Digital Competition Law: India

February 16, 2023
Competition Law: Current Regulatory Framework

By Rupin Chopra and Vidhi Oberoi


The Competition Act, 2002 (hereinafter referred to as the “Act”) was enacted to prevent practices having an adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers, and to ensure freedom of trade carries on by other participants in markets in India. The Act basically governs the traditional Indian markets with digital market competition being outside its purview, so far. However, with changing scenarios and the evolution of Digital Markets in India, the Indian Government has felt the need to regulate the market ruled by Big Tech Firms.

India is, thus, ready to follow the European Union for enacting the Digital Markets Act which introduces a variety of prohibitions and obligations on “Big-tech” in order to address concerns about contestability and fairness in the digital economy. New age development in digital markets necessitates the need to regulate competition and prevent anti-competitive practices that might be adopted by firms.

Competition Law: Current Regulatory Framework

The Act defines combinations as the acquisition, merger, or amalgamation of one or more enterprises if they meet certain criteria based on their assets or turnover. Consequently, such combinations meeting the set criteria have to obtain approval from the Competition Commission of India (hereinafter referred to as the “CCI”). Acquisitions in digital markets are value based on data or certain business innovations of the company being acquired. The company to be acquired in such a transaction may not have a large asset base and may be in a line where products/services are given for free. A classic example of such a deal is where Facebook acquired WhatsApp in 2014 for approximately USD 19 billion1. The deal required no clearance form CCI due to low asset base though India being a major market for WhatsApp. Such transactions have a huge impact on the competition and CCI currently lacks the legal framework to evaluate deals that do not fall within the ambit of the stipulated criteria based on assets or turnover.

The Competition (Amendment) Bill, 2022

Indian markets have grown significantly along with the changes in business operations with the rapid emergence of digital internet-based companies. In 2018, the Ministry of Corporate Affairs constituted a Competition Law Review Committee to ensure that the Competition Act is in line with India’s economic fundamentals. The Committee noted that certain market practices are not covered by the current regulatory framework, therefore, in its report, the Committee suggested several suggestions dealing with matters of market competition. The Competition (Amendment) Bill, 2022, (hereinafter referred to as the “Bill”) was proposed after reviewing the recommendations proposed by the Competition Law Review Committee. The Bill seeks to broaden the scope of anti-competitive agreements, evaluate combinations based on the value of transactions, and introduces a settlement and commitment framework to reduce litigation2.

Proposed key features- Digital Competition Bill

  • Regulation of combination based on transaction value – By reinforcing the present prohibition on combinations, the bill expands the definition of combinations to include transactions with a value above INR 2000 crore3. The Bill, thus, proposes to introduce ‘value of transaction’ as criteria for notifying combinations in certain cases like those of digital markets provided that the parties to transactions have ‘substantial business operations in India’.
  • Time limit for approval – Bill reduces the time limit for the CCI to approve a combination from 210 days to 150 days.
  • Settlement and Commitment in anti-competitive proceedings – The Act provides that the CCI may institute proceedings against enterprises on grounds of entering in to anti-competitive agreements or abuse of dominant position. Further, the Bill seeks to add and permit the CCI to close the proceedings if the enterprise offers for: (i) settlements which may involve payment, (ii) or commitments which may be structural or behavioral in nature. The manner and framework of settlement and commitment are to be specified by the CCI itself.
  • Decriminalization of certain offences – The existing provision for fine/imprisonment under the Act by the National Company Law Appellate Tribunal (NCLAT) is proposed to be replaced with the punishment for contempt, in accordance with the provisions of the Contempt of Courts Act, 1971, and the word ‘fine’ is replaced with ‘penalty’.
  • Appointment of Director General – The power to appoint the Director-General by the Commission instead of Central Government has also been proposed.


The Bill is an important step towards developing India’s anti-competitive regime which effectively responds to the changing nature of modern markets. The Bill further provides a logical approach for gatekeeping of anti-competitive practices already prevailing in the market thereby bringing digital markets within the purview of competition law and vis-à-vis provide speedy approvals to transactions that meet the set criteria. The Bill has been framed not only keeping in mind the antitrust violations but also draws inspiration from international laws such as European Union’s Digital Markets Act to regulate anti-trust compliance of large tech-companies in India.


Rachita Thakur, Junior Associate at S.S. Rana & Co. has assisted in the research of this Article.

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