The Impact Of An Ex-Ante Regulatory Framework On India’s Draft Digital Competition Bill - The Need Of The Hour
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THE IMPACT OF AN EX-ANTE REGULATORY
FRAMEWORK ON INDIA’S DRAFT DIGITAL
COMPETITION BILL: THE NEED OF THE HOUR
Akshaya Gopalakrishnan, CHRIST (Deemed to be University), School of Law, Delhi NCR, India
ORCID ID: 0009-0001-6881-3724
ABSTRACT
In this paper, we look into the need and the implications of the ex-ante framework of regulation concerning the new Draft Digital Competition Bill of India. In the ex-ante framework of regulation, actions are taken before an issue arises. On the other hand, in the ex-post framework of regulation, the action is taken after a problem has already occurred. The Competition Act of 2002 which was traditionally the Competition Law of India followed an expost approach, unlike the upcoming Digital Competition Laws of India. This bill has drawn inspiration mainly from the Digital Markets Act of the European Union. However, this shift from addressing a problem after it has taken place to before it manifests comes with its own set of complexities as it may stifle innovation and pose difficulty in enforcement.
Through doctrinal analysis, this paper will explore the benefits and drawbacks of this regulatory approach and provide a comparative view of the implications of the same in Europe. Further, this paper shall discuss if ex-ante and ex-post frameworks could function effectively and parallelly in India’s evolving digital landscape. Keywords: Ex-ante, Ex-post, Competition law, Regulatory framework, Digital age
Introduction The fast-paced growth of the digital economy has transformed global markets, driving innovation, economic development and consumer convenience. This, however also came with new regulatory challenges. Traditional regulatory mechanisms often fall short of addressing the issues unique to digital markets. In a world where an imbalance between technological advancements and legal frameworks exists, large digital enterprises with disproportionate market power raise concerns about consumer welfare, market fairness, and innovation. There has been an increasing need for a legal framework that can anticipate rather than merely react to anti-competitive conduct. Against this backdrop, India’s move towards a regulatory regime that is proactive marks a significant shift in the country’s competition law regime.
The Competition Act 2002 Competition Law also known as Antitrust Law falls within the area of law and economics that aims to regulate and sustain the competition in a market and prevent unfair practices1. It does so by promoting efficient allocation of resources2, by curbing monopolies and by ensuring fair pricing, thereby enhancing consumer choices and affordability. 3 Competition Laws exist in most countries across the globe and each of the countries has a regulatory body similar to the Competition Commission of India (CCI). The CCI was established in the year 2003 as per the Competition Act of 2002. The regulation of India’s markets and its move to prevent anticompetitive practices however had started before the establishment of CCI. The Monopolies and Restrictive Trade Practices Act 1969, worked towards regulating monopolies by preventing the concentration of economic power.
However, in the year 1991, India saw the advent of market-oriented economic policies. The concepts of liberalisation, privatisation and globalisation called for a law that enhanced competition while at the same time reducing the control a notch. The key idea of liberalism is the creation and protection of competitive markets. Antitrust laws are an essential feature of liberalism4. Privatisation improves efficiency5 while globalisation is advantageous in promoting competition and widening consumer choice. It can be associated with anti-competitive behaviour on an international
1 David J Gerber, Law and Competition in Twentieth Century Europe: Protecting Prometheus (1998).
2 Massimo Motta, Competition Policy: Theory and Practice (2004).
3 Richard Whish & David Bailey, Competition Law (2021).
4 Lazar Radic & Geoffrey A Manne, Competition and Competition Law in the Classical Liberal Tradition, Available at SSRN 4927814 (2024).
5 Tom Sharpe, Privatisation, Regulation and Competition, 5 Fiscal Studies 47 (1984).
scale. In such cases, governments are faced with the challenge of dealing with behaviour taking place in other countries, which can affect their economies6. This resulted in the Monopolies and Restrictive Trades Practice Act being repealed and the introduction of the Competition Act, of 2002. The Competition Act adopts an ex-post enforcement approach, wherein intervention happens after the occurrence of anti-competitive behaviour. While this framework works efficiently in the case of traditional markets, both the adjudicatory process and the reactive nature are inadequate in addressing challenges to the digital economy7. Consequently, India’s Competition Law enforcement has struggled to address structural competition concerns in digital markets.
The Evolution of the Draft Digital Competition Bill Technological advancements and the digitalisation of markets globally have prompted the need for a competition law that is better adapted to remedy the issues arising from such a dynamic environment. The rising concerns about data privacy, regulation of cross-border digital services and the inadequacy of ex-post mechanisms to tackle anti-competitive practices in digital markets have also highlighted the need for the same8. Under such conditions, the Ministry of Corporate Affairs constituted the Committee on Digital Competition Law (CDCL) to examine the need for a separate legislation9. In its report, the CDCL recognised the unique features of a digital market and advocated for a proactive regulatory framework.
