India’s Draft Digital Competition Bill, 2024: Reforming Digital Markets

Policy Update

Tanisha Hooda

Background

The Competition Act, 2002 was enacted to promote fair competition, protect consumer interests, and prevent anti-competitive practices by establishing the Competition Commission of India (CCI). However, the rapid growth of digital platforms, data-driven business models, and technology-based markets exposed limitations in the existing competition framework, which was primarily designed for traditional markets. To address these emerging challenges, the Ministry of Corporate Affairs (MCA) constituted the Competition Law Review Committee (CLRC) in 2018. The Committee submitted its report in 2019, recommending reforms to modernise India’s competition law and make it more responsive to the evolving digital economy.

Recognising the increasing market power of large digital enterprises, the Ministry of Corporate Affairs subsequently constituted the Committee on Digital Competition Law (CDCL) based on the recommendations of the 53rd Report of the Parliamentary Standing Committee on Finance titled Anti-Competitive Practices by Big Tech Companies. The Committee was tasked with examining the need for a separate legal framework for digital markets and recommended an ex-ante regulatory approach to ensure fair, contestable, and competitive digital markets.

Based on these recommendations, the MCA released the Report of the Committee on Digital Competition Law along with the Draft Digital Competition Bill, 2024 for public consultation on 12 March 2024, inviting comments from stakeholders until 15 April 2024. The Draft Bill seeks to establish a dedicated regulatory framework for Systemically Significant Digital Enterprises (SSDEs) to prevent anti-competitive practices before they occur while promoting innovation, consumer welfare, and fair competition in India’s digital economy.

Functioning

The Draft Digital Competition Bill, 2024 has not yet been enacted and, therefore, is not currently in force. As a result, the mechanisms described below represent the proposed implementation framework that would become operational once the Bill is enacted and brought into effect through a government notification.

1. Identification of Core Digital Services (CDS): The Draft Digital Competition Bill focuses only on Core Digital Services (CDS) that are more likely to become concentrated and create competition concerns. Instead of regulating every digital business, it targets services where large platforms can significantly influence the market. The list of these services is prepared using the CCI’s experience, market studies, and global best practices. Since digital markets evolve rapidly, the Central Government can update this list whenever new technologies or services emerge.

2. Identification of Systemically Significant Digital Enterprises (SSDEs): Not every digital company falls under the Bill. Only those enterprises that have a significant presence and influence in the digital market are designated as Systemically Significant Digital Enterprises (SSDEs). The designation is based on factors such as financial strength, market value, turnover, and the number of business and end users. This ensures that the law regulates only large digital players capable of affecting market competition.

3. Self-Assessment and Reporting: The Bill places the responsibility on digital enterprises to assess whether they meet the prescribed thresholds. If they qualify as an SSDE, they must report this information to the Competition Commission of India (CCI) through a simple reporting process. The CCI then verifies the information and officially designates the enterprise as an SSDE. This approach encourages transparency while reducing unnecessary regulatory delays.

4. Compliance with Ex-Ante Obligations: Once designated as an SSDE, the enterprise must comply with a set of ex-ante obligations designed to prevent anti-competitive practices before they occur. Rather than prescribing rigid rules, the Bill lays down broad principles, while the CCI develops detailed regulations for different digital services after consulting businesses, experts, and other stakeholders. This allows the regulatory framework to remain flexible and responsive to changing market conditions.

5. Monitoring and Enforcement by the CCI: The Competition Commission of India (CCI) is responsible for implementing and enforcing the Bill. It monitors compliance, investigates violations, issues interim directions where necessary, and can also encourage settlements or commitments to resolve disputes quickly. To strengthen implementation, the Committee has recommended expanding the CCI’s Digital Markets and Data Unit (DMDU) with technology experts and establishing a dedicated NCLAT bench for faster disposal of digital competition cases.

6. Penalties and Remedies: If an enterprise fails to comply with the obligations under the Bill, the CCI can impose civil penalties and behavioural remedies to restore fair competition. The focus is not only on penalising violations but also on ensuring that digital markets remain transparent, competitive, and beneficial for consumers and businesses. This approach balances effective enforcement with the government’s objective of promoting innovation and ease of doing business.

