Digital Competition Bill: Why India Is Adjusting Rules to Target Big Tech While Shielding Domestic Startups
India’s digital economy is undergoing a major regulatory overhaul as the government refines the framework for its proposed Digital Competition Bill. The landmark legislation is designed to prevent anti-competitive behavior and market dominance by tech giants before harm occurs. However, to protect homegrown tech companies from heavy compliance burdens, the Union government is considering raising the financial and user threshold limits.
This proposed adjustment ensures that strict antitrust rules primarily regulate global Big Tech giants—such as Google, Meta, Apple, and Amazon—while preventing domestic tech champions like Zomato, Swiggy, Flipkart, and Ola from facing premature regulatory hurdles.
Here is a clear breakdown of the Digital Competition Bill, how it works, why domestic platforms raised concerns, and what the proposed changes mean for India's digital ecosystem.
What Is the Digital Competition Bill and Why Is It Needed?
Under India's existing Competition Act of 2002, antitrust action is taken after a company has already committed an anti-competitive practice. This traditional model is known as ex-post regulation.
However, digital markets move much faster than traditional industries. Powerful tech platforms benefit from massive network effects, vast consumer data, and multi-service ecosystems. By the time a traditional antitrust investigation concludes—which can take years—a dominant platform may have already permanently driven smaller competitors out of business.
To solve this, the Committee on Digital Competition Law (CDCL) recommended introducing an ex-ante regulatory framework. Instead of waiting for market abuse to happen, the proposed law identifies dominant tech platforms in advance and imposes strict rules on how they operate.
Who Gets Tagged as a Systemically Significant Digital Enterprise?
At the heart of the proposed bill is the concept of a Systemically Significant Digital Enterprise (SSDE). Any company designated as an SSDE will be subject to direct behavioral rules and increased scrutiny from the Competition Commission of India (CCI).
Under the initial 2024 draft bill, a company qualified as an SSDE if it crossed specific financial and user thresholds over three consecutive financial years:
Financial Criteria: ₹4,000 crore turnover in India, $30 billion global turnover, ₹16,000 crore Gross Merchandise Value (GMV) in India, or $75 billion global market capitalization.
User Base Criteria: At least 10 million end-users or 10,000 business users in India.
Additionally, the CCI was granted qualitative powers to classify a firm as an SSDE based on factors like user dependence, market structure, and entry barriers—even if the company did not strictly meet every quantitative financial metric.
Why Indian Tech Companies Pushed Back Against the Original Draft
While the draft bill was intended to curb international tech monopolies, Indian digital companies and industry bodies quickly voiced strong objections.
Domestic leaders like Zomato, Swiggy, Rapido, and Flipkart argued that the initial financial and user thresholds were set too low. Because India has a massive internet population, fast-growing domestic startups can easily hit 10 million users or cross the local revenue metrics while still being relatively young companies. Indian tech founders raised three core concerns:
Heavy Compliance Costs: Meeting complex legal obligations would divert vital funds away from product development, hiring, and expansion.
Stifling Innovation: Being labeled an SSDE too early in a company's life cycle could restrict its ability to launch new services or test new business models.
Level Playing Field Disadvantage: Domestic scale-ups competing against global tech giants with deep pockets would be forced to follow the same restrictive rules meant for trillion-dollar monopolies.
The Proposed Revision: Raising Thresholds to Target Global Gatekeepers
Listening to feedback from domestic industry stakeholders, the government is considering significantly increasing the financial and user threshold limits.
By raising the bar, the government aims to narrow the scope of the Digital Competition Bill. The goal is to ensure the law acts as a targeted leash on global tech gatekeepers while giving Indian digital platforms room to scale up globally before facing heavy regulatory constraints.
What Rules Will Designated SSDEs Have to Follow?
Once a global tech firm is designated as an SSDE, it will have to comply with strict operational conditions:
No Self-Preferencing: Platforms cannot rank or promote their own in-house services or products over competitors on their marketplace.
No Unfair Tying or Bundling: Companies cannot force users or businesses to buy secondary services as a mandatory condition for using their primary platform.
Protection of Business Data: Platforms cannot use private sales data gathered from third-party sellers to launch competing products.
Data Portability and Interoperability: Platforms must allow users to easily transfer their personal data and choose alternative software or payment channels without restrictions.
The Bottom Line
For everyday internet users in India, the Digital Competition Bill represents a balancing act by policymakers.
By adopting an ex-ante model with refined higher thresholds, India aims to protect consumers from global tech monopolies, preserve platform fairness, and ensure that local tech startups can continue to grow, innovate, and generate jobs without being bogged down by premature regulations.
Nikunjj Jhawar is a Chartered Accountant (CA) and Chartered Financial Analyst (CFA) with nearly two decades of experience in the financial services industry. Having worked with global institutions such as HSBC and Credit Suisse in investment-related roles, he brings deep expertise in finance and markets. He is the Founder of mangopeoplenews.com, where he focuses on making complex topics in finance, markets and business accessible and relevant to everyday readers.