This led to the formulation of the Draft Digital Competition Bill, 2024, which aimed to supplement the existing Competition Act by specifically targeting the digital sector. The European Union’s Digital Markets Act The European Union's Digital Markets Act (DMA), enacted in 2022, adopts an ex-ante framework to regulate digital markets to prevent anti-competitive practices before they arise by imposing pre-emptive obligations on gatekeepers, i. e. large platforms with significant 6 Allan Fels, Competition and Globalisation, in Trade and Cooperation with the European Union in the New Millenium 15 (2002). 7 Patrice Bougette, Oliver Budzinski & Frédéric Marty, Ex-Ante versus Ex-Post in Competition Law Enforcement: Blurred Boundaries and Economic Rationale, International Review of Law and Economics 106264 (2025).
8 Id.
9 Ministry of Corporate Affairs Government of India, Report of the Committee on Digital Competition Law, 236 (2024).
market power10. India’s regulatory approach under DDCB draws significant inspiration from the European Union’s Digital Markets Act. The Digital Markets Act has however faced criticism for its potential to stifle innovation, impose heavy compliance costs and overregulate dynamic markets11. Despite such criticisms, DMA is considered a necessary response to the market power imbalance, serving as a model for India’s Digital Data Competition Bill (DDCB). It has been instrumental in providing a template for India’s DDCB, by defining core platform services, identifying gatekeepers and imposing pre-emptive obligations12. Ex-Ante Regulatory Framework The ex-ante framework of regulation, though having its own set of advantages and disadvantages is unusual in the Indian scenario and is deemed as a key innovation of the DDCB.
It helps mitigate anti-competitive practices before they fully emerge, supporting a proactive and efficient regulatory landscape. In a communication from the European Commission to the European Parliament and other parties13, it was noted that the ex-ante framework of regulation of digital markets will make sure that larger digital platforms are regulated on the principle of foresight, such that the market stays fair for other innovators, businesses, and new platforms. The CDCL’s 2024 Report argues that digital markets exhibit unique characteristics such as strong network effects, data-driven advantages, economies of scale and market concentration, which necessitate pre-emptive regulation14. The DDCB focuses on Systematically Significant Digital Enterprises (SSDEs) which is determined by criteria such as turnover and market capitalisation.
SSDEs are subject to specific obligations such as prohibitions on misuse of public data, self-preferencing, unfair contractual terms etc. While the ex-ante framework promises to enhance market contestability and protect consumer welfare it raises concerns 10 Zlatina Georgieva, The Digital Markets Act Proposal of the European Commission: Ex-Ante Regulation, Infused with Competition Principles, 2021 European Papers-A Journal on Law and Integration 25 (2021). 11 Gheorghe-Sorin Lodoaba, An Overview on the Scope of the Digital Markets Act: Fair Practices versus Ex-Ante Competition Law, 8 U. Bologna L. Rev. 43 (2023). 12 Shilpa Das, Ex-Ante Regulation: An Evolving Need in Digital Markets, Competition Commission of India Journal on Competition Law and Policy 55 (2024).
13 European Commission, Communication From the Commission To The European Parliament, The Council, The European Economic And Social Committee And The Committee Of The Regions Shaping Europe’s Digital Future, (2020), https://eur-lex. europa. eu/legal-content/EN/TXT/? uri=celex:52020DC0067 (last visited Jan 2, 2025).
14 supra note 9.
about regulatory overreach, compliance costs and potential stifling of innovation. Insights from India’s Committee on Digital Competition Law The 2024 report by the Committee on Digital Competition Law provides critical insights into the structural challenges of regulating digital markets. It identifies how the ex-post enforcement mechanisms under the Competition Act of 2002 are inadequate to address the structural competition concerns arising in digital markets15. The committee’s Report emphasises the importance of a balanced regulatory approach that addresses market power without unduly burdening innovation or market participants. Further, it recognises the dynamic nature of digital markets and underscores the need for periodic review and stakeholder consultation to ensure regulatory framework remains relevant and effective.
About the Paper This paper aims to explore the necessity and effectiveness of India’s shift towards an ex-ante regulatory framework for digital markets, embodied in the Draft Digital Competition Bill,
2024. It explores the structural peculiarities of digital markets that necessitate this shift,
analyses the limitations of the existing ex-post framework, and evaluates the potential benefits and challenges of the DDCB. Further, this paper draws comparative insights from the European Union’s DMA to assess if this method of regulation is suitable to the Indian context. By situating India’s regulatory reforms within the broader global discourse on digital competition, this paper aims to contribute to the evolving understanding of market regulation in the digital age and offer recommendations for ensuring fair competition without stifling innovation. Statement of Problem The fast-paced advancements in technology have transformed the way markets work globally. Digital markets, unlike conventional industries, exhibit characteristics such as network effects, data-driven market power, and high entry barriers which lead to the emergence of dominant platforms16.
These peculiarities posed a problem for regulatory bodies whose laws followed an
15 Id.
16 Kuldip Singh et al., Balancing Different Forms of Competition Regulation in the Digital Economy (2022).
ex-post regulatory approach and were inadequate to deal with the complexities of the digital market. In India, the existing regulation includes The Competition Act, of 2002, which operates on a reactive basis, that is it intervenes only after anti-competitive conduct has occurred17. However, in a scenario where dominance predates regulatory action, this approach is ineffective. Such limitations are particularly evident when cases involving self-preferencing, anti-steering practices, discriminatory data access and exclusionary conduct by large data enterprises surface. These practices harm consumer welfare, innovation and market contestability in addition to distorting competition18. Considering these challenges, a proactive regulatory framework is increasingly being considered essential.
