Indian Policy Instruments and Objectives of The Proposed Digital Competition Act Implications Challenges and Way Forward

RESEARCH REPORT
INDIAN POLICY INSTRUMENTS AND OBJECTIVES OF THE

PROPOSED DIGITAL COMPETITION ACT: IMPLICATIONS,
CHALLENGES, AND WAY FORWARD
Research Report
Indian Policy Instruments and Objectives of the

Proposed Digital Competition Act: Implications,
Challenges, and Way Forward
Authors - Saksham Malik, Kamesh Shekar, Bhoomika Agarwal,

Aman Mishra and Vaishnavi Sharma
Copyeditor - Akriti Jayant
Designer - Shivam Kulshrestha
The DialogueTM is a public policy think tank with a vision to drive a progressive narrative in India’s policy discourse.
Founded in 2017, we believe in facilitating well-researched policy debates at various levels to help develop a more
informed citizenry, on areas around technology and development issues. The DialogueTM has been ranked as the
world’s Top 10 think tanks to watch out for, by the Think Tank and Civil Societies Programme (TTCSP), University of
Pennsylvania in their 2020 and 2021 rankings.
For more information

https://thedialogue.co
Suggested Citation
Malik, S., Shekar, K., Agarwal, B., Mishra, A. & Sharma, V. (2024, February). Indian policy instruments and objectives of
the proposed Digital Competition Act: Implications, Challenges and Way Forward. The Dialogue.
Catalogue No
TD/CLP/RR/0124/01
Publication Date
Feb 1, 2024
Disclaimer
The facts and information in this report may be reproduced only after giving due attribution to the authors and The
Dialogue™.
ACKNOWLEDGMENT
This report provides an overview of the criticism. His concern and attitude have
manner in which policy objectives observed enabled us to create this valuable resource
in the Parliamentary Standing Committee on for policymakers, policy-oriented civil society
Finance in its 53rd Report ‘Anti-competitive organisations, and the public.
conduct by big tech companies’ interact with We thank Ms. Akriti Jayant for editing this
the broader policy framework. In conjunction, report. The overall quality of this report
the report also identifies potential challenges benefited significantly from her engagement.
towards harmonising the landscape, parallelly Last but not least, everyone associated with
suggesting means and strategies that would The Dialogue, including friends and relatives,
aid in building synergy. deserves praise. Without their assistance and
We are grateful to Mr. Kazim Rizvi for his direction in this endeavour, this knowledge
supervision, prudence, and constructive product would not have been feasible.
CONTENTS
A. List of Abbreviations i
B. List of Policy Instruments Discussed iii
C. Executive Summary iv
1. Introduction 1
2. Objectives of the proposed DCA and the broader policy framework 4
2.1. Limiting Concentrations and their Effects 4
2.2. Achieving a Level Playing Field/Ensuring Neutrality of Platform 8
2.3. Enhancing Healthy Data Utilisation 11
2.4. Safeguarding End Users 14
2.5. Establishing graded classification for enhanced compliance 17
2.6. Broad overlaps with the objectives of the Proposed Digital India Act 20
3. Broad challenges 21
3.1. Difficulty in Harmonisation 21
3.2. Concerns with Existing Inter-regulatory Coordination Mechanisms 22
3.3. Uncertainty for market players 23
3.4. Demand-side Constraints 23
4. Recommendations and Way Forward 25
4.1. Structured Approach to Harmonisation 25
4.2. Forming Coordination Committees 26
4.3. Calibrated Grievance Redressal 27
4.4. Ascertain the extent of traditional competition frameworks’ sufficiency 27
Indian Policy Instruments and Objectives of the Proposed Digital Competition Act: Implications, Challenges, and Way Forward
A LIST OF ABBREVIATIONS
Abbreviation Full Form
ACP Anti-Competitive Practices
AI Artificial Intelligence
BIS Bureau of Indian Standards
CCI/Commission Competition Commission of India
CDCL Committee on Digital Competition Law
CLRC Competition Law Review Committee
DCA Digital Competition Act
DoCA Department of Consumer Affairs
DMA Digital Markets Act
DMU Digital Market Unit
DPIIT Department for Promotion of Industry and Internal Trade
DRCF Digital Regulation Cooperation Forum
DVT Deal Value Threshold
DSA Digital Services Act
EC European Commission
ECN European Competition Network
EDPS European Data Protection Supervisor
EU European Union
FDI Foreign Direct Investment
FSLRC Financial Sector Legislative Reforms Commission
FSDC Financial Stability and Development Council
IS Indian Standard
ICO Information Commissioner’s Office
M&A Mergers and Acquisitions
MCA Ministry of Corporate Affairs
MeitY Ministry of Electronics and Information Technology
MoUs Memorandum of Understanding
MRTP Monopolistic and Restrictive Trade Practices
MSMEs Micro, Small, and Medium Enterprises
NPCI National Payments Corporation of India
P2B Platform-to-Business Regulation
PSC Parliamentary Standing Committee
PSP Payment Service Provider
RBI Reserve Bank of India
SIDI Systemically Important Digital Intermediaries
SSMI Significant Social Media Intermediaries
SDF Significant Data Fiduciaries
i
S&C Settlements & Commitments

