Introduction
The Competition Act, 2002 ("Act") is India's premier (and only) comprehensive competition legislation, spearheaded by the Competition Commission of India ("CCI").
The Act has a wide scope in relation to the subject matter that it governs. However, except for some ex-ante regulations in relation to mergers and acquisitions, the Act functions to implement ex-post enforcement against anti-competitive conduct. While this aligns with traditional international mechanisms to regulate competition, there have been inefficiencies creeping in, primarily due to the growth of digital markets.
The need for an overhaul:
In recognition of the challenges posed by ex-post regulations, the 25th Standing Committee on Finance (2025 – 2026), in its report titled "Evolving Role of Competition Commission of India in the Economy, Particularly the Digital Landscape" ("Standing Committee") emphasized that a successful digital competition regime must strike a delicate balance between preventing market abuse and preserving space for growth.
At the broadest level, the Standing Committee makes three core recommendations. First, it suggests that an ex-ante law be adopted in a phased and evidence-based manner. Second, it calls for the scope of ex-ante regime to be limited to the largest and/or significant platforms, so as to not stifle the work of smaller firms. And third, it stresses the need for various experts within the team of CCI, including the development of specialized technological expertise, acquisition of advanced, analytical tools, and close cooperation with peer regulators. Importantly, the Standing Committee warns against creating obligations that could inadvertently burden start-ups or MSMEs.
Concentration of power in large platforms that serve as intermediaries between consumers and businesses allowing them to design the business environment, set rules for businesses and consumers, and manipulate business outcomes, was highlighted.
The genesis of such a reasoning stems from the fact that these platforms are in a unique position to gather and process large volumes of data, which has the protentional to foreclose competition, and operate in zero-price markets. The inherent nature of these emerging markets is the concentration of power within a short time frame.
CCI's pragmatic approach:
To its credit, the CCI has been quick to adapt. Several decisions have been rendered by the CCI in markets that it had never seen before, such as online messaging apps, online billing services, search engine bias, etc., highlight the resolve and ability of the CCI to deal with emerging markets. The CCI considers non-price factors such as quality, data, innovation, and privacy during ex-post enforcement, but it has become imperative for ex-ante regulations to supplement the CCI's efforts. Some cases of the CCI on 'digital enterprises' are discussed below:
- WhatsApp-Meta: This case is a great example of how the absence of ex-ante regulations can delay meaningful intervention. The CCI found WhatsApp's 2021 privacy policy changes to be potentially abusive as users were forced into take-it-or-leave-it consent terms. However, the order was issued only in November 2024, and the National Company Law Appellate Tribunal ("NCLAT") stayed significant parts of it in January 2025. As a result, the dispute has been caught in procedural loops, leaving users without timely relief. By contrast, in the European Union, where the Digital Markets Act ("DMA") is in force, which is in the nature of ex-ante laws, the European commission was able to act more swiftly. In April 2025, Meta was found non-compliant with the DMA's "pay-or-consent" provisions and was fined, compelling it to alter its practices. This demonstrates that ex-ante regulations can lead to quicker, more decisive actions than lengthy ex-post investigations.
- MakeMyTrip-Goibibo and Oyo: This case presents another example of ex-ante regulation's significance in a fast-evolving digital economy like India. In October 2022, the CCI fined these entities for using wide parity clauses and engaging in exclusionary arrangements. This influenced the market structure with smaller players having lost visibility and bargaining power in the meantime. In contrast, several jurisdictions in the EU have already imposed restrictions upfront, to prevent such actions at the outset. This case shows that ex-ante regulations, if effected in India, could have pre-emptively, banned such clauses and mandated transparent ranking practices before harm materialized.
- Google Play Store: This case highlights shortcomings of ex-post regulations, and its enforcement. In 2022, the CCI penalized Google for tying related practices in Android systems and for mandating its in-app billing system. While the order was partially appealed, remedies have been watered-down through appeals before the NCLAT and now, the Supreme Court. In contrast, under the DMA, "gatekeepers" like Google and Apple are already subject to ex-ante duties that explicitly prohibit anti-steering and require alternative billing options. Here too, ex-ante regulations have provided regulators with stronger and quicker leverage to curb anti-competition conduct.