The Draft Digital Competition Bill, 2024 proposes an ex-ante regulatory framework that prevents anti-competitive conduct before it materialises. This includes imposing pre-defined obligations on Systematically Significant Digital Enterprises to promote fair competition. The shift from ex-post to ex-ante regulation is a crucial point in India’s Competition Law landscape as it also aligns with global regulatory trends like the European Union’s Digital Markets Act, 2022. However, the adoption of such an ex-ante approach has also sparked debates on whether the restrictions on self-preferencing, data monopolization and anti-steering can prevent market distortions without imposing excessive compliance costs, deter foreign investment, and stifle innovation, particularly for emerging digital firms 19.
To ensure that competition law does not hinder economic growth there must exist a balance between regulatory enforcement and market efficiency20. The new legislation also functions under the Competition Commission of India which is now faced with concerns about institutional preparedness, regulatory capacity and enforcement 17 Aditya Bhattacharjea, Of Omissions and Commissions: India’s Competition Laws, Economic and Political Weekly 31 (2010). 18 Adya Pandey & Vatsla Sharma, The Formalistic Approach to Competition Law: A Critical Examination Of Its Benefits And Limitations, 5 DME Journal of Law 67 (2024).
19 Hosuk Lee-Makiyama & B Narayanan Gopalakrishnan, Economic Costs of Ex Ante Regulations, ECIPE
occasional paper 07 (2020). 20 Francesco Ducci, Ex Ante Regulation and Antitrust Remedies for Digital Markets, 67 CAN. BUS. LJ 65 (2023).
feasibility. Hence the effectiveness of DDCB largely depends on whether the CCI can effectively implement legislation with an ex-ante framework of regulation21. The DDCB has drawn inspiration from the European Union’s DMA, which has prompted a debate on the suitability of such a regulatory model in India’s Digital Economy. India being one of the most evolving nations in terms of technological development requires a contextspecific regulatory approach. A potential alternative could be a model that provides more regulatory flexibility while maintaining market dynamism. Another underexplored dimension is the role of behavioural economics in competition law. Integrating behavioural insights into digital competition regulation could result in the creation of a more adaptive and market-responsive framework.
Thus, the core research problem revolves around evaluating the effectiveness and adaptability of India’s shift to ex-ante regulation under the DDCB. This paper will assess whether the proposed framework can curb anti-competitive practices, enhance regulatory efficiency and foster continued innovation in a manner that suits India’s evolving digital landscape. Research Objective This paper aims to critically analyse the necessity and effectiveness of ex-ante regulation in India’s digital markets in the Draft Digital Competition Bill (DDCB) 2024 by: • Examining the rationale for ex-ante regulation and why it was chosen over the conventional ex-post approach. • Evaluating how effective the Digital Markets Act (DMA) of the European Union is and what India can adopt from the same. • Assessing how preventive measures can coexist with technological advancement striking a balance.
• Analysing if both frameworks can function parallelly without regulatory overlap. 21 Anadi Tewari, A Critical Evaluation of India’s Proposed Digital Competition Act, Competition Commission of India Journal on Competition Law and Policy 79 (2024).
Examining if there is a possibility of incorporating elements of behavioural economics in the ex-ante framework of regulation. With India’s shift towards digital competition regulation being a significant development, this research aims to contribute towards the global discourse on how proactive competition law can create a conducive environment for innovation. Literature Review This literature review aims to give an insight into the competition laws of India and the shift in regulatory framework with the change in the market landscape. This review seeks to explore academic journals and articles to understand the effectiveness and challenges of ex-ante frameworks.
India’s Draft Digital Competition Bill draws inspiration from the Digital Markets Act of the European Union and by examining studies and identifying research gaps, this literature review will analyse how regulatory shifts may impact the digital economy. Submission to the India Ministry of Corporate Affairs on the Draft Digital Competition Bill Summary The Dynamic Competition Initiative (DCI) analysed the Draft Digital Competition Bill (DDCB) in comparison to the EU’s Digital Markets Act (DMA) with imposing obligations on Systematically Significant Digtial Enterprises (SSDEs) to prevent anti-competitive practices including self-preferencing and data misuse22. The DDCB therefore fosters fairness and transparency. Research Gap The paper highlights the lack of sufficient empirical data on the digital market of India.
There is emphasis on bottleneck markets and monopoly rents but there is limited data to support solution-making in the Draft Digital Competition Bill in turn resulting in relying on the findings and proceedings of the European Union’s Digital Markets Act.