Performance

Since the Draft Digital Competition Bill, 2024 has not yet been enacted, its direct implementation outcomes cannot be measured through traditional performance indicators. However, the rapid growth of India’s digital economy highlights the increasing importance of establishing a specialised competition framework for digital markets. According to the Ministry of Electronics and Information Technology (MeitY), 2025, India’s digital economy accounted for 11.74% of national income in 2022–23, equivalent to approximately ₹31.64 lakh crore (USD 402 billion).

The report further projects that the digital economy will grow faster than the overall economy and contribute nearly one-fifth of national income by 2030. The Committee on Digital Competition Law (2024) identified challenges arising from digital market concentration, data advantages, and entry barriers, and proposed an ex-ante regulatory approach through the Draft Digital Competition Bill, 2024.

Table: Estimated Contribution of India’s Digital Economy to National Income (%)

Indicator	Value	Year
Contribution of Digital Economy to National Income	11.74	2022–23
Absolute Size of Digital Economy	₹31.64 lakh crore (~USD 402 billion)	2022–23
Projected Contribution to National Income	Nearly 20%	2030

Source: Press Information Bureau (2025), Government of India.

Figure 1 illustrates the projected growth of India’s digital economy’s contribution to national income. The contribution is expected to increase from 11.74% in 2022–23 to nearly 20% by 2029–30, highlighting the growing importance of the digital sector in India’s economy. This rapid expansion strengthens the need for an effective digital competition framework to ensure fair markets, prevent anti-competitive practices, and support sustainable digital growth.

Potential Impact of the Draft Digital Competition Bill, 2024

1. Impact on Digital Platforms (Big Tech Companies): As the Bill is still under consideration, large digital platforms may be required to comply with stricter ex-ante obligations if enacted. The proposed framework seeks to curb practices such as self-preferencing, anti-steering, and misuse of business users’ data, although it may also increase compliance requirements for these enterprises.

2. Impact on Startups and Small Businesses: If implemented, the Draft Bill is expected to create a more level playing field by reducing entry barriers and ensuring fairer access to digital platforms. This may provide startups and MSMEs with greater opportunities to compete against dominant digital enterprises.

3. Impact on Consumers: The proposed framework aims to enhance consumer welfare by promoting greater transparency, wider choices, and protection from unfair digital market practices. However, these benefits will depend on the effective implementation of the legislation.

4. Impact on Innovation: The Draft Bill seeks to balance competition with innovation by preventing anti-competitive conduct while encouraging fair market access. At the same time, stakeholders have highlighted that excessive compliance obligations could affect investment and technological innovation if not implemented proportionately.

5. Impact on India’s Competition Framework: If enacted, the Bill would mark a significant shift from the existing ex-post regulatory approach under the Competition Act, 2002 to an ex-ante framework, enabling the Competition Commission of India (CCI) to address anti-competitive practices before they cause substantial market harm.

6. Overall Policy Outlook: Since the Digital Competition Bill, 2024 remains a draft proposal, its actual impact cannot yet be assessed. Nevertheless, its proposed provisions indicate the government’s intention to strengthen competition, improve consumer welfare, and establish a fairer and more transparent digital marketplace while maintaining a balance between regulation and innovation.

Emerging Issues

Regulatory Uncertainty: As the Digital Competition Bill, 2024 is still in the draft stage, uncertainty exists regarding its final provisions, implementation timeline, and compliance requirements. This makes it difficult for businesses to prepare for the proposed regulatory changes.
Balancing Regulation and Innovation: A key concern is whether stricter ex-ante obligations on large digital enterprises could unintentionally discourage innovation, investment, and the introduction of new digital services if the regulations become overly restrictive.
Compliance Burden on Digital Enterprises: The proposed obligations may increase compliance costs for large digital platforms, requiring them to modify existing business practices, reporting mechanisms, and internal governance systems.
Defining Systemically Significant Digital Enterprises (SSDEs): There are concerns regarding the criteria for identifying SSDEs. Ambiguity in designation thresholds could create uncertainty for businesses and lead to disputes over regulatory obligations.
Institutional Capacity of the Competition Commission of India (CCI): The proposed framework would require the CCI to monitor complex digital markets and technologies. This raises questions about whether the Commission has sufficient technical expertise and institutional capacity to effectively enforce the new framework.
Coordination Among Digital Regulators: The Bill may overlap with existing laws and regulatory authorities, such as those governing data protection and digital services. Without clear coordination mechanisms, overlapping jurisdictions could create regulatory complexity and inconsistent enforcement.

