obligations.
CONDUCT OBLIGATIONS:
The Digital Competition Bill 2024 (Bill) has conduct obligations as one of its main aspects, which are placed on designated (Systemically Significant Digital Enterprises) (SSDEs). These duties are aimed at pre-emptive restraining the anti-competitive behaviors in the digital markets, which aims at advocating for fairness, transparency and autonomy of users. The conduct obligations have been designed to control certain behaviours which are ordinarily prone to accompany the abuse of dominance by dominant digital platforms. Based on global 2 European Commission, Digital Markets Act (DMA), 2022, available at https://ec.europa.eu/competitionpolicy/sectors/digital/dma_en (last visited 15 May 2025).
3 UK Parliament, Digital Markets, Competition and Consumers Bill, Bill 294 of 2022–23, available at
https://bills.parliament.uk/bills/3453 (last visited 15 May 2025). 4 Committee on Digital Competition Law, Report and Draft Bill, Ministry of Corporate Affairs, March 2024.
precedents like the Digital Markets Act 2022,(DMA) of the European Union, the Bill finetunes such principles to Indian contexts of its digital economy. Key Conduct Obligations: • Prohibition on Self-Preferencing: SSDEs are compelled to ensure that they don’t discriminate against their own products or services as well as those provided by other business people of third parties that transact their business on their platforms. This is an attempt to ensure that there is a level playing field and not be discriminative. • Fair and Non-Discriminatory Access: SSDEs have to offer core services of the platform on equal terms to all the business users. They are unable to discriminate entities or impute opaque conditions of access. • Restriction on abuse of Non- public data: SSDEs are restricted from exploiting business users’ external data, which is not public, to their advantage.
This responsibility addresses the issues of asymmetric information and taking undue advantage of data gotten from dependent enterprises. • Data Portability and Interoperability: The Bill requires that SSDEs promote data portability-the ability to freely move data from one platform to another- and interoperability to increase competition and decrease user lock-ins. • Restrictions on Tying and Bundling: SSDEs are not allowed to make use of one service conditional on compulsory purchase or use of another without a good objectively justifiable reason. This requirement relieves oppressive practices of bundling. These responsibilities adopt a preventive character, limiting the necessity for long, ex-post searches. They would endow the proposed (Digital Competition Competition) (DCC) with prompt enforcement powers against SSDEs who would be violating their obligations. A strict
enforcement regime may be signalled through violations attracting penalties not exceeding 10% of global turnover. The conduct requirements established by the Bill represent a conscious change of direction in Indian competition jurisprudence. By incorporating transparent ex-ante obligations onto powerful digital firms, the Bill seeks to guarantee fair access, consumer choice and innovation, healthy competition in markets.
MERITS OF THE EX-ANTE REGIME:
The ex-ante regime – a gauranteed preventive regulatory behavior – has been attracting a lot of attention in the international community, particularly the regulation of digital markets. Having contrast with ex-post mechanisms which intervene after anti-competitive practices, the ex-ante framework is established to deter such conducts pro-actively. It is especially relevant for digital economy, the dynamism of which is very high.
1. Timely Intervention in Fast-Moving Markets:
It is possible for digital platforms to embed its competitive advantage quickly, thanks to network effects, advantages in data, and economies of scale. Once it takes for the old mechanisms of enforcement to take place, the market harm would likely have become irreversible. Ex ante rules ensure that regulators can intervene before the harm occurs, and ensure that competition is sustained better.
2. Guarding of market entry and innovation.
Startups and lesser digital companies find it hard fighting against the dominant platforms using self-preferencing, tying or predatory pricing. Ex-ante obligations like platform neutrality and fair access generate a level playing field, innovation, investment and entry into the market.
3. Consumer Welfare Enhancement:
Advance duties placed on the helmsman companies, for example, data portability, interoperability, and non-discriminative treatment guarantees consumers free choice, data control, and reasonable pricing. These elements input directly in consumer welfare in digital ecosystems.
4. Regulatory Certainty:
Ex-ante frameworks establish definite conduct laxity in advance. This check on digital enterprises regarding acceptable behaviour helps cut down the level of uncertainty, reducing the risks and penalties that are retroactive in nature and aspiring to create compliance by providing clarity instead of going to court.
5. Global Regulatory Alignment:
The use of an Ex Ante model will align India towards international best practices such as Europe’s Digital Markets Act 2022 and the UK’s Digital Markets, Competition and Consumers Bill 2023. This harmonization makes it easy for cross-border digital trade to take place and promotes regulatory cooperation.
CONCERNS AND CRITIQUES:
Although Digital Competition Bill 2024 (Bill) is an important step towards guaranteeing fair digital market competition, it has also raised a variety of concerns and criticism from legal scholars, industry players, and policy analysts. These issues highlight the importance of cautious calibration and implementation of the suggested framework.
1. Risk of Over-Regulation:
A major issue is that the Bill’s sweeping regulatory authority would kill innovation and
disincentive investment, particularly for startups and midsized firms. NASSCOM alerts that stringent ex -ante rules may weigh down firms that lack substantial market power thus hampering them from growing and innovating.5
2. Need for Institutional Capacity:
The Bill defines Systemically Significant Digital Enterprises (SSDEs) by ambiguous definitions such as turnover and user base, without clear instructions. This will result in overrepresentation of firms which do not have any real gatekeeping capability. Individuals with
5 NASSCOM, Representation on Digital Competition Bill, April 2024.
interest in pending matters, known as stakeholders, call for more specific, sector-based thresholds and the regular revision of these thresholds to avoid arbitrary classifications.
3. Coordination with Existing Laws:
India already has several for digital platforms, the Competition Commission of India 2002 (CCI), TRAI, RBI and soon to come is the Data Protection Board under the Digital Personal Data Protection Act 2023. The introduction of a new Digital Competition Commission (DCC) risk having overlaps and confusions without roles’ demarcations.6
CONCLUSION:
The Digital Competition Bill 2024 is a much-needed and timely step in updating India’s competition law for the realities of the digital economy. By adopting an ex-ante approach, the Bill aims to create a more level playing field where innovation and fair competition can thrive. However, for this shift to truly benefit both businesses and consumers, it must be rolled out with transparency, meaningful stakeholder consultation, and strong institutional support. The goal should be clear: to encourage healthy competition without stifling the innovation that drives India’s digital growth. 6 B. Srikrishna, “Overlap of Digital Laws in India: A Regulatory Maze,” (2024) 46(2) Indian Journal of Law and Technology 65.