22 Id.
The Ten Principles of Ex Ante Competition Regulation Summary This OECD-based study outlines ten principles for effective ex-ante regulation, including costbenefit justification and regulatory clarity23. It argues how structured ex-ante rules can mitigate market distortions while promoting continued innovation. Research Gap The study does not examine sufficiently the risks of regulatory failure or over-regulation in digital markets. Additionally, further evidence evaluating the efficiency of the guiding principles is needed to check on the enforcement of such principles. Emerging Trends in Competition Law and Economics in India: Insights and Implications Summary This study mentioned above summarises the evolving competition policies, including IPR, ecommerce regulations and merger controls24. It highlights their role in boosting foreign investment.
It also discusses the impact of the COVID-19 Pandemic on competition enforcement. Research Gap The study by Jain and Kumar has a limited emphasis on how policymakers must address equally the promotion of competition and economic analysis. It overlooks the burden of compliance on businesses due to regulations. There is also limited attention to the need for a balance between a proper enforcement mechanism and economic development. 23 John Taladay & Paul Lugard, The Ten Principles of Ex Ante Competition Regulation, CPI Columns, OECD, November (2022). 24 Anuradha Jain & Narender Kumar, Emerging Trends in Competition Law and Economics in India: Insights and Implications, CPJ LAW JOURNAL 123.
Competition In Digital Markets: An Indian Perspective Summary This paper25 examines the regulation of digital markets by the existing competition law. It highlights that the already existent Competition Act of India fairly regulates the current anticompetitive practices, however, it also discusses the importance of an ex-ante regulatory framework to complement the same. The authors examine different antitrust cases in the digital markets which involve big tech and underscore the importance of damage quantification. Research Gap The above-mentioned paper does not focus on how the regulatory capacity of CCI can be improved through different approaches. It also does not emphasise how ex-ante regulations can be implemented effectively. The Indian Competition Law Experience– Its History and Its (Digital) Future Summary The research article by Gouri G.
and Pandya K26 explores the need for digital adaptation of the Competition Act of India considering the shift in the market economy in India. It talks about the transition of the Indian market from state control to market regulation, and the end of the License Raj system to a pro-market policy. The Competition Act, of 2002, the Competition Commission of India (CCI), and the Competition Appellate Tribunal (COMPAT) were established to address the demands of a modern economy meticulously. The change in the market landscape prompted the CCI to evaluate the digital platforms and the need for a competition law for the future. 25 Jain, S. , & Singh, V. (2024). Competition in Digital Markets: An Indian Perspective. Available at SSRN 4863926. 26 Gouri, G. , & Pandya, K. (2020). The Indian competition law experience–its history and its (digital) future. Indian Law Review, 4(3), 276-300.
Research Gap This article does not broadly deal with the suggested amendments to the Competition Act such as the amendments to cater to the changing digital markets or the Draft Digital Competition Bill. Furthermore, the paper does not delve into the need for the protection of personal data with the same or more importance than that of monetary protection. Sector-Specific Ex Ante Regulation in Digital Markets – A Complement or Substitute to Antitrust Enforcement? Summary This article explores the sector-specific framework in digital markets by focusing on what the Digital Markets Act of the European Union seeks to complement27. Sector-specific regulations and antitrust laws are supposed to complement each other with the former being less intrusive in intervention. The paper argues that DMA’s ex-ante interventions can prevent market failures without antitrust mechanisms.
Research Gap The gap in this paper28 includes a lack of sufficient evidence on the interaction between antitrust laws and the ex-ante regulations. The applicability of Sector-specific regulation on non-EU nations is also discussed. Benefits and Limitations of a Behaviourally Informed Regulatory Framework for Digital Markets Summary A behaviouralist approach in Competition Law has been a topic of conflicted interests to date.
This paper29 seeks to explore behavioural exploitation i.e. relying on an individual’s biases to obtain a desired outcome. The paper also explores how the shift in the market has resulted in 27 Daniel Pettersson, Sector-Specific Ex Ante Regulation in Digital Markets-A Complement or Substitute to Antitrust Enforcement?, 4 Europarättslig tidskrift (2022). 28 Pettersson, D. (2022). Sector-Specific Ex Ante Regulation in Digital Markets-A Complement or Substitute to Antitrust Enforcement?. Europarättslig tidskrift, 4. 29 Jakab, M. (2022). Benefits and Limitations of a Behaviourally Informed Regulatory Framework for Digital Markets. Charles University in Prague Faculty of Law Research Paper No, 3(3).
difficulties in explaining behavioural exploitation. While the ex-ante perspective addresses the problem before the actual market failure, it also comes with uncertainties. Research Gap The gap identified in this paper is the limitation in understanding the effectiveness of the DMA in the market economy keeping apart the behavioural economics perspective. It thereby shows the need for further research, especially when a comparison is made with the legislation of another country. Conclusions Drawn from the Literature Review The complexity of digital markets has posed a challenge to the regulatory framework which were earlier used for traditional markets. This has led to countries looking into alternative approaches such as the ex-ante framework in the Draft Digital Competition Bill of India.
