Published On: 17th August 2026
Authored By: Chetanshi Dubey
University of Lucknow, Faculty of Law
ABSTRACT
The rapid digitisation of the global economy has exposed fundamental inadequacies in traditional, ex-post competition frameworks when applied to multi-sided digital markets. Characteristics intrinsic to digital platforms—such as strong network effects, extreme economies of scale, data driven tipping points, and vertical integration—enable incumbent Big Tech entities to solidify market power and act as entrenched “gatekeepers”. In response, global antitrust jurisprudence is undergoing a paradigm shift from reactive enforcement to proactive, ex-ante regulation.
This article critically examines India’s proposed Digital Competition Act and the recommendations of the Committee on Digital Competition Law (CDCL). It explores the legal architecture of identifying “Systemically Significant Digital Enterprises” (SSDEs), evaluates statutory prohibitions on anti-competitive conduct—such as self-preferencing, anti-steering, and data cross-utilization—and analyzes the statutory friction between digital competition regulation and privacy laws, specifically the Digital Personal Data Protection Act (DPDPA). Ultimately, the paper provides a comparative assessment against the European Union’s Digital Markets Act (DMA) and advances substantive legislative recommendations to foster innovation without chilling economic enterprise.
I. INTRODUCTION: THE DIGITAL PARADOX AND THE FAILURE OF EX-POST ANTITRUST
Traditional competition law, as embodied in India’s Competition Act, 2002, was forged in an industrial era dominated by brick-and-mortar commerce. Under this classical enforcement regime, anti-competitive behavior is addressed reactively (ex-post): the Competition Commission of India (CCI) intervenes only after market failure, abuse of dominance, or anti-competitive agreements have materialized and caused appreciable adverse effects on competition (AAEC).
However, the dynamics of core digital services—such as online search engines, app stores, social networks, and cloud computing platforms—render reactive antitrust measures inherently insufficient. Digital markets exhibit distinct structural characteristics:
- Zero Marginal Costs and Economies of Scale: Expanding a digital service to millions of users incurs minimal incremental cost, allowing dominant firms to scale exponentially.
- Direct and Indirect Network Effects: A platform’s value grows exponentially as its user base expands, creating high entry barriers for potential rivals.
- Data Driven Feedback Loops: Continuous aggregation of proprietary user data enables platforms to optimize algorithms, target advertising, and predict consumer behavior, cementing an unassailable technological advantage.
- Market Tipping: Due to lock-in effects and high switching costs, digital markets tend to “tip” rapidly in favor of a single winner-take-all or winner-take-most platform.
By the time an ex-post investigation by the CCI completes its statutory trajectory—often taking several years through investigation, litigation, and appellate review before the NCLAT and the Supreme Court—the contested market has frequently tipped permanently. Competitors are driven to insolvency or forced into acqui-hires, rendering eventual judicial remedies nominal and ineffective.
To bridge this regulatory gap, Indian competition jurisprudence is transitioning toward ex-ante regulation. Following the recommendations of the Standing Committee on Finance (53rd Report) and the subsequent Report of the Committee on Digital Competition Law (CDCL), India has drafted the Digital Competition Bill (DCB). This article provides a comprehensive legal and critical inquiry into this emerging legislative framework.
II. THE STATUTORY ARCHITECTURE OF THE DRAFT DIGITAL COMPETITION BILL
A. Core Digital Services (CDS) and the Scope of Regulation
Unlike the Competition Act, 2002, which applies uniformly across all economic sectors, the draft Digital Competition Bill targets specific, highly concentrated sectors termed Core Digital Services (CDS). Drawing inspiration from international models, the draft legislation categorizes nine key digital touchpoints as CDS:
- Online search engines
- Online social networking services
- Video-sharing platform services
- Interpersonal communication services
- Operating systems
- Web browsers
- Cloud computing services
- Online advertising services
- Online intermediation services (e.g., e-commerce marketplaces, food delivery, travel aggregators)
B. Designation of Systemically Significant Digital Enterprises (SSDEs)
The draft law introduces a dual threshold—combining quantitative criteria and qualitative factors—to designate dominant platforms as Systemically Significant Digital Enterprises (SSDEs).
1. Quantitative Thresholds
An enterprise operating a Core Digital Service is self-obligated to notify the CCI if it satisfies the financial and user reach criteria over the preceding three financial years:
- Financial Strength: India Turnover \ge \text{INR } 4,000 \text{ crore}, OR Global Market Capitalisation / Enterprise Value \ge \text{USD } 75 \text{ billion}, OR Gross Merchandise Value (GMV) \ge \text{INR } 16,000 \text{ crore}.
