Report of the Committee on Digital Competition Law and Draft Digital Competition Bill: A Look Back

The report of the Committee on Digital Competition Law recommends the introduction of an ex-ante regulatory framework for large digital enterprises in India, to operate alongside the existing ex-post regime under the Competition Act, 2002. The Committee on Digital Competition Law (CDCL) submitted its report to the Union Minister of Finance and Corporate Affairs on 27th February 2024, along with a Draft Digital Competition Bill annexed to it as Annexure IV. The Digital Competition Law report and the Draft Digital Competition Bill were made public on 12th March 2024, with the Ministry of Corporate Affairs (MCA) inviting stakeholder comments until 15th April 2024.

Know what happened next and what’s expected for Digital Competition Law in India.

Background of how the Committee on Digital Competition Law Was Constituted

The Competition Act, 2002 operates on an ex-post basis. It means the Competition Commission of India (CCI) intervenes only after anti-competitive conduct has occurred. The report of the CDCL notes that this framework was designed before the scale of India's current digitalization could be foreseen. More than 759 million active internet users have since given rise to large digital enterprises operating across sectors such as healthcare, financial services, and retail.

Concerns over practices such as opaque search ranking policies and the anti-competitive use of aggregated data led the Parliamentary Standing Committee on Finance to present its 53rd Report on "Anti-Competitive Practices by Big Tech Companies" before the Lok Sabha on 22nd December 2022. That report identified ten predominant anti-competitive practices by large digital enterprises and recommended that their conduct be monitored ex-ante rather than remedied after the fact, along with the introduction of a Digital Competition Act.

Following this recommendation, the MCA constituted the Committee on Digital Competition Law on 6th February 2023. It was tasked with reviewing whether the Competition Act's existing provisions were sufficient to address digital-market challenges. It was further tasked to examine whether a separate ex-ante digital competition law was required. The Committee comprised Dr Manoj Govil (Chairperson), CCI Chairperson Ms Ravneet Kaur, Dr Saurabh Srivastava, Dr Aditya Bhattacharjea, Shri Haigreve Khaitan, Shri Harsha Vardhana Singh, Ms Pallavi Shardul Shroff, and Shri Anand S. Pathak as Members, with Shri Manoj Pandey as Member Secretary.

Key Recommendations in the Report of the Committee on Digital Competition Law

The CDCL report sets out nine principal recommendations:

Introduction of an ex-ante law. The report of the Committee on Digital Competition Law recommends a standalone ex-ante legislation applicable to large digital enterprises, to supplement the Competition Act, so that the CCI can intervene before anti-competitive conduct occurs.
Scope tied to Core Digital Services. The Draft DCB should apply only to a pre-identified list of "Core Digital Services" susceptible to market concentration, drawn up on the basis of the CCI's enforcement experience and global practice, and placed in a Schedule that the Central Government can update.
Regulation based on "significant presence." Only enterprises with a significant presence in a Core Digital Service in India, termed Systemically Significant Digital Enterprises (SSDEs), should be regulated.
A twin-test threshold. SSDE status is to be determined through a "significant financial strength" test (India turnover, global turnover, global market capitalisation, or gross merchandise value) combined with a "significant spread" test (number of end users or business users), with enterprises self-assessing and reporting their status to the CCI. The CCI additionally retains residuary power to designate enterprises that do not meet the quantitative thresholds but can still significantly influence a market.
Associate Digital Enterprises. Where a Core Digital Service is provided by an enterprise that is part of a larger group, other group entities directly or indirectly involved in the same service may also be designated — as Associate Digital Enterprises (ADEs), with the CCI given flexibility to identify the appropriate entities.
Principle-based obligations. Ex-ante obligations under the Draft Digital Competition Bill are to be principle-based, with Core Digital Service-specific detail to be filled in through CCI regulations, and with room for differential obligations depending on an enterprise's business model and user base.
Statutory exemptions. Grounds for exemption from ex-ante obligations should be set out in the statute itself, with the CCI specifying details through regulations, along with a provision similar to Section 54 of the Competition Act allowing the exemption of certain classes of enterprises.
Enforcement architecture. The report of the Committee on Digital Competition Law recommends borrowing the Competition Act's procedural framework, strengthening the CCI's Digital Markets and Data Unit with technical experts, and creating a dedicated bench within the National Company Law Appellate Tribunal (NCLAT) for digital-market appeals.
Penalty structure. Monetary penalties for non-compliance are capped at 10% of an SSDE's global turnover (calculated at the group level where applicable), with the exact quantum to be fixed by the CCI under penalty guidelines, and separate penalties for incorrect reporting and for vicarious liability of key managerial personnel.