This literature review examined discussions about the DDCB and the ex-ante regulatory framework while also comparing it with the international framework to assess effectiveness. This analysis focused on: (1) the effectiveness of ex-ante versus ex-post regulation, (2) the application of economic principles within competition frameworks, (3) the expanding regulatory role of the Competition Commission of India (CCI), and (4) the relevance of behavioural economics in shaping regulation for digital competition. The findings reveal a critical gap in research in the Indian Context as studies hugely rely on European Models like the Digital Markets Act (DMA). While ex-ante regulation aims to curb unfair practices like self-preferencing and data monopolisation, there still exists ongoing concerns about overregulation, compliance burdens and innovation constraints.
Additionally, principles of regulatory efficiency as laid down by the OECD require further adaptation to India’s digital economy. Furthermore, research into institutional strategies to promote and strengthen enforcement is required to gain a better understanding of the underexplored regulatory capacity of the CCI. Although behavioural insights offer promising solutions for market fairness and consumer protection, their applicability in competition law requires further research. This review underscores the need for an ex-ante regulatory framework for India that is contextualised and moves beyond DMA-based precedents thereby being more India-specific.
Further research should focus on ensuring that India’s Digital Competition Law Framework aligns with its unique economic and technological landscape. Research Methodology Methods Doctrinal Research This paper incorporates the doctrinal methodology. This method is done by adequate reading of the material hence it is also known as the library-based research method30. This methodology is based on secondary sources of information and does not require participants or fieldwork. Since this research is focused on an upcoming legislation this methodology seeks to analyse the effectiveness of the legislation. Exploratory Research Exploratory research is an open-ended form of research method which seeks to answer questions which have not been answered before therefore, it does not result in a conclusion31.
This method of research is usually used when there is limited information about a particular topic from past research. This paper follows an exploratory research method since it investigates a topic with limited information now. The Draft Digital Competition Bill of India is the only competition law ever to have followed the ex-ante framework of regulation in India having drawn inspiration from a foreign legislation effectiveness of which is currently being evaluated therefore this leaves the scope for further research into the unknowns of the topic. Explanatory Research Explanatory Research helps us to understand and establish a relationship, between the causal factors of an event. 32. That is to understand what are the underlying factors which led to a certain event or phenomenon.
In this scenario, it will help to understand the events that led to the adoption of the ex-ante framework for the first time in India. This type of research uses a 30 Gaurav Shukla, Doctrinal Legal Research: A Library-Based Research, in Social Research Methodology and Publishing Results: A Guide to Non-Native English Speakers 226 (2023). 31 Richard Swedberg, Exploratory Research, 2 The production of knowledge: Enhancing progress in social science
17 (2020).
32 Kristin L Sainani, Explanatory versus Predictive Modeling, 6 PM&R 841 (2014).
literature review as one of the methods which will be done extensively in this research paper. This method gives clarity and fills the gaps in the previous studies or literature that will be used for the literature review. Sources of Reference This research will explore the existing and upcoming legislation and policies about competition law both traditional and digital that is The Competition Act, 2002 and The Draft Digital Competition Bill of India, 2024. It will also delve into the Digital Markets Act of the European Union. This will be supplemented with journal articles and commentaries about the bill. Academic writings such as those mentioned above give a needful base for research to build on by addressing the gaps highlighted through new research.
The Impact reports of the efficiency of all the legislations, government reports and summaries of the Digital Markets Act which will be examined in this paper will in turn contribute as sources for this research. Comparative Analysis: The EU’s Digital Markets Act (DMA) and India’s Digital Competition Bill The Digital Markets Act of the European Union and the Draft Digital Competition Bill of India represent a global shift toward an ex-ante framework of regulation. While both these regulations target large digital platforms primarily by way of pre-emptive obligations, there exist divergences between them when it comes to legal design and enforcement mechanisms Method of Regulation The DMA illustrates a rules-based regime by mandating some provisions for all designated gatekeepers. (Articles 5-7)33.
Although this approach prioritises legal certainty, it has drawn criticism for its inflexibility in dynamic digital markets34. Uniform obligations of this Act such as bans on self-preferencing and data combining apply irrespective of sector-specific nuances, potentially imposing disproportionate compliance costs on those platforms that are emerging35.
33 supra note 9.
34 Damien Geradin, Anatomy of a Car Crash: The European Commission’s Decision to Withdraw Its Big Tech Friendly Proposed SEP Regulation, Available at SSRN (2025). 35 Luis Cabral et al., The EU Digital Markets Act: A Report from a Panel of Economic Experts, Cabral, L., Haucap, J., Parker, G., Petropoulos, G., Valletti, T., and Van Alstyne, M., The EU Digital Markets Act, Publications Office of the European Union, Luxembourg (2021).
In contrast, the DCB exemplifies a more principles-based framework, delegating rulemaking to sectoral regulators. This leads to obligations tailored to market realities for Systematically Significant Digital Enterprises (SSDEs) which is different from DMA’s rigid structure. Delegating such rulemaking also preserves innovation to a certain extent as it reduces ex ante burdens thereby mitigating the risk of stifling disruptive business models36. Since the Competition Act would be operative, working parallelly with DMA, the Competition Commission of India retains its ex-post authority. It acts as a regulatory safety net to address any gaps in regulation37. Scope of Application The European Union follows a more centralised Digital Governance by following the horizontal application, which subjects all gatekeepers to identical rules.
