Abstract
India’s proposed Digital Competition Bill (DCB) represents the country’s first serious attempt to confront a problem competition law has struggled with globally: in digital markets, by the time abuse is conclusively established, the market is often already lost. After releasing a draft Bill in 2024, the Government of India chose in 2025 to pause the legislative process and commission a market study before moving ahead. Far from signalling regulatory retreat, this pause reflects a conscious effort to ensure that any ex-ante framework is grounded in Indian market realities and calibrated to protect competition without undermining innovation.
Why Ex-Ante Regulation Became Necessary
Digital markets do not behave like traditional markets. Network effects, data accumulation, economies of scale, and high switching costs allow successful platforms to entrench themselves at speed. Once a market tips, rivals can be foreclosed long before regulators are able to intervene meaningfully.
India’s competition regime under the Competition Act, 2002 is largely ex-post, addressing anti-competitive conduct after harm has occurred. While this approach has worked reasonably well in conventional sectors, its limitations are stark in digital ecosystems where harm unfolds quickly and often irreversibly. Long investigations may end with well-reasoned ordersbut only after competition has already withered.
The DCB was conceived as a complement, not an alternative, to existing competition law. Its central premise is preventive: to place narrow, clearly defined conduct obligations on select digital platforms before market foreclosure becomes a fait accompli.
What the Draft Digital Competition Bill Sought to Do
The intellectual foundation for the DCB was laid by the Committee on Digital Competition Law (CDCL), constituted by the Ministry of Corporate Affairs in February 2023. In its March 2024 report, the Committee concluded that conventional enforcement tools were insufficient on their own to address entrenched digital gatekeepers.
Acting on these recommendations, the government released the Draft Digital Competition Bill, 2024 for public consultation. The draft adopted an activity-based approach, focusing on specific digital services where gatekeeping power is exercised rather than imposing blanket obligations across entire corporate groups.
Systemically Significant Digital Enterprises
Under the draft, obligations were proposed to apply only to firms designated as Systemically Significant Digital Enterprises (SSDEs). Designation was envisaged as a two-step process: an initial quantitative screening based on high thresholds relating to revenue, user base, or market value, followed by a qualitative assessment of whether the firm exercises durable control over market access.
Crucially, designation was service-specific. Obligations would attach only to identified Core Digital Services, such as online search engines, digital marketplaces and app stores, social networking platforms, operating systems, web browsers, and cloud computing services. The intent was to regulate genuine digital bottlenecks, not to cast the net across the entire digital economy.
Proposed Conduct Obligations
The draft Bill articulated a set of principle-based obligations aimed at ensuring contestability and fairness. These included restrictions on self-preferencing, limits on coercive tying and bundling, safeguards against anti-steering practices, constraints on the use of non-public business user data to compete against those users, and measures facilitating switching and interoperability, subject to privacy and security protections.
These obligations were designed as ex-ante guardrails, not as punitive tools. Their objective was to preserve the possibility of competition before dominance hardens into permanence.
Why the Government Chose to Pause
Despite broad agreement on the need to address concentration in digital markets, the draft Bill generated substantial feedback. Stakeholders raised concerns about over-inclusive designation, ambiguity in certain obligations, the risk of over-regulation, and whether Indian competition authorities presently possess the technical capacity required for sustained digital market oversight.
In response, the government decided in 2025 not to table the Bill immediately. Instead, it commissioned a market study to examine how Indian digital markets function in practice, with particular focus on identifying true bottlenecks, calibrating designation thresholds, and assessing the proportionality of proposed obligations.
This pause represents a course correction, not a climbdown. It signals an acknowledgment that poorly calibrated ex-ante rules can be as damaging as regulatory inactionand that evidence, not urgency alone, must shape the final framework.
Global Lessons, Indian Choices
India’s deliberations reflect a broader global reassessment of digital competition regulation. The European Union’s Digital Markets Act (DMA) relies on fixed thresholds and standardised obligations, offering predictability but limited flexibility. The United Kingdom’s Digital Markets, Competition and Consumers Act adopt a more evidence-intensive model, emphasising tailored, activity-specific conduct requirements.
India appears inclined toward a middle path: combining quantitative screening with qualitative assessment, and retaining room for proportionality and tailoring. The ongoing market study will be decisive in determining how this balance is ultimately struck.
Why the Next Version of the DCB Matters
What emerges from the market study will shape the future of digital competition regulation in India. For large platforms, a revised DCB would mean closer scrutiny at the level of specific services rather than blanket suspicion. For startups and smaller businesses, it holds the promise of fairer platform terms and reduced vulnerability to exclusionary conduct. For consumers, it could translate into greater choice and easier switchingprovided privacy and security concerns are addressed with equal seriousness.
Conclusion
India’s decision to pause and reassess the Digital Competition Bill reflects a measured and pragmatic regulatory instinct. If the next draft is grounded in evidence and guided by proportionality, it can strengthen competition in digital markets without stifling innovation. The challenge is not whether to regulate digital gatekeepers, but how to do so with precision. The market study now underway will determine whether India succeeds in getting that balance right.
Author Name- Shubhi Priyadarshi, (Graduate- BA.LLB)
