Decoding India’s Digital Competition Bill 2024: Navigating Market Regulation In Comparison To The EU’s Digital Markets Act – Antitrust, EU Competition

1. Background of Digital Competition Bill 2024 :

In the month of December 2022, the Parliamentary Standing
Committee on Finance proposed the introduction of a new ex-ante
legislation known as the Digital Competition Act (DCA). Following
this, the Ministry of Corporate Affairs (MCA) established the
Committee on Digital Competition Law (CDCL Committee) to evaluate
the necessity and practicality of an ex-ante regulatory framework
and to formulate a draft DCA. This gave rise to the report
(‘the Report’) by the Committee advocating for an ex-ante
framework to govern digital markets, alongside the Draft Digital
Competition Bill 2024 (‘DCB/the Bill’), that aimed
specifically at regulating large digital enterprises termed as
Systemically Significant Digital Enterprises (SSDEs).

The Committee initially reviewed the existing competition
framework and its inadequacies in addressing the unique aspects of
the digital economy. Subsequently, the Committee evaluated the
suitability of the following instruments for addressing
Anti-Competitive Practices (ACPs) by digital enterprises:

1. Foreign Direct Investment Policy and Foreign Exchange
   Management (Non-debt Instruments) Rules, 2019 (FDI Policy);




2. Information Technology (Intermediary Guidelines and Digital
   Media Ethics Code) Rules, 2021 (IT Rules) and Information
   Technology (Reasonable security practices and procedures and
   sensitive personal data or information) Rules, 2011 (SPDI
   Rules);




3. Consumer Protection Act, 2019 (CPA 2019), Consumer Protection
   (E-Commerce) Rules, 2020 and Consumer Protection (Direct Selling)
   Rules, 2021;




4. Proposed Digital India Act (DIA);




5. Digital Personal Data Protection Act, 2023 (DPDP Act);




6. Draft National Data Governance Framework Policy (Draft
   NDGFP);




7. Draft E-Commerce Policy, 2019 (Draft E-Commerce Policy);




8. Reserve Bank of India Master Directions on Prepaid Payment
   Instruments, 2021 (RBI PPI Master Direction);




9. Guidelines on volume cap for Third Party App Providers (TPAPs)
   in UPI issued by the National Payments Corporation of India (NPCI
   UPI Guidelines).

The Standing Committee Report essentially identified Ten
Anti-Competitive Practices (“the ACPs”) undertaken by
large digital enterprises to abuse and consolidate their position
in digital markets mentioned below : ¹

TABLE 1 : Defining the Anti-Competitive
Practices –

In response to concerns about anti-competitive practices by
major tech companies, the Parliamentary Standing Committee on
Finance released a report on December 22, 2022, outlining ten
prevalent anti-competitive behaviours in the digital sector. This
report prompted the formation of the Committee on Digital
Competition Law (CDCL), charged with assessing the adequacy of
existing legislation and proposing solutions tailored to the
challenges of the digital economy. As part of its mandate, the CDCL
drafted the Digital Competition Bill, 2024 (DCB), which was made
available for public feedback until April 15, 2024.

2. Introduction to the Digital Competition Bill:

Amidst the dynamic currents of Corporate India, a conversation
is brewing that is capturing the attention of the business world:
the preliminary draft Digital Competition Bill, 2024, proposed by
the government. This legislative initiative, which is still in its
early stages following the report from the inter-ministerial
committee, holds the potential to significantly alter India’s
digital landscape. The ramifications of this bill are immense, as
it seeks to redefine the future of digital dominance and
competition within India’s market. It is said that by 2025-26,
the projected digital economy in India is anticipated to reach a
staggering $1 trillion.²

The recently published report by the Committee on Digital
Competition Law ³ in India suggests that India should
adopt ex-ante regulations, which refer to proactive measures
implemented pre-emptively to prevent potential issues, particularly
in digital competition for fair competition, data protection,
fostering innovation and ensuring a level playing field, similar to
those in the European Union, to address major digital competition
issues. Aligned with global regulatory trends in tackling antitrust
practices in digital markets, the Committee also introduced the
draft Digital Competition Bill, 2024. However, it has been observed
that India’s approach appears to lean more towards favouring
platforms over individual customers in terms of data
perspective.