SIDIs Systemically Important Digital Intermediaries
TPAP Third Party App Providers
UPI Unified Payments Interface
UK United Kingdom
VLOPs Very Large Online Platforms
ii
B LIST OF POLICY INSTRUMENTS DISCUSSED

Abbreviation Full Form
Consolidated FDI Policy of 2020 FDI Policy
Consumer Protection (E-Commerce) Rules, E-commerce Rules

2020
Competition Act, 2002 Competition Act
Proposed Amendments to Consumer Draft E-commerce (Amendment) Rules

Protection (E-commerce Rules), 2020
Consumer Protection Act, 2019 CPA
Digital Personal Data Protection Act, 2023 DPDP Act
Information Technology Act, 2000 IT Act
Information Technology (Intermediary IT Rules 2021

Guidelines and Digital Media Ethics Code)
Rules, 2021
Information Technology (Intermediary IT (Amendment) Rules 2022

Guidelines and Digital Media Ethics Code)
Amendment Rules, 2022
Information Technology (Reasonable SPDI Rules

security practices and procedures and
sensitive personal data or information)
Rules, 2011
Competition (Amendment) Act, 2023 Competition Amendment Act
Digital India Act DIA
Personal Data Protection Bill, 2019 PDP Bill
iii
C EXECUTIVE SUMMARY
India has been evolving its efforts to frame existing Indian policy frameworks. In
enabling regulations for the digital landscape, analysing these, the paper maps out broad
with policymakers not only operationalising challenges arising from these overlaps and
but also deliberating on various policy conflicts.
instruments, including legislation, subordinate
regulations, rules, policies, and reports. A Firstly, the paper highlights that harmonizing
significant development in this trajectory is various existing and upcoming policy
the discourse on ex-ante regimes presented instruments applying to the digital landscape
by the Parliamentary Standing Committee on can be challenging, as evidenced by past
Finance (PSC) in its 53rd Report, experiences in resolving jurisdictional
'Anti-competitive conduct by big tech overlaps. Secondly, the paper discusses
companies' (the Report/PSC Report).1 existing mechanisms for establishing
inter-regulatory coordination, such as
The Report identified Anti-competitive inter-regulatory references and Memoranda
practices (ACPs) requiring regulation through of Understanding (MoUs), highlighting their
a proposed Digital Competition Act (DCA). By concerns. It emphasises the lack of reciprocity
regulating these ACPs, the Report aims to fulfil between regulators in the case of
specific regulatory objectives crucial for the inter-regulatory references, where if X
growth of the digital ecosystem. The paper regulatory is obliged to consult Y regulatory
scrutinises how these objectives align with or before framing any regulation, the latter is not
conflict with other policy instruments of the obliged to do the same before framing any
Indian government, leading to potential regulations.
conflicts, overlaps, and contradictions.
After highlighting the challenges with
For instance, a key objective addressed by harmonising policy instruments and
regulating ACPs involves limiting establishing inter-regulatory coordination, the
concentration in digital markets, both paper discusses how these challenges could
generally and in narrower segments like constrain both demand and supply-side
digital advertising. The Indian policy actors. The foremost supply-side challenge
landscape also pursues these objectives emphasized in the paper is compliance
through laws in the realms of competition, uncertainty and the possibility of
financial markets regulation, and Foreign over-regulation. On the demand side, the
Direct Investment (FDI). As a preliminary step, paper points out that the current disjointed
this paper discusses the status quo, exploring approach to grievance management might
the objectives of the Report and their overlaps become confusing and burdensome. Finally,
and conflicts with various proposed and in addressing these challenges, the paper
1.
Standing Committee on Finance (2022-2023), 53rd Report ‘Anti-competitive practices by big tech companies, Ministry of Corporate Affairs
(December 2022), https://loksabhadocs.nic.in/lsscommittee/Finance/17_Finance_53.pdf [hereinfafter “PSC 53rd Report”].
iv
provides key recommendations, advocating