Addressing these challenges requires the Government to finalise the Draft Digital Competition Bill through extensive stakeholder consultations, clear regulatory guidelines, and stronger institutional coordination. A balanced implementation approach will help promote fair competition while ensuring that innovation and investment in India’s digital economy are not adversely affected.

Way forward

The Draft Digital Competition Bill, 2024 reflects India’s proactive approach towards addressing the evolving challenges of the digital economy. Although its actual impact cannot yet be assessed, the proposed framework seeks to promote fair competition, enhance consumer welfare, support innovation, and create a level playing field for businesses operating in digital markets.

Going forward, the successful realisation of these objectives will depend on a balanced and transparent regulatory framework, effective stakeholder engagement, and strengthened institutional capacity. If implemented thoughtfully, the proposed legislation has the potential to contribute to a more competitive, inclusive, and innovation-driven digital ecosystem, supporting India’s vision of Viksit Bharat 2047 and long-term sustainable economic growth.

Additionally, continuous stakeholder consultation with digital enterprises, start-ups, consumers, industry representatives, and civil society will be important to ensure that regulatory obligations remain practical and proportionate. Periodic review of thresholds and obligations will also be necessary due to the rapidly changing nature of digital markets.

If implemented with transparency, accountability, and regulatory flexibility, the Draft Digital Competition Bill, 2024 has the potential to strengthen competition, protect consumer interests, and create a more inclusive and innovation-driven digital ecosystem. This would support India’s broader vision of Viksit Bharat 2047 by promoting sustainable economic growth through a fair and competitive digital economy.

Selected References and Important Links

PRS Legislative Research. (2022). The Competition (Amendment) Bill, 2022. PRS Legislative Research. Available at: https://prsindia.org/billtrack/the-competition-amendment-bill-2022

Ministry of Corporate Affairs. (2024). Report of the Committee on Digital Competition Law. Government of India. Available at: https://www.mca.gov.in/content/mca/global/en/home.html

Press Information Bureau. (2024). MCA Invites Public Comments on Report of Committee on Digital Competition Law and Draft Bill on Digital Competition Law. Government of India, Ministry of Corporate Affairs. Available at: https://www.pib.gov.in/PressReleaseDetail.aspx?PRID=2013947&reg=48&lang=1

Ministry of Electronics and Information Technology (MeitY), Estimation and Measurement of India’s Digital Economy, 2025. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2095260®=48&lang=2

Ministry of Corporate Affairs (MCA), 2024. Report of the Committee on Digital Competition Law (Annexure IV: Draft Digital Competition Bill, 2024, Sections 3–4). Ministry of Corporate Affairs, Government of India https://www.medianama.com/wp-content/uploads/2024/03/DRAFT-DIGITAL-COMPETITION-BILL-2024.pdf

Committee on Digital Competition Law, 2024, Report of the Committee on Digital Competition Law, Ministry of Corporate Affairs, Government of India https://prsindia.org/files/parliamentry-announcement/2024-04-15/CDCL-Report-20240312.pdf

About the Contributor

Tanisha Hooda is a Research Intern at the Impact and Policy Research Institute (IMPRI) and a B.A. (Hons.) Economics graduate from Manav Rachna International Institute of Research and Studies (MRIIRS), Faridabad. Her research interests include competition policy, digital economy, public policy, and economic development, with a focus on analysing the socio-economic implications of emerging policy frameworks.