The rationale behind this proposed bill stems from the fact that
existing competition enforcement is purportedly slow and inadequate
for the rapidly evolving digital landscape of today. The core of
this proposed legislation lies in its proactive approach, utilizing
ex-ante measures to anticipate and prevent anti-competitive
behaviour before it emerges. This sets a precedent for promoting
fairness in the digital landscape.

3. Insights into India’s Digital Competition Report and
Bill:

3.1 Scope and Applicability:

The Committee proposes that the Draft Digital Competition Bill
(DCB) should pertain to a pre-determined list of Core Digital
Services, with the Central Government having the authority to
update the list periodically. The proposed list encompasses online
search engines, online social networking services, video-sharing
platforms, interpersonal communications services, operating
systems, web browsers, cloud services, advertising services, and
online intermediation services.

3.2 Regulation of Digital Enterprises with significant
presence:

The Committee suggests regulating the enterprises showcasing a
‘significant presence’ in providing a Core Digital Service
in India and influencing the Indian digital market. These
enterprises would be designated as ‘Systemically Significant
Digital Enterprises’ (SSDEs). The measures relate to both
Qualitative criteria which may include factors such as market
dominance, network effects, and impact on competition, while
quantitative criteria may involve metrics like turnover, market
capitalization, and user base size.

3.3 Thresholds and Criteria for SSDEs:

A dual test for demonstrating “significant presence”
is proposed: ⁴

1. The “significant financial strength” test comprising
   quantitative proxies of economic power, including the
   India-specific turnover, global turnover, global market
   capitalization, and gross merchandise value;




2. The “significant spread” test evaluating the extent
   of presence of enterprise in providing a Core Digital Service in
   India based on the number of end-users and business users.
   Enterprises are proposed to self-assess their fulfilment of the
   above thresholds and report to the Competition Commission India
   (CCI). Additionally, the CCI may designate certain enterprises as
   SSDEs based on qualitative criteria, even if they do not meet
   quantitative thresholds, but have the potential to significantly
   influence the market.

3.4 Associate Digital Enterprises:

Designation may extend beyond one enterprise in the group. The
Committee envisions scenarios where:

1. The holding enterprise is designated as an SSDE, and other
   group enterprises involved in providing the same Core Digital
   Services, directly or indirectly involved, are designated as
   Associate Digital Enterprises (ADEs) to the SSDE.




2. A non-holding enterprise primarily involved in providing the
   Core Digital Service is designated as an SSDE, with its holding
   enterprise and other group entities involved in providing the same
   Core Digital Services designated as its ADEs. The CCI is
   recommended to have flexibility in identifying appropriate
   enterprises for SSDE and ADE designations.

3.5 Obligations:

Specific obligations applicable to each Core Digital Service
would be outlined through regulations drafted by the CCI.
Regulations may provide for differential obligations depending on
factors such as business models and size of user base of SSDEs and
ADEs.

3.6 Exemptions:

Grounds for exemption from ex-ante obligations should be
provided in the statute itself, with features specified through
CCI-framed regulations considering particular Core Digital Service
and related business models of SSDEs and ADEs. The Committee
recommends the power to exempt certain classes of enterprises from
applicability of the statute.

3.7 Enforcement:

CCI would be responsible to enforce the provisions.
Strengthening the capacity of its Digital Markets and Data Unit
with technology experts is advised by the Committee. Additionally,
constituting a separate bench within the National Company Law
Appellate Tribunal for timely disposal of appeals against CCI
orders, particularly those relating to digital markets, is
recommended.

3.8 Remedies:

Monetary penalties for non-compliance with ex-ante obligations
may extend up to 10% of the SSDE’s global turnover, calculated
in relation to the turnover of the entire group. The precise
penalty quantum is to be determined by the CCI, considering penalty
guidelines under the Draft DCB. Separate penalties are provided for
incorrect reporting contraventions and liability of key managerial
persons.