This aligns with the broader regulatory trends but has been critiqued for neglecting sectoral variations38. The Draft Digital Competition Bill of India pursues vertical regulation, enabling differential treatment of Core Digital Services based on market dynamics39. Hence this accommodates India’s heterogenous digital economy which exhibits distinct competitive risks. The UK’s experimentation with sector-specific codes under its Digital Markets Unit regime suggests this model may balance market correction with innovation incentives better40. Exemption Mechanisms A critical divergence between the regulations of India and the European Union is the exemption
protocols. The DMA permits such exemptions only for public health, and security emergencies, which shall be further subject to the oversight of the European Commission and transparent justification (Article 1). This model minimises political interference but lacks adaptability to evolving market conditions. On the other hand, Section 38 of The Digital Competition Bill of
36 Natalia Moreno Belloso & Nicolas Petit, The EU Digital Markets Act (DMA): A Competition Hand in a
Regulatory Glove, 48 European law review 391 (2023). 37 Anush Ganesh, Mohit Yadav & Gaurav Pathak, The Indian Draft Digital Competition Bill and Report-A Critical Perspective, Indian Law Review (Forthcoming) (2025). 38 Muhammad Atif Khan & Hira Shabbir, The Digital Literacy and Retail Investing Exploring Market Dynamics, Efficiency, and Stability in the Digital Era: Digital Literacy and Retail Investing Exploring Market Dynamics, Efficiency, and Stability in the Digital Era, Journal of Digital Literacy and Learning (2025). 39 Nirmala Mahaveer Patil, Combating Abuse of Dominance in Digital Markets: Study from the Perspective of EU and India (2023). 40 Jason Furman, Unlocking Digital Competition, Report of the Digital Competition Expert Panel, 150 (2019).
India empowers the Central Government to exempt SSDEs on grounds including sovereign functions. This raises concerns of Regulatory Capture Risks as digital firms may lobby for exemptions, thereby undermining the neutrality of the regime. It may also result in jurisdictional conflicts due to concurrent exemption powers between the CCI and government41. The DMA relies on the European Commission’s established antitrust infrastructure which is further supplemented by the Digital Markets Advisory Committee. However, India’s DCB proposes leveraging the nascent Digital Markets and Data unit, that follows ex-post enforcement42. Challenges and Criticisms of Ex-Ante Regulation in India The proposed shift in regulation under the Digital Competition Bill represents a reorientation of competition policy.
This approach however faces significant challenges which can be addressed by comparative experiences and an analysis of India’s regulatory landscape. Regulatory Overreach and Suppression of Innovation The risk of over-prescription is a threat that is inherent in ex-ante regimes. This results in stifling the very dynamic competition that they seek to preserve43. The categorisation of certain enterprises as Systematically Significant Digital Enterprises (SSDEs) based on static metrics by the proposed Digital Competition Bill of India may inadvertently penalise scaling firms that disrupt incumbents. This phenomenon was observed in the case of European Union when DMA implementation led to the rise of compliance costs of mid-sized platforms by almost 40%.
With the advent of this bill Indian startup ecosystem may face critical challenges such as, limitations on growth strategies with the redemptive constraints on data pooling DCB Clause 19(2)), a measure taken commonly by firms like Flipkart and Ola in their budding stages. An imbalance in the distribution of burdens may also arise due to SSDE designation criteria44. 41 Anuradha Jain & Narender Kumar, Emerging Trends in Competition Law and Economics in India: Insights and Implications, CPJ LAW JOURNAL 123.
42 supra note 9.
43 Khan and Shabbir, supra note 38.
44 Sumanta Bhattacharya & Bhavneet Kaur Sachdev, Regulatory Challenges and Opportunities for Future Fintech and Green Finance, Blockchain’s Transformative Potential of Financial Technology for Sustainable Futures 103 (2024).
Constraints on Institutional Capacity While the Digital Competition Bill of India is a progressive measure and the need of the hour, The Competition Commission of India lacks the specialised resources for ex-ante enforcement. The European Union's Digital Markets Act has over 150 dedicated Digital market experts as technical staff and advanced Algorithmic tools for real-time monitoring. They also emphasise on sectoral expertise by incorporating separate teams per vertical. The Competition Commission of India would face the risk of under-enforcement if the Digital division budget is not increased. This concern was highlighted in India's failed experiment of telecom regulation45.
Jurisdictional Overlaps The Digital Competition Bill works on the concept of regulatory fragmentation and risks creating a regulatory maze where digital platforms face conflicting mandates from multiple authorities. India’s sectoral regulators such as the Telecom Regulatory Authority of India for telecom/ digital services, The Reserve Bank of India for fintech and the Ministry of Electronics and Information Technology for e-commerce already impose rules on data localisation, interoperability and market conduct. The DCB's concurrent jurisdiction could trigger contradictory obligations and sectoral conflicts for instance, RBI's data sovereignty requirements may clash with the DCB's proposed data-sharing mandates46. This bill will create a judicial challenge in the form of Strategic Forum Shopping.