Key Provisions of the Draft Digital Competition Bill, 2024

The Draft DCB annexed to the report of the Committee on Digital Competition Law translates these recommendations into statutory language across eight chapters.

Designation thresholds (Section 3)

An enterprise is deemed an SSDE for a Core Digital Service if, in each of the preceding three financial years, it meets a financial threshold, India turnover of at least ₹4,000 crore, global turnover of at least USD 30 billion, gross merchandise value in India of at least ₹16,000 crore, or global market capitalisation of at least USD 75 billion, together with a user threshold of at least one crore end users or ten thousand business users in India. The Commission may also designate an enterprise that does not meet these thresholds, based on factors such as network effects, data-driven advantages, and barriers to entry.

Self-reporting and designation (Section 4)

Enterprises must notify the CCI within ninety days of meeting the thresholds. Designation, once made, lasts for three years and is renewable, and applies equally to Associate Digital Enterprises within the same group.

Anti-circumvention (Section 5)

Enterprises are barred from segmenting or splitting services to avoid crossing the designation thresholds.

Core obligations (Chapter III)

SSDEs are required to deal fairly, transparently, and without discrimination with end users and business users (Section 10);
Barred from self-preferencing their own products or those of related parties over third-party business users (Section 11);
Restricted from using non-public business-user data to compete with those business users, and from cross-using personal data across services without consent (Section 12);
Required to allow installation of third-party applications and user choice of default settings (Section 13);
Barred from restricting business users from steering end users to their own or third-party offers, unless integral to the Core Digital Service (Section 14); and
Barred from tying or bundling other products or services with the Core Digital Service (Section 15).

Inquiry, settlement, and appeals

The Digital Competition Bill:

Empowers the Director General to investigate suspected contraventions (Section 16),
Allows the Commission to pass remedial orders (Section 17), and
Permits settlement (Section 18) and commitment (Section 19) applications by enterprises under inquiry.
Appeals lie to the NCLAT and, thereafter, to the Supreme Court.

Schedule I lists the Core Digital Services covered: online search engines, social networking services, video-sharing platforms, interpersonal communication services, operating systems, web browsers, cloud services, advertising services, and online intermediation services.

Was the Digital Competition Bill Withdrawn?

Industry stakeholders raised objections to the Draft DCB soon after its release in March 2024. Bodies such as the India SME Forum called for the Digital Competition Bill's withdrawal, citing concerns that its ex-ante framework could hurt micro, small, and medium enterprises (MSMEs). It cautioned against transplanting regulatory models from other jurisdictions without adapting them to Indian market conditions. Several Indian digital platforms had separately written to the MCA raising similar concerns, even as some start-ups had earlier expressed support for aspects of the Bill.

The Parliamentary Standing Committee on Finance's 25th Report, presented in August 2025 after reviewing submissions from stakeholders as well as responses from the MCA and the CCI, recommended withdrawing and redrafting the Digital Competition Bill. The concerns flagged in that report included the following:

The Bill's broad scope and rigid ex-ante obligations, which could burden digital platforms without adequate market-specific analysis;
Apprehensions that the framework could deter innovation and foreign investment while raising compliance costs for start-ups and MSMEs;
The absence of thresholds tailored to India's varied market conditions in the proposed SSDE designation, which risked regulatory overreach; and
Potential overlap with other regimes, including the Information Technology Act and sectoral and consumer-protection regulators.

According to the Standing Committee's 25th Report on the Implementation of the Competition Act, 2002, presented to the Lok Sabha on 11th August 2025, the government has for now paused the ex-ante proposal, though a draft Bill continues to exist while the MCA reassesses its thresholds and their potential impact on start-ups and MSMEs, with no fixed timeline for reviving the framework. The Ministry told the Committee that the Bill remains at a stage where the government is working to ensure the draft does not harm India's start-up and MSME ecosystem, even as the MCA Secretary had earlier, in oral evidence to the Committee in April 2025, described ex-ante evaluation of digital-market conduct as necessary to pre-empt the emergence of monopolistic structures.

As things stand, the Draft Digital Competition Bill has not been withdrawn outright but remains paused pending a redrafting exercise informed by the Standing Committee's recommendations, with the CDCL's original report and Annexure IV continuing to serve as the reference framework for any future version of the legislation.