The proposed legislation grants authority to the CCI to conduct
inquiries, issue orders, and impose penalties for non-compliance.
Additionally, it enables aggrieved parties to seek compensation.
The draft legislation prohibits evading the designation criteria
and provides the government powers to exempt certain enterprises,
modify the list of regulated services, and issue directions to the
CCI.⁵

4. The Role and need for Ex Ante Rules in Shaping Digital
Competition:

The Committee noted that the current ex-post framework
(intervening after an event occurs) under the Competition Act,
2002, lacks the capacity for prompt resolution of anti-competitive
practices by digital enterprises. It was observed that the
framework may not effectively address the irreversible market
shifts favouring large digital enterprises, leading to their
permanent dominance in relevant markets. The Committee proposed the
enactment of the Digital Competition Act to empower the Competition
Commission of India (CCI) to selectively regulate large digital
enterprises in an ex-ante manner (intervening before an event
occurs).⁶

Ex-ante regulations are so designed to prevent anti-competitive
behaviour from occurring, as opposed to the current ex-post
framework under the Competition Act, 2002, wherein the CCI
intervenes after the occurrence of anti-competitive conduct. The
proposed legislation aims to regulate only those enterprises with
substantial presence and influence in the Indian digital market.
This could alter the market dynamics, ultimately resulting in
consumer benefits.

TABLE 2 : Key inputs and recommendations of the
stakeholders with regards to the need to introduce ex-ante
competition framework for digital markets:⁷

5. Evaluating the EU’s Digital Market Act alongside
India’s Digital Competition Bill 2024:

5.1 Decoding the The Digital Markets Act (DMA)
⁸ :

In Europe, The Digital Markets Act (DMA) is a landmark that aims
to rein in the dominance of tech companies that
“gatekeep” access to their users, and diversify access to
their platforms.

As per the definition outlined in Article 2(1) of the DMA
⁹, a gatekeeper is an entity that offers core platform
services and has been formally designated under Article 3 of the
DMA. Therefore, the central concept emphasized throughout the
regulation is inherently tied to the provision of Core Platform
Services (CPS). The existence of a gatekeeper is contingent upon
its involvement in delivering a core platform service.

In addition to offering a CPS, which serves as an important
gateway for business users to reach end users, it also must have
“a significant impact on the internal market” and
“enjoy an entrenched and durable position, in its operations
or it is foreseeable that it will enjoy such a position in the near
future according to Article 3(1) of the DMA”.¹⁰

The “gatekeepers” – Alphabet, Amazon, Apple,
ByteDance, Meta, and Microsoft are told to comply with the rules by
March 6 2024. ¹¹

TABLE 3 – Gatekeepers and their core platforms:
¹²

As of today, businesses operating within the EU and relying on
services provided by the six gatekeepers will encounter fresh
opportunities. For instance:

1. They will benefit from equitable treatment and equal chances
   when competing with gatekeeper services on their platforms.




2. They can request interoperability with gatekeepers’
   services to introduce innovative offerings.




3. They have the option to distribute their apps through channels
   other than the gatekeeper’s app stores.




4. They can access data generated by their activities on
   gatekeepers’ platforms.




5. They can promote deals and finalize agreements with customers
   outside of the gatekeeper’s platform.

Furthermore, end-users will encounter increased options and
innovation in the European digital landscape. They will be
empowered to:

1. Regain the freedom to choose independently and avoid being
   limited to gatekeepers’ default options, such as selecting
   alternative app stores and services.




2. Exercise enhanced control over their data by determining
   whether the gatekeepers can link their accounts and aggregate
   personal data across various services.




3. Seamlessly acquire, transfer, and utilize data from one service
   or app to another, facilitating smooth data backups and transitions
   between different services.




4. Utilize alternative electronic identification or in-app payment
   services.

Gatekeepers failing to comply may encounter penalties of up to
20% of their total worldwide annual turnover, or even structural
measures like divesting certain business segments. Additionally,
the European Commission has the authority to impose periodic
penalty payments of up to 5% of the company’s total worldwide
daily turnover in the previous financial year. Repeated violations
could result in temporary prohibitions of business
mergers.¹³

5.2 Updates on Big Tech Firms’ Post DMA 2024
:

5.2.1 Google has introduced various changes to
its products and services, including:

1. Requesting user consent to share personalized data across its
   platforms and providing the option to unlink services in their
   Google Account.