- User Spread: At least 20 million end-users OR 10,000 business users in India per annum for the core digital service.
2. Qualitative Criteria
Where an entity does not strictly meet numerical thresholds, the CCI retains residual powers under qualitative evaluation to designate an entity as an SSDE if it exercises economic bottleneck power, commands market access, or possesses vertical leverage capable of impacting competition.
3. Associate Digital Enterprises (ADEs)
To prevent corporate circumventive structuring, when an enterprise is designated as an SSDE, all related entities within its corporate group involved in providing or supporting the Core Digital Service are designated as Associate Digital Enterprises (ADEs), binding them to identical compliance mandates.
III. SUBSTANTIVE PROHIBITIONS: ANATOMY OF EX-ANTE OBLIGATIONS
Once designated as an SSDE, a platform is subjected to bright-line, negative obligations designed to curb anti-competitive market distortions. The draft bill codifies explicit prohibitions against tactics historically utilized by tech platforms:
A. Anti-Self-Preferencing
Section 11 of the draft DCB mandates that an SSDE must not favor its own products, services, or related-party offerings over those offered by third-party business users on its platform. This directly addresses algorithmic bias in search results and marketplace display hierarchies—practices famously examined by the CCI in cases involving e-commerce aggregators and app distribution networks.
B. Prohibitions on Data Cross-Use and Sourcing
SSDEs accumulate massive volumes of proprietary data from business users operating on their platforms. The draft law prohibits SSDEs from using non-public, commercially sensitive data generated by business users to compete directly against those very business users. Furthermore, SSDEs are barred from combining personal data collected across different Core Digital Services or third-party sources without explicit, valid consent.
C. Anti-Steering Practices and Interoperability
Under Section 12, platforms are restricted from imposing “anti-steering” clauses. SSDEs cannot prevent business users from directing end-users to alternative channels outside the core platform or offering different pricing structures off-platform. Moreover, SSDEs must facilitate data portability and ensure interoperability for third-party software applications.
D. Prohibition on Tying and Bundling
Section 15 mandates that SSDEs must not condition access to a Core Digital Service on the mandatory consumption or subscription of non-essential secondary services (e.g., tying a platform store listing to the mandatory use of the platform’s proprietary in-app payment processor).
IV. JURISPRUDENTIAL CONFLICTS: INTERSECTION WITH DATA PRIVACY AND CONSTITUTIONAL MANDATES
The enactment of ex-ante digital competition rules creates notable regulatory overlaps and legal friction across existing legislative frameworks.
A. Harmonization with the Digital Personal Data Protection Act (DPDPA)
A major legal friction point occurs at the intersection of the draft DCB and the Digital Personal Data Protection Act (DPDPA). The DCB mandates data portability and interoperability to enhance market competition. Conversely, the DPDPA imposes strict principles of data minimization, purpose-bound processing, and individual consent obligations.
This jurisdictional interplay was addressed by the High Court of Delhi and affirmed by the Supreme Court of India in WhatsApp LLC v. Competition Commission of India (2022). The courts established that while privacy breaches fall under data protection authorities, privacy policies that degrade user control to leverage data dominant power across market verticals fall square within the statutory domain of competition law.
However, operationalizing ex-ante mandates requires structured legislative harmonisation to ensure that forced data-access mandates under competition remedies do not trigger statutory liability under data privacy laws.
B. Constitutional Standards and Judicial Scrutiny
The imposition of absolute ex-ante restrictions on market actors raises constitutional questions under Article 19(1)(g) of the Constitution of India (the fundamental right to practice any profession, or to carry on any occupation, trade, or business).
For ex-ante obligations to survive judicial scrutiny under Article 19(6), statutory restrictions must meet the test of proportionality established in K.S. Puttaswamy v. Union of India (2017):
- Legitimate State Aim: Promoting contestability and preventing market tipping.
- Rational Nexus: Direct relation between ex-ante behavioral prohibitions and market fairness.
- Necessity (Least Restrictive Means): Ensuring that categorical prohibitions contain adequate residual statutory defenses (e.g., objective necessity, security, or integrity of services) to avoid over-inclusivity.