This was witnessed in 2022 in the Amazon-Future Retail case where parallel proceeding occurred before CCI, SEBI and NCLT. Judicial delays also compound the issue. CCI's average 3. 2-year case resolution timeline (Annual Report 2023) renders ex-post interventions ineffective for fastmoving digital harms. Without clear jurisdiction hierarchies and proper addressing of the existing demerits, the Digital Competition Bill of India may replicate the earlier mistakes. The Behavioural Economics Paradox The working of ex-ante regulation involves the assumption, platforms engage in predictable 45 Pankaj Mishra, Netra Pal Singh & Ayesha Farooq, Regulatory Disruptions in the Indian Telecommunication Industry, 21 International Journal of Innovation and Technology Management 2430007 (2024).
46 Bhattacharjea, supra note 17.
anti-competitive practices. Research jn the field of behavioural sciences however highlights risks including Algorithmic collusion emergence where machine learning systems can develop tacit coordination without specific instruction. However, the static prohibitions imposed by the DCB may fail to capture such emergent behaviours47. This was demonstrated by Airbnb and Uber's dynamic pricing algorithms converging independently. OECD studies also reflect that Indian Consumers tolerate short-term anti-competitive practices for perceived convenience. Further, India's SSDEs may exploit regulatory ambiguities and resort to a superficial adherence. This phenomenon was seen in South Korea where ex-ante platform rules led to platforms maintaining technical compliance while developing new dark patterns.
Comparative Lessons and Mitigation At a time when India is stepping towards the implementation of the Digital Competition Bill, global experience offers valuable lessons and insights on ex-ante regulation. The European Union’s DMA demonstrated risk of overregulation where uniform thresholds led to inadvertent capture of mid-sized innovators, This suggests that India should adopt tiered designations which are also sector-specific 48. India could also adapt the model provided by UK’s Digital Markets Unit where fast track adjudications with proper deadlines. These comparisons also further the need for specific mitigations such as a committee to harmonise the overlapping of jurisdictions and promote coordination 49.
OECD’s sandbox framework (2023) based algorithmic audits needs to be mandated and measures that focus on behavioural aspects such as those to counter region specific exploitation. Such contextsensitive adaptations can reduce 20-30% initial failure rate of first-generation ex-ante regimes as highlighted in the OECD report (2023)50. Co-existence of Ex-ante and Ex-post Frameworks and its Viability The new regulatory framework in India’s digital Competition Bill raises questions about 47 Emilio Calvano et al. , Artificial Intelligence, Algorithmic Pricing, and Collusion, 110 American Economic Review 3267 (2020).
48 Geradin, supra note 34.
49 Tewari, supra note 21.
50 Das, supra note 12.
compatibility with existing ex-post frameworks of the Competition Act, of 2002. This section evaluates if such diverging regulations can operate together by looking into global experiments and India’s realities. Complementarity vs. Conflict While ex-ante regulations prevent anti-competitive conduct by SSDEs through preemptive obligation, ex-post means include case-by-case adjudication into abuse of market dominance. The presumed synergy between prevention and correction models breaks down the moment it applies to fast-evolving digital markets, where there exists a fine line between known and novel harms 51. For instance, article 5 of DMA fails to look into those emergent areas which would require ex-post intervention52 The DCB has also resorted to vagueness in many of its provisions.
A middle ground in such situations would be allowing platforms to seek advance rulings on specific practices regarding their probability of violating any regime. Institutional Design for coexistence Comparative analysis revealed three institutional models for management of enforcement systems. The European Union’s Directorate General, The United Kingdom’s Digital Markets Unit and Japan’s specialised digital division. Although, India’s model closely resembles Japan’s approach, it lacks in the behavioural economics aspect and protocols for real-time data sharing between ex-ante and ex-post units. The UK's "concurrency framework" provides valuable lessons, particularly its requirement that all digital market cases be jointly assessed by both units within 30 days53 preventing the forum shopping witnessed in India's telecom sector54.
Insights from Behavioural Economics Behavioural science fundamentally challenges the binary ex-ante/ex-post distinction by demonstrating how consumer harm often emerges from complex interactions between platform
51 Khan and Shabbir, supra note 38.
52 Moreno Belloso and Petit, supra note 36.
53 Julie Bon et al., Recent Developments at the CMA: 2023–24, 65 Review of Industrial Organization 907 (2024). 54 Sushil Kumar Sen, Consumers’ Protection in India in Changing Economic Scenario, 7 Journal of Law and conflicts resolution 9 (2015).
architecture and cognitive biases 55. The DCB's assumption that all dark patterns can be preemptively identified and prohibited conflicts with experimental evidence showing users respond differently to identical designs based on cultural context56. Brazil's regulatory sandbox approach, which tests ex-ante rules against real consumer behaviour before full implementation57 offers a model for India to adapt through its Open Network for Digital Commerce (ONDC) platform. Need for Legislative Clarity The CLRC's (2020) proposed amendments to Section 60 of the Competition Act require also addressing three DCB-specific conflicts: 1) Clear sequencing rules requiring ex-ante exhaustion before ex-post intervention (modeled after UK's Digital Markets Act). Mandatory "cooling-off periods" preventing successive investigations of the same conduct (as per Japanese model.