2. Allowing users to choose their default search engine or browser
   when setting up a new device.




3. Testing a new Data Portability API to facilitate easy data
   transfer from Google platforms.




4. Strengthening measures to combat misinformation about
   politics.

5.2.2 YouTube will implement changes such as
content labels for “altered or synthetic content”
generated using AI.¹⁴

5.2.3 Apple is granting access to non-Apple
payment processing, app stores, and web browsers for its users.
Merchants will need to evaluate the cost-effectiveness of these
changes on a case-by-case basis due to varying fees based on
download volume and payment processing choice.

Merchants with apps have the option to adhere to the new rules
or retain the old ones. Apple device users in the EU will gain
access to third-party technology, including non-Apple apps and
payment options, through the iOS 17.4 software update.

As of March 2024, merchants can opt for an external payment
service provider (PSP) for app payments on Apple devices.
Apple’s commission on in-app transactions for digital goods and
services is reduced to 17% (or 10% for apps earning under $1
million per year). Alternatively, using Apple’s App Store
payment processing incurs a 3% fee.

Apple device owners can select a different contactless payment
app or third-party app marketplace as their default. Third-party
mobile wallet apps can now function for payments in physical stores
outside the European Economic Area (EEA).¹⁵

5.2.4 Microsoft has announced updates to its
Windows 10 and Windows 11 operating systems to comply with DMA
regulation deadlines. It has clarified the labelling of operating
system components separate from system apps.

Microsoft has added the option to uninstall certain programs
from its Windows PC operating system, including Camera, Photos,
Edge (browser) in the EEA, Bing (search engine) in the EEA, and
Cortana (discontinued voice assistant).

EEA users of Windows Search can now utilize alternative search
engines like Yahoo or DuckDuckGo instead of Microsoft Bing
Search.¹⁶

5.2.5 After being designated as a gatekeeper,
Meta introduced an ad-free paid subscription offer for European
Facebook and Instagram users. While Meta supports an ad-supported
internet, it provides user controls for opting into or out of data
sharing for personalized ads.

Meta offered Instagram and Facebook users in the EU, EEA, and
Switzerland the option to unlink data sharing across Meta platforms
in early 2024.¹⁷

Both India and Europe address concerns related to data dominance
in digital markets through legislative measures. In contrast to the
EU’s Digital Markets Act (DMA), India’s proposed
legislation includes provisions outlining specific circumstances in
which digital firms, particularly Big Tech companies, may be
exempted from compliance of such laws. These exemptions include
economic viability, prevention of fraud, cybersecurity risks,
protection against unlawful infringement of Intellectual Property
Rights, and other related factors.

While India’s approach focuses on restricting SSDEs’
actions to prevent unfair competition, Europe’s Digital Markets
Act places obligations on gatekeepers to ensure fairer data
practices, including transparency and access for business users.
Despite differences in implementation, both regions aim to foster
competition and protect consumer interests in the digital
realm.

6. Impact and review of the Bill on Large Corporations and
MSMEs:

Major corporations such as Apple, Google, Amazon, Meta, Uber,
and Flipkart have criticized the draft bill, citing a dearth of
successful global precedents for ex-ante regulations.

Indian companies hold a dominant position in digital sectors
such as food delivery, ticket booking, and travel aggregation. Many
of these firms may fall under the purview of the draft bill as
providers of online intermediary services. However, certain
obligations outlined in the bill pose significant challenges to
their business models. For instance, one provision prohibits SSDEs
from preventing businesses on their platforms by directing users to
their own services. This shall mean that a restaurant listed on a
food delivery platform can redirect customers to its own website
for transactions, bypassing the platform’s fees. However, food
delivery platforms heavily rely on these fees for their sustenance.
Allowing restaurants to access consumers through the platforms for
free is not only unfair but also jeopardizes the platforms’
viability. Although the draft bill includes a provision allowing
platforms to restrict such bypassing if it’s crucial to their
operations, the final decision on what qualifies as
‘integral’ lies with the Competition Commission of India.
This leaves the fate of many major Indian platforms
uncertain.¹⁸

Another provision with negative implications for consumers and
companies involves the limitation on SSDEs promoting bundled
products. This regulation may restrict SSDEs from offering
consumers a package of applications akin to those included with
mobile or computer operating systems. Essentially, users would need
to download basic apps separately, potentially complicating the
process and reducing accessibility to online services for a
significant segment of India’s internet users, especially those
less proficient with technology.

