India's Digital Competition Bill: Back to the Drawing Board on Regulating Big Tech

After two years of consultation, India has paused its landmark Big Tech regulation bill for fresh market studies — a reset that reveals how hard it is to write rules for markets that change faster than legislation can.

What the Bill Was Trying to Do The Digital Competition Bill (DCB), first drafted following a 2022 Standing Committee report on anti-competitive practices by large technology firms, set out to do something India's existing competition law structurally cannot: act before harm occurs, rather than after.

India's Competition Act of 2002 is ex-post — the Competition Commission of India (CCI) investigates and penalises anti-competitive conduct only once it has already happened and been proven. The DCB proposed an ex-ante framework instead, modelled loosely on the European Union's Digital Markets Act, that would impose upfront conduct obligations on a defined set of large platforms before any specific harm needs to be demonstrated.

The Bill's central mechanism is the Systemically Significant Digital Enterprise (SSDE) — a designation applied to large platforms operating in defined "Core Digital Services" like online search, app stores, ad tech, operating systems, cloud computing, web browsers, and e-commerce marketplaces, based on financial turnover, user base, and market capitalisation thresholds. Once designated, an SSDE (and any "Associate Digital Enterprise" that helps deliver its core services) would face binding, day-one obligations: no self-preferencing of its own products over third-party competitors, no combining user data across services without consent, no anti-steering rules that block users from cheaper options outside the platform, and mandatory interoperability in certain cases. Penalties for violations could reach 10% of global turnover, alongside potential criminal liability of up to three years' imprisonment for individuals.

Why the Government Hit Pause After more than 100 stakeholder submissions and a public consultation period that closed in mid-2025, the Ministry of Corporate Affairs concluded the draft, in its original form, was "no longer considered fit for purpose." Rather than pushing the Bill forward to introduction, the government has ordered a fresh market study — specifically examining the quantitative and qualitative thresholds used to identify SSDEs, and the list of Core Digital Services the Bill would actually regulate — with the explicit aim of building empirical evidence before locking in a regulatory framework, rather than legislating first and discovering the thresholds don't match market reality afterward.

This reset places India in an interesting middle position internationally. The UK's Digital Markets, Competition and Consumers Act is proceeding more cautiously than the EU's DMA, requiring detailed market studies before designating any firm with "strategic market status" — a path India now appears to be emulating. Japan has moved forward with narrower, mobile-ecosystem-specific ex-ante rules taking effect in phases. South Korea's more ambitious proposal, by contrast, ran into direct pushback from the United States during bilateral trade talks — a reminder that digital-market regulation has become entangled with trade diplomacy and geopolitical alignment as much as domestic competition policy.

The Case for Ex-Ante Regulation Supporters of a strong DCB argue that India's existing ex-post framework is structurally too slow for digital markets, where anti-competitive conduct — self-preferencing in search results, bundling, restrictive app-store terms — can lock in market dominance within months, long before a multi-year CCI investigation could conclude and remedy the harm. By the time an ex-post case resolves, the argument goes, the competitive damage (a rival app store or search engine that never got a fair chance to grow) is often already permanent and irreversible. Proponents also point to the practical reality that a handful of large — mostly US-based — technology companies control critical digital infrastructure that millions of Indian businesses depend on, making upfront rules of the road a matter of market fairness rather than punitive overreach.

The Case Against, and Why the Government Blinked The strongest pushback has come on two fronts. First, critics argue that static, threshold-based rules are a poor fit for dynamic digital markets, where a company's dominance today can evaporate within a couple of product cycles — a framework built around 2024's market leaders risks locking in yesterday's competitive landscape rather than protecting tomorrow's. Second, and more pointedly, critics have flagged that India's SSDE thresholds, as originally drafted, would sweep in companies that aren't conventionally thought of as "Big Tech" at all — a CUTS International analysis found that Indian digital intermediaries like Zomato, Paytm, Meesho, and Nykaa could plausibly meet SSDE criteria despite being domestic growth-stage companies rather than global platform giants. This is the core design flaw the market study is meant to fix: a bill aimed at reining in a small number of dominant multinational gatekeepers was, in its original form, at real risk of instead burdening India's own fast-growing digital economy with day-one compliance obligations designed for a fundamentally different kind of company.

Startup advocates have also raised a more subtle concern — that founders, aware that crossing an SSDE threshold triggers heavy compliance obligations, could face a perverse incentive to deliberately slow growth or avoid scaling past the threshold, precisely the opposite of what a pro-innovation digital policy should encourage.

What the Reworked Bill Is Likely to Look Like Based on the direction of the government's stated review, the likely shape of a revised DCB includes several adjustments: narrower ex-ante duties focused specifically on demonstrated "bottleneck" services — things like default choice screens, fair search ranking, and anti-steering protections — rather than broad, one-size-fits-all conduct rules; commitment-based resolutions tied to time-bound market investigations, letting regulators activate specific obligations only where a pattern of harm actually surfaces rather than assuming it upfront; and clearer rebuttal rights, giving companies flagged as potential SSDEs a formal process to contest the designation with evidence, rather than facing an automatic threshold trigger.

The overall direction is less "abandon ex-ante regulation" and more "narrow it to where the evidence actually points" — sharper thresholds, tighter scope, and a more defensible link between a specific obligation and a specific, demonstrated competitive harm.

Why This Matters Beyond India India's digital economy is large enough, and its market dynamics distinctive enough — dominated by a mix of global platforms and homegrown "super-app" style companies that don't map cleanly onto the US or EU competitive landscape — that how it resolves this threshold question will likely be watched by other large emerging economies weighing similar Big Tech legislation. A framework that successfully distinguishes between genuine multinational gatekeepers and merely large domestic platforms would offer a template other countries currently lack; one that doesn't could become a cautionary example of regulation outpacing the market understanding needed to make it work.

Note on perspective: The Digital Competition Bill remains in pre-legislative consultation with no fixed reintroduction timeline. Reasonable competition-policy experts disagree on how aggressively ex-ante rules should be applied to fast-moving digital markets; this piece reflects the government's own stated reasoning for pausing the Bill alongside criticism from both pro-regulation and industry perspectives, current as of August 2026.