V. COMPARATIVE PERSPECTIVE: INDIA’S DCB VS. EU DIGITAL MARKETS ACT (DMA)
To evaluate the maturity of the Indian draft framework, a comparative inquiry against the European Union’s Digital Markets Act (DMA, Regulation 2022/1925) is instructive.
|
Feature / Metric |
EU Digital Markets Act (DMA) |
India Draft Digital Competition Bill (DCB) |
|
Regulatory Nomenclature |
Gatekeepers |
Systemically Significant Digital Enterprises (SSDEs) |
|
Enforcement Model |
Centralized under European Commission |
Centralized under Competition Commission of India (CCI) |
|
Scope of Services |
Core Platform Services (CPS) |
Core Digital Services (CDS) |
|
Financial Thresholds |
Turnover \ge \text{EUR } 7.5 \text{ billion} or Market Cap \ge \text{EUR } 75 \text{ billion} |
Turnover \ge \text{INR } 4,000 \text{ cr} or Global Market Cap \ge \text{USD } 75 \text{ billion} |
|
Penalties for Breach |
Up to 10% of global turnover (20% for repeat violations) |
Up to 10% of global turnover |
|
Flexibility / Defenses |
Very narrow statutory exceptions (public health/public safety) |
Contextual rule-of-reason defenses currently debated in public consultations |
While the EU DMA takes an unyielding, strict per se approach to statutory violations, stakeholder feedback during Indian pre-legislative consultations highlights the need for an evidence-based, flexible framework. Excessive rigidity risks penalizing legitimate pro-consumer integrations, such as built-in cyber-threat protections or unified platform security protocols.
VI. CRITICAL ANALYSIS & LEGISLATIVE RECOMMENDATIONS
While the draft Digital Competition Bill represents a crucial modernization of Indian economic regulation, several operational vulnerabilities require legislative refinement prior to enactment:
1. Avoiding Over-Inclusivity in Quantitative Thresholds
The proposed financial and user metrics may inadvertently capture high-growth domestic startups and scale-ups that lack true structural bottleneck power. The threshold metrics must be dynamic, inflation-indexed, and recalibrated to reflect active, monetized users rather than raw registered user volume.
2. Institutional Capacity Building at the CCI
Transitioning to ex-ante governance requires continuous technical oversight of complex software architectures, algorithmic auditing, and real-time monitoring. As recommended by the CDCL, the CCI must establish a dedicated Digital Markets Unit (DMU) staffed with data scientists, software engineers, and digital economists.
3. Codification of Objective Justification Defenses
The final statute should incorporate an explicit “Objective Justification” statutory defense. If an SSDE can demonstrate that a practice (such as restricting certain third-party software) is strictly necessary for cybersecurity, user privacy, or platform integrity, and is the least restrictive option available, it should be granted a statutory exemption.
4. Inter-Regulatory Coordination Mechanism
To resolve overlapping mandates between the CCI, the Data Protection Board of India (DPBI), and the Ministry of Electronics and Information Technology (MeitY), the law should formally establish a joint Digital Regulators Consultative Forum.
VII. CONCLUSION
The emergence of ex-ante digital competition regulation marks a pivotal evolutionary milestone in Indian jurisprudence. As digital platforms continue to serve as essential public infrastructure for commerce, speech, and innovation, relying solely on reactive, ex-post remedies is no longer viable.
The draft Digital Competition Bill offers a proactive framework to curb self-preferencing, unbundle digital services, and restore market contestability. However, statutory success hinges on balancing strict enforcement with economic flexibility. By refining designation thresholds, embedding objective necessity defenses, establishing a specialized Digital Markets Unit within the CCI, and maintaining harmony with privacy frameworks like the DPDPA, India can forge an algorithmic governance regime that curtails market dominance while fostering digital innovation.
REFERENCES
- Competition Commission of India, Report of the Committee on Digital Competition Law (CDCL), Ministry of Corporate Affairs, Government of India (Feb. 2024).
- Parliamentary Standing Committee on Finance, Anti-Competitive Practices by Big-Tech Companies, Fifty-Third Report, Lok Sabha Secretariat (Dec. 2022).
- Draft Digital Competition Bill, 2024, Ministry of Corporate Affairs, Government of India.
- European Union, Regulation (EU) 2022/1925 of the European Parliament and of the Council on contestable and fair markets in the digital sector (Digital Markets Act), OJ L 265 (2022).
- WhatsApp LLC and Meta Platforms Inc. v. Competition Commission of India, LPA 168/2021, High Court of Delhi (2022).
- Justice K.S. Puttaswamy (Retd.) v. Union of India, (2017) 10 SCC 1.
- Ministry of Corporate Affairs, Unstarred Question No. 2944 on Digital Competition Bill, Rajya Sabha, Government of India (Aug. 19, 2025).
- Digital Personal Data Protection Act, 2023 (Act No. 22 of 2023), Gazette of India.
- Digital Personal Data Protection Rules, 2025, Ministry of Electronics and Information Technology (Notified Nov. 14, 2025).