Micro, Small, and Medium Enterprises (MSMEs) often face resource
constraints, posing challenges for their entry and competitiveness
across various markets. Hence, digital platforms are known to
significantly alleviate these market entry barriers for MSMEs,
enabling them to optimize resources by providing access to order
fulfilment through their infrastructure or targeted advertising.
Any restriction imposed on SSDE regarding targeted advertising is
bound to create challenges for those who heavily rely on this to
generate revenue to attract customers. Consequently, the
prospective law may dampen the competition in various sectors where
MSMEs previously flourished due to their access to such
SSDEs.¹⁹

The Bill is expected to trigger a surge in cases of Cyber fraud,
as platforms shall lose control over its business and consumer
interactions. This will transform India’s formidable 800
million-strong internet user base into 800 million individual
vulnerabilities for malicious fraudsters of exploitation. Moreover,
the bill might create hurdles for MSMEs to penetrate and compete
across various markets, despite being the backbone of the Indian
economy.

The Bill may also inadvertently create opportunities for fraud
and cybercrimes through various channels such as:

1. Data Accessibility: The bill may necessitate increased sharing
   of data among companies or government agencies, potentially
   enlarging the pool of data vulnerable to breaches and unauthorized
   access by cybercriminals.




2. Complex Regulatory Framework: The intricate regulations
   introduced by the bill could introduce loopholes that
   cybercriminals could exploit for fraudulent activities or to
   circumvent compliance measures.




3. Resource Diversion: Companies may need to divert resources away
   from cybersecurity measures to ensure compliance with the bill,
   potentially leaving them more prone to cyberattacks and data
   breaches.




4. Ambiguous Responsibilities: Unclear delineation of
   responsibilities and obligations among different stakeholders under
   the bill could create confusion and offer opportunities for
   fraudulent activities to go undetected.




5. Interconnected Systems: The interconnected nature of digital
   platforms and services could amplify the impact of security
   vulnerabilities, enabling cybercriminals to exploit weaknesses in
   one system to gain access to others.




6. Enforcement Challenges: Insufficient enforcement mechanisms or
   inadequate resources allocated for overseeing compliance with the
   bill could lead to a lack of accountability and lead to fraudulent
   behaviour.²⁰

7. Challenges and Perspectives of Big Firms :

Domestic companies such as Oyo, Zomato, and Swiggy have
expressed reservations about the ex-ante framework, with Zomato
advocating for provisions to align with the Indian context. Paytm
and MakeMyTrip have shown greater support for such
regulations.²¹

According to Nasscom, the designation of enterprises for ex-ante
obligations should be considered a blend of quantitative and
qualitative factors. These obligations should not be mutually
exclusive or have overriding effects. It also emphasized on the
statutory obligation for the Competition Commission of India (CCI)
to conduct market studies before identifying core digital services
or specific obligations.

Several industry entities, including the All India Gaming
Federation, Asia Travel Technology Industry Association, and
Confederation of All India Traders, have endorsed the framework for
Systemically Significant Digital Enterprises.

Microblogging platform X (formerly Twitter) supported the
ex-ante regulations but suggested a careful consideration of the
definition of Systemically Significant Digital Enterprises.

Apple India opposed ex-ante regulations, advocating instead for
a light-touch regime that fosters innovation.

Meta, the owner of Facebook, expressed a preference for
observing and conducting further research before rushing to adopt
variations of the European Union’s Digital Markets Act or other
ex-ante frameworks currently under consideration.²²

In recent years, Indian internet companies, along with global
counterparts, have contested the alleged monopoly imposed by major
US players like Google and Apple. A notable development in this
ongoing saga is the dispute between Google and several apps
developed by ten Indian developers, including Bharat Matrimony and
Shaadi.com, resulting in the temporary removal of these apps from
the Play Store followed by their reinstatement.

Some large technology players such as Google, Apple and Meta are
already facing probes by India’s competition regulator for
alleged abuse of fair-trade rules.