The EU's experience shows that without such safeguards, hybrid systems incur 23-28% higher compliance costs than pure ex-ante or ex-post regimes58. Component of Behavioural Economics in Future Regulation The integration of behavioural insights although promising comes with unprecedented challenges. Unlike DMA’s rigid rules-based approach which has proven ineffective in certain aspects, India’s principles-based Digital Competition Bill could pioneer a new regulatory paradigm if properly grounded in empirical behavioural science59. Behavioural justifications and implementation challenges Ex-ante interventions in India’s digital markets are justified by three cognitive phenomena default bias, hyperbolic discounting and illusionary scarcity (IIM-B study 2023).
These biases enable platforms to engineer consent through architecture rather than coercion - a harm 55 Miroslav Jakab, Benefits and Limitations of a Behaviourally Informed Regulatory Framework for Digital Markets, 3 Charles University in Prague Faculty of Law Research Paper No (2022).
56 Gaurav Ghosh & Subhashish Gupta, Ex-Ante Regulation in Digital Markets in India: Some Practical
Considerations (2023). 57 Caio Mário S Pereira Neto, Ricardo Ferreira Pastore & Raíssa Paixão, Competition Law Enforcement in Digital Markets: The Brazilian Perspective on Unilateral Conducts, 67 The Antitrust Bulletin 622 (2022). 58 Kolawole Afuwape, Analysing the Ex-Ante Regulations in India’s Digital Competition Bill and Its Effects on Indian Business Interests, 47 World Competition (2024). 59 Agustín Reyna, The Psychology of Privacy—What Can Behavioural Economics Contribute to Competition in Digital Markets?, 8 International Data Privacy Law 240 (2018).
invisible to traditional antitrust frameworks60 India’s hurdles concerning behavioural regulation are unique due to linguistic complexities, low digital literacy in the state and cultural acceptance about users preferring platform guidance over pure personal choice as per61. The RBI's failed 2022 attempt to standardize loan disclosure formats demonstrates how well-intentioned behavioural interventions can misfire without localization62. Policy Recommendations A three-tier behavioural framework should be incorporated into the DCB: 1) "Bright line"
prohibitions on empirically-validated harmful patterns (), 2) Nudge-based compliance incentives (e. g. , "trust scores" reducing CCI filing fees , and 3) A behavioral sandbox allowing iterative testing of new rules on ONDC before full rollout ). The UK's experience shows such systems reduce enforcement costs by 37% while increasing compliance by 29%63. Recommendations An alternative method would be a hybrid approach to the Draft Digital Competition Bill (DDCB) which would incorporate elements of an ex-post regulatory framework. This model would be both proactive and reactive. In a hybrid framework, the Competition Commission could establish clear pre-emptive standards and monitor market dynamics postimplementation.
This would empower the CCI to analyse data continuously and have real-time analytics and feedback, eventually leading to timely interventions and harmful practices being addressed swiftly. Having a hybrid of both frameworks64 would enhance regulatory measures and create a conducive environment for innovation without any threat of regulatory overreach. Incorporating elements of behavioural economics65 the regulatory models of traditional and digital markets can enhance consumer protection and market efficiency. According to 60 Anastasiya A Alferova, Behavioral Economics as a Tool for Adapting Antitrust Legislation to the Digital Transformation of Society, 3 Digital LJ 69 (2022). 61 Mrunal Dhaygude & Dipanjan Chakraborty, Rethinking Design of Digital Platforms for Emergent Users: Findings from a Study with Rural Indian Farmers62 (2020).
Reserve Bank of India, Annual Report of Reserve Bank of India, (2023), https://www. rbi. org. in/Scripts/AnnualReportPublications. aspx? year=2023 (last visited May 9, 2025).
63 Bon et al., supra note 53.
64 Maurits PT Sanders, Regulating Public-Private Modalities of Legitimate Innovation: An Ex Ante Analysis Framework, 152 Regulating technological innovations. An interdisciplinary approach 152 (2011).
65 Lunn Pete, Regulatory Policy and Behavioural Economics (2014).
behavioural economics concepts, decisions made by consumers are heavily influenced by biases. Understanding this will help regulators design policies that encourage better decisionmaking. Regulations would address issues like default settings in digital services that favour consumer interests, ensuring users have more beneficial options and are protected in the market. Conclusion The shift from conventional markets to digital markets makes it imperative to have a comprehensive and adaptive regulatory framework. The advent of the Draft Digital Competition Bill symbolises the evolution of competition law which aims to address the complex digital markets. By drawing inspiration from the European Union’s Digital Markets Act, India has chosen the proactive, ex-ante regulation model to manage unique challenges posed by dominant gatekeepers.
This approach therefore not only improves fairness and transparency but also promotes innovation in an evolving landscape. Furthermore, integrating principles of behavioural economics enhances consumer protection and market efficiency, empowering consumers in the digital market. By adopting a hybrid approach a balanced framework could be attained that is conducive for the growth of India to a better position on the global stage in both the traditional and digital markets.