The Indian government is taking a cautious and well-considered approach to formulating the Digital Competition Law, ensuring comprehensive stakeholder consultations before finalizing the framework.
NEW DELHI: The Indian government is adopting a cautious and deliberative approach toward the introduction of a Digital Competition Law, ensuring thorough discussions before finalizing the proposed legislation.
Harsh Malhotra, the Minister of State for Corporate Affairs, emphasized that
“the government is not rushing the process and is committed to evaluating all perspectives before implementing regulatory changes”
Speaking at the 10th National Conference on Economics of Competition Law, Malhotra highlighted the
“government’s intent to create a well-structured regulatory framework that fosters fair competition in the digital economy while safeguarding the interests of Indian businesses“
Consideration of Global Best Practices
The draft Digital Competition Bill (DCB), introduced in March 2024, has been under review following extensive consultations with stakeholders. According to Malhotra,
“the Ministry of Corporate Affairs (MCA) has received over 100 recommendations from various industry players, consumer advocacy groups, and policymakers. Given the evolving nature of digital markets, the government is keen on studying global precedents, including competition laws in Europe, Japan, and Australia, to identify best practices that can be adapted to India’s specific economic and technological landscape“
Ex-Ante vs. Ex-Post Regulatory Approach
A key aspect of the proposed law is the shift from an ex-post regulatory framework to an ex-ante model. Currently, under the Competition Act of 2002,
“India follows an ex-post approach, where regulatory intervention occurs after an anti-competitive act has been committed”
The DCB proposes an ex-ante approach, which would enable preventive regulation, allowing authorities to anticipate and address potential anti-competitive conduct before it materializes.
This shift has been met with mixed reactions. While proponents argue that early intervention would prevent monopolistic behavior and ensure a level playing field, critics, including some major digital enterprises, have expressed concerns over increased regulatory scrutiny and potential compliance burdens.
Protection of Indian Digital Enterprises
Malhotra underscored the government’s dual objective:
- Shielding Indian digital startups and mid-sized firms from the dominance of global tech giants.
- Preventing large domestic corporations from stifling competition within the Indian digital ecosystem.
The Ministry of Electronics and Information Technology (MeitY) is also conducting an independent assessment of the DCB, with a report expected soon. The findings from this report will further guide the government’s decision-making process.
Ensuring a Competitive Digital Ecosystem
The minister reiterated that
“the Competition Commission of India (CCI) is not just a regulatory watchdog but also a facilitator of fair competition. Its role extends beyond monitoring anti-competitive behavior to actively promoting innovation and market access for new entrants”
“The government’s focus is not merely on enforcement but on creating an ecosystem where digital enterprises—large and small—can thrive in a fair and competitive market,”
Malhotra stated. He further emphasized the importance of real-time monitoring to identify emerging market trends and ensure sustained competition.
While the Digital Competition Bill remains under review, the government’s approach signals a well-calibrated regulatory stance aimed at fostering sustainable growth in India’s digital economy. By incorporating global best practices, addressing stakeholder concerns, and carefully evaluating regulatory mechanisms, the government aims to strike a balance between innovation, competition, and consumer welfare.
India is on the brink of a significant regulatory shift with the introduction of the Digital Competition Bill, a legislative initiative designed to tackle anti-competitive practices in the digital economy. Spearheaded by the Ministry of Corporate Affairs (MCA), the bill stems from recommendations put forth by the Committee on Digital Competition Law (CDCL)—a specialized body constituted in 2023 to examine gaps in the existing competition law framework and propose necessary reforms.
Addressing Market Concentration and Anti-Competitive Practices
With India’s digital economy expanding at an unprecedented rate, concerns have intensified over the growing dominance of a few large digital platforms—often referred to as big-tech. These entities have been accused of engaging in self-preferencing, predatory pricing, exclusionary practices, and creating high entry barriers that stifle competition.
The proposed legislation seeks to preemptively address such concerns by shifting from a traditional ex-post (reactive) regulatory approach to an ex-ante (preventive) framework.
An ex-ante framework would enable regulators to intervene early—before market distortions become entrenched—ensuring a fair and competitive environment where smaller players, startups, and medium-sized enterprises (SMEs) have a genuine opportunity to thrive.
Legislative Progress and Stakeholder Responses
Over the past year, the legislative process surrounding the Digital Competition Bill has gained momentum. In February 2024, the CDCL submitted its final report along with a draft bill to the MCA.
This was followed by a public consultation process in March 2024, aimed at gathering input from various stakeholders, including businesses, policymakers, consumer rights groups, and legal experts.
The response to the bill has been mixed:
- Startups, SMEs, and civil society organizations have largely welcomed the initiative, viewing it as a crucial step toward ensuring a level playing field in the digital economy.
- Large technology firms, however, have expressed concerns over the broad criteria used for designating Systemically Significant Digital Enterprises (SSDEs)—a classification that would subject dominant players to stricter regulations. These firms argue that the bill could lead to regulatory overlaps, increased compliance costs, and potential constraints on innovation.
Despite these concerns, the Competition Commission of India (CCI) has endorsed the bill, emphasizing the need for proactive regulatory tools to curb monopolistic tendencies and unfair market practices before they cause irreversible harm.
As of March 2025, inter-ministerial consultations are ongoing, with multiple government departments collaborating to refine the proposed framework. After necessary revisions, the bill is expected to be tabled in Parliament later in 2025 for deliberation and enactment.
Proposed Regulatory Structure: The Role of a Digital Markets Unit (DMU)
One of the significant institutional changes being considered under the new regulatory regime is the establishment of a Digital Markets Unit (DMU) within the CCI. The DMU would serve as a specialized body responsible for the implementation, enforcement, and monitoring of compliance with the Digital Competition Bill.
This unit would play a crucial role in overseeing market conduct, ensuring that large digital platforms adhere to fair competition norms, and intervening in cases of anti-competitive behavior. The establishment of a dedicated enforcement authority underscores the government’s commitment to creating a more robust and effective digital competition framework.
Future Implications and Global Significance
The Digital Competition Bill marks a transformative shift in India’s approach to digital market regulation. It aligns with global efforts to curb monopolistic practices by tech giants while fostering an inclusive, innovation-driven digital ecosystem. The bill’s success will hinge on striking the right balance—ensuring effective regulatory oversight without unduly burdening businesses or stifling technological advancements.
If implemented efficiently, this legislation could serve as a benchmark for digital competition laws in emerging economies, particularly across the Global South. It has the potential to position India as a leader in digital market regulation, setting a precedent for how developing nations can promote fair competition while supporting digital innovation.
As the country prepares to usher in this regulatory transformation, the Digital Competition Bill is poised to shape the future of India’s digital economy, safeguarding consumer interests, fostering fair business practices, and ensuring that the benefits of technological progress are equitably distributed across all market participants.
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