Google has said that it was not in favour of ex-ante regulation
“except under certain conditions the new regime should promote
competition and innovation, provide for evidence-based
justifications (pro-competitive) for conduct under scrutiny,
provide for separation of powers between rule-making bodies in
charge of designation of SSDEs and bodies in charge of enforcement,
etc.,” it said in its suggestions.

Amazon claims that the ex-ante regulation for the e commerce
sector “may be untimely and excessive” and may lead to
“over-regulation”.

Among Indian companies, Zomato has said if ex-ante regulation is
sought to be introduced, it should be conducive to the growth of
startups and should not stifle innovation or consumer interest.

Paytm has said that it had observed practices wherein large
digital enterprises abused their dominance in the market. It
claimed that bundling services of app store operators creates
asymmetric pricing and binds app developers into only using their
services. Further, app stores charged high commissions which
affected business viability and increased customer costs. App
stores use anti-steering provisions that restrict choices for
developers and also have control over the app reviews and search
algorithms, which could provide avenues for self-preference of
their own apps at the expense of others, it added.²³

8. Balancing Act – Analysing Pros and Cons of the Bill:

Business growth often stems from various factors such as
intellectual property rights (IPR), strategic initiatives,
technological advancements, and more. However, companies may
hesitate to disclose such sensitive information to the Competition
Commission of India (CCI) due to potential risks and threats it
could pose to their business operations.

If a company demonstrates that adhering to the law would result
in economic losses, it’s not bound to follow the law. Consumers
choose to engage with a specific company due to its distinct
qualities and if CCI’s actions compromise these unique selling
points, companies would bypass these regulations.

While the draft bill draws heavily from the Digital Markets Act
of 2022, a regulation within the European Union, consideration
shall be given to how it can be effectively applied to the Indian
economy. This economy is notably more fragmented and serves a much
larger target market as a whole.

It’s noteworthy that the draft bill excludes these aspects,
relying on the provisions of the Competition Act, which were
considered sufficient. Apart from assessing the necessity of an
ex-ante framework based on evidence and market impact, defining
SSDEs becomes crucial. This entails deciding whether broad
qualitative parameters should subjectively determine SSDEs or if
quantitative measures should be prioritized. In terms of
quantitative thresholds, drawing parallels with laws from developed
jurisdictions may require appropriate indices for mapping volumes
and user base in the Indian context. Introducing such a legislation
in India would necessitate significant streamlining to avoid
overlaps with existing laws. Additionally, it’s important to
evaluate the potential consumers and other benefits this law could
bring to the Indian market and whether it would aid in ensuring
fairness for startups and MSMEs.

At first glance, the incorporation of this provision in the
Draft Digital Competition Bill seems to align with a similar
objective. Nevertheless, it is imperative that this provision is
not invoked to further protectionist sentiments by exempting
government enterprises and local Indian enterprises eligible for
designation as SSDEs. Such an exemption could result in the
creation of uneven playing field. Currently, the government
operates several digital platforms, including the Open Network for
Digital Commerce, IRCTC, and E-NAM (National Agriculture
Market).

Section 40 of the bill ²⁴ outlines the
government’s authority to override decisions made by the CCI
under extraordinary circumstances such as, if it finds out that the
regulator is unable to discharge its functions etc. If by
notification, the government decides to supersede the CCI, then the
chairperson and members of CCI will have to vacate their offices.
The government can supersede the CCI only upto a period of 6
months.

It is settled under law that the Executive cannot have unbridled
power. The same was held by Supreme Court in Satwant
Singh Sawhney vs D Ramarathnam ²⁵.On the
face of it, the provision appears to promote ease of doing business
and would have a positive impact. While the provision in question
may seem to promote ease of conducting business and potentially
yield positive outcomes, its judicious application is crucial to
prevent excessive governmental intervention. Governmental powers,
even those related to regulation and control, are subject to
constitutional scrutiny and limitations.

9. Recommendations by the Committee:

TABLE 4: Recommendations of the Standing
Committee and similar provisions in the other legislations
²⁶

10. Conclusion: Moving Forward with the Digital Competition
Bill

Considering the profound implications of enactment of this law
on the development of Indian digital markets and economy, it is
imperative to achieve a harmonious balance between the need for
regulation and the realities of the Indian economy to avoid
unintended consequences, so that the Indian consumers do not end up
with a medicine that is worse than the disease.