With the cases taken together, it may be safe to say that reliance on ex-post enforcement has resulted in delayed remedies, extensive litigation, and limited impact on digital markets. In contrast ex-ante framework like the European Union's DMA has allotted regulators to establish clear obligations upfront. While ex-ante measures are not without challenges, they provide a much needed tool to address competition issues in digital markets before they become entrenched.
The draft Digital Competition Bill
The Ministry of Corporate Affairs, basis the Standing Committee on Finance Report dated 22.12.2022, constituted a Committee on Digital Competition Law ("CDCL") which along with its report submitted the draft Digital Competition Bill, 2024 ("DCB") which is an ex-ante legislation specific to large digital enterprises.
The CDCL was of the opinion due to the prevailing market conditions, that the task of pursuing ex post enforcement in relation to digital markets, especially with defining relevant markets, was inefficient. Recognizing this need, the proposed DCB marked a significant shift in India's competition law framework.
Tying/bundling, self-preferencing, abuse of dominance, exclusive agreements, predatory pricing, unfair usage of data etc., are a few specific examples that threaten competition in modern digital markets. The DCB supplements the Act and mandates restrictions on self-preferencing, non-exploitation of data for gaining an unfair competitive advantage, and limits cross-use of customer data. Aimed at safeguarding consumer choice and fair competition, these obligations are not applied uniformly across all players in the digital ecosystem but are limited to those entities that pose structural risks to competition. Essentially, the DCB implements ex-ante regulations by providing a negative list of prohibited activities.
That said, the DCB is not without its challenges. A key concern is the potential chilling effect on innovation. In fast-moving markets, there is a risk that consumer-friendly innovations could be misclassified as anti-competitive, deterring firms from launching products or services. Another risk is the inadvertent recognition of startups and other entities, which may deviate from India's commitment to strengthen its startup ecosystem. Ex-ante regimes such as the DCB enhance regulatory efficiency. By setting behavioural expectations in advance, they reduce ambiguity for businesses, deter potential violations, and reduce litigation. This is particularly relevant in digital markets, where the speed and scale of competitive harm often outpace traditional enforcement timelines. Regulatory obligations, if uniformly applied to startups and large platforms, could ironically strengthen the very incumbents they intend to regulate.
The way forward
The Indian experience with WhatsApp-Meta, MakeMyTrip-Goibibo / Oyo, and Google, demonstrates that ex-post action often comes too late to reverse market tipping. An ex-ante framework, inspired by the clarity of the European Union's DMA and the flexibility of the UK's DMCC regime, could help address the digital market harm in India before it becomes irreversible.
The European Commission adopted Vertical Block Exemption Regulation and guidelines on Vertical Restrains to provide general exemptions from prohibitions set out in Article 101(1) of the TFEU. These provide safe harbour provisions to agreements by essentially pre-approving certain kinds of agreements to ensure transparency and enhancing ease of doing business. A similar block exemption regulation may be adopted in India to not only provide certainty to businesses, but also as a mechanism to reduce litigation and the regulatory workload of the CCI.
Another mechanism we may explore is the introduction of a regulatory sandbox to provide companies with the opportunity to test their innovations with the permission or oversight of the CCI, and work with the regulator in terms of implementation. This would significantly reduce any apprehension regarding innovative agreements in emerging markets and allow the regulator to observe and learn from novel competitive practices.
Some of the other steps may be to introduce summary or fast-track procedures for designated platforms. Instead of full-length enquiries that extend over years, the CCI could adopt fast-track proceedings in ex-ante cases where the obligation is clear, and the facts are straightforward. The CCI should also make smarter use of its Suo Motu powers. It could publish clear trigger conditions for opening ex-ante reviews.
Another option is to introduce advance ruling mechanisms similar to business review letters used internationally where designated firms could voluntarily submit their own ex-ante compliance rule list. The CCI could review this and provide a binding advance opinion within 60 to 90 days. Quarterly compliance certification signed by senior officers would further strengthen accountability. Together these tools could also align with the Standing Committee's call for a targeted ex-ante regime.
While ex-ante regulations offer forward-looking solutions, there remains continued relevance for strategic ex-post interventions. Ex-ante rules should be targeted based on solid evidence, and regular reviews. Simultaneously, it is crucial to strengthen the CCI's capabilities and create a supportive ecosystem for startups and MSMEs. Although the DCB been quick to adopt to the ever-developing digital market of India, the best approach for India is to not pick between ex-ante and ex-post regulations but to interlink them both wherever necessary to make comprehensive amendments to the existing legislation.
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