The digital platforms in India are still in a developmental
phase compared to those in the EU, and simply adopting regulations
like the DMA may not be suitable for India’s unique market
characteristics. Despite India’s significant economic growth in
recent years, its access to advanced consumer and business
technologies lags behind that of Europe and North America.
Therefore, the focus should be on attracting and fostering
investment rather than implementing regulations that could hinder
the deployment of crucial infrastructure.

While the DMA aims to ensure fair distribution of benefits among
platform users, such an approach could stifle innovation and reduce
consumer benefits, especially in a market like India where the
priority should be on introducing and maintaining innovative
technology. Adopting a DMA-like approach could threaten domestic
innovation, which has been central to initiatives like Digital
India and Startup India. Such a regime would discourage growing
companies and burden the government with extensive regulatory
requirements. Moreover, implementing pre-emptive constraints
without considering potential consumer benefits may hinder economic
growth, technological progress, and investment in India’s
digital markets.²⁷

To ensure sustainable growth without unnecessary compliance
burdens, India needs a nuanced approach to digital market
regulation. It should avoid overly restrictive measures that could
impede progress and instead focus on fostering an environment
conducive to innovation and investment.

To mitigate cyber crime risks, policymakers must ensure that
robust cybersecurity measures are integrated into the
implementation of the Digital Competition Bill. This includes
prioritizing data security, establishing clear guidelines for
compliance and enhancing oversight mechanisms. Fostering a delicate
equilibrium between innovation and safeguarding consumer welfare is
paramount and only with the passage of time these measures would
increase the consumer welfare or prove to be counter-intuitive by
inadvertently chilling innovation and competition in the digital
economy.

Overall, while the bill represents a bold attempt to regulate
digital markets through ex-ante measures, its effectiveness and
impact shall be evaluated. The success of such regulations may vary
depending on various factors, including enforcement, adaptation by
companies, and evolving market dynamics.

Footnotes

1. Ministry of Corporate Affairs,
“Report of the Committee on Digital Competition Law” Feb.
27, 2024, available at: https://www.mca.gov.in/bin/dms/getdocument?mds=gzGtvSkE3zIVhAuBe2pbow%253D%253D&type=open.

2. Press Information Bureau, “Report
on India’s Trillion Dollar Digital Opportunity Release”
Feb. 20, 2019, available at: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1565669.

3. Ministry of Corporate Affairs,
“Report of the Committee on Digital Competition Law” Feb.
27, 2024, available at: https://www.mca.gov.in/bin/dms/getdocument?mds=gzGtvSkE3zIVhAuBe2pbow%253D%253D&type=open.

4. Sudipto, “Call For Inputs On
Draft Digital Competition Bill, 2024, Mar. 26, 2024, available at:
https://community.nasscom.in/communities/public-policy/call-inputs-draft-digital-competition-bill-2024.

5. “CCI’s Powers To Penalise On
Global Turnover Basis To Deter Anti-Competitive Ways”, The
Economic Times, Mar. 10, 2024, available at: https://economictimes.indiatimes.com/news/economy/policy/ccis-powers-to-penalise-on-global-turnover-basis-to-deter-anti-competitive-ways/articleshow/108365906.cms?from=mdr.

6. Ministry of Corporate Affairs,
“Report of the Committee on Digital Competition Law”,
Feb. 27, 2024, available at: https://www.mca.gov.in/bin/dms/getdocument?mds=gzGtvSkE3zIVhAuBe2pbow%253D%253D&type=open.

7. Ibid.

8. European Commission, Digital Markets
Act, available at: https://digital-markets-act.ec.europa.eu/index_en.

9. Article 2, Digital Markets Act, https://www.eu-digital-markets-act.com/Digital_Markets_Act_Article_2.html.

10. Ibid.

11. Associated Press, “Europe’s
Digital Markets Act Is Forcing Tech Giants To Make Changes.
Here’s What That Will Look Like”, The Financial Express,
Mar. 6, 2024, available at https://www.financialexpress.com/business/digital-transformation-europes-digital-markets-act-is-forcing-tech-giants-to-make-changes-heres-what-that-will-look-like-3415298/.

12. Alba Ribera Martínez, Kluwer
Competition Law Blog, Sep. 11, 2023, https://competitionlawblog.kluwercompetitionlaw.com/2023/09/11/22-core-platform-services-for-6-gateekepers-the-european-commission-issues-its-preliminary-view-on-the-dmas-designation-process/.

13. IANS, “EU Designates Six Big
Tech Gatekeepers Under DMA, Introduces Provisions For Fines”,
The Economic Times, Sep. 06, 2023, available at: https://economictimes.indiatimes.com/tech/technology/eu-designates-six-big-tech-gatekeepers-under-dma-introduces-provisions-for-fines/articleshow/103431188.cms?from=mdr.

14. Banerjee, Ritarshi, “Youtube
Unveils A New Tool For Disclosure Of Synthetic Media Usage By
Creators”, The Financial Express, available at: https://www.financialexpress.com/business/digital-transformation-youtube-unveils-a-new-tool-for-disclosure-of-synthetic-media-usage-by-creators-3431305/.

15. Reuters, “Apple To Let
Developers Distribute Apps Directly From Their Sites”, The
Economic Times, Mar. 12, 2024, available at: https://economictimes.indiatimes.com/tech/technology/apple-to-let-developers-distribute-apps-directly-from-their-sites/articleshow/108436930.cms?from=mdr.

16. Dougall, Sabrina, “EU Digital
Markets Act Explained“, Checkout.com Blog,
Mar. 8 2024, available at: https://www.checkout.com/blog/checkout-com-explains-the-eu-digital-markets-act.

17. Meta, “Facebook and Instagram to
Offer Subscription for No Ads in Europe”, Facebook Newsroom,
Oct. 30, 2023, available at: https://about.fb.com/news/2023/10/facebook-and-instagram-to-offer-subscription-for-no-ads-in-europe/.

18. Bal, Meghana, “The Draft Digital
Competition Bill 2024 Wields A Sledgehammer Where A Scalpel Is
Required”, The Print, 18 Mar. 2024, available at: https://theprint.in/opinion/the-draft-digital-competition-bill-2024-wields-a-sledgehammer-where-a-scalpel-is-required/2004444/.

19. Ibid.

20. Mathi, Sarvesh,
“Summary: India’s Draft Digital
Competition Bill, 2024″, Medianama, Mar. 14, 2024, available
at: https://www.medianama.com/2024/03/223-summary-draft-digital-competition-bill-2024/.

21. Ibid.

22. Sudipto, “Call For Inputs On
Draft Digital Competition Bill, 2024”, Mar. 26, 2024,
available at: https://community.nasscom.in/communities/public-policy/call-inputs-draft-digital-competition-bill-2024.

23. ET Bureau, ” Big Tech, Few
Indian Entities Oppose Ex-Ante Regulation Under New Law; Others
Lend Their Support”, The Economic Times, Mar. 13, 2024,
available at: https://economictimes.indiatimes.com/news/economy/policy/big-tech-few-indian-entities-opposed-ex-ante-regulation-under-new-law-others-lend-their-support/articleshow/108447933.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst.

24. Ministry of Corporate Affairs,
“Report of the Committee on Digital Competition Law”,
Feb. 27 2024, available at: https://www.mca.gov.in/bin/dms/getdocument?mds=gzGtvSkE3zIVhAuBe2pbow%253D%253D&type=open.

25. Satwant Singh Sawhney v. D.
Ramarathnam, 1967 AIR 1836.

26. Ministry of Corporate Affairs,
“Report of the Committee on Digital Competition Law”
(Feb. 27 2024), available at: https://www.mca.gov.in/bin/dms/getdocument?mds=gzGtvSkE3zIVhAuBe2pbow%253D%253D&type=open.

27. Geoffrey A Manne, “European Union’s
Digital Markets Act not suitable for developing economies,
including India”, The Times of India , Feb. 14, 2023,
available at: https://timesofindia.indiatimes.com/blogs/voices/european-unions-digital-markets-act-not-suitable-for-developing-economies-including-india/.

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