for establishing a structured mechanism for
enabling coordination between relevant
ministries and regulators pre-emptively and
safeguarding future laws like the DCA against
potential overlaps and contradictions.
Setting up of an ‘interim coordination Establishing calibrated hierarchical

council’ consisting of existing regulators grievance redressal mechanism with
and line ministries to ensure alignment horizontal and vertical coordination
between the DCA and the various (between different elements of the
existing and proposed laws system) and agility proofing
Establishing a formal body, that would

Showcasing value o new ex-ante
focus on building a harmonised
framework in terms of how it will
understanding of the digital public
practically reduce the time taken to
sphere and encouraging regulatory
tackle anti-competitive harms.
coordination at enforcement level
Figure (i): Means to Establish Harmonisation
v
1 INTRODUCTION
In India, the discourse on developing an presentation of search results on platforms.
ex-ante regime initiated with the publication
of the 172nd Report on 'Promotion and The Report advocates for the prohibition of
Regulation of E-commerce in India' by the certain ACPs ex-ante through a new Digital
Standing Committee on Commerce Competition Act (DCA), rather than relying on
(Commerce Committee) in June 2022.2 ex-post facto regulation under the existing
Following that, the Parliamentary Standing Competition Act. All the ACPs listed below are
Committee on Finance (PSC) released the recommended for prohibition, except for
53rd Report on 'Anti-competitive conduct by anti-competitive transactions. For these
big tech companies.' This report transactions, the Report proposes mandatory
recommended strengthening the competition notification to the Competition Commission of
framework through an ex-ante regulatory India (CCI), regardless of whether they are
approach, involving the identification of notifiable under the Competition Act. The
gatekeepers and the imposition of specific table below provides straightforward
obligations. These Anti-competitive practices explanations of these ACPs to enhance
(ACPs) span various areas, including understanding. It also includes examples of
transactional practices like mergers and equivalent conduct in physical markets to
acquisitions (M&As), data practices, and the offer a more informed perspective.
ACPs Parallel example in physical markets
1. Anti-Steering Provisions: App stores In a food court, a consumer is made to pay for
prevent app developers from offering modes a food order using only the food court’s
of payment to end-users other than the ones rechargeable cards instead of the restaurant’s
provided by the store. own payment interface.
2. Pricing/Deep Discounting: E-commerce A tea manufacturer incurs a cost of Rs. 50 per

sites offer huge discounts and often packet, and supplies the same to a
below-cost pricing in a non-transparent supermarket at an MRP of Rs. 70. The
manner. As a result, the ability of sellers to supermarket offers a discount of 50% on the
decide prices and make profits is impaired. MRP, leading to a loss of profit and authority to
decide prices for the manufacturer.
3. Self-Preferencing: Platforms perform dual A general store sells both its own private label
roles, i.e., of a marketplace and also of a brand of coffee and also sells coffee of other
2.
Parliamentary Standing Committee on Commerce, Promotion and Regulation of E-Commerce in India, Parliament of India, 172nd Report
(June 15, 2022), https://prsindia.org/files/policy/policy_committee_reports/SCR_e-commerce.pdf.
1
seller listing their products or services on the brands. The store deliberately places its own
platform. products near the front counter, while placing
other products of other brands at the end of
the aisle.
4. Exclusive Tie-ups: Platforms enter into A shoe manufacturer enters into an
agreements with brands to sell the latter’s agreement with a chain of shoe stores,
products exclusively on the platform. wherein the manufacturer agrees to sell its
product exclusively through this chain of
stores.
5. Bundling and Tying: The use of the A printer company imposes a condition that to
platform’s core service is conditioned on the buy the printer, consumers will have to
purchase of another subsidiary service. necessarily buy a packet of printer ink along
with it.
6. Search and Ranking Preferencing: Digital A travel company publishes a print catalogue
companies rank certain results higher on the of the best and highest-ranked hotels in the
results page, due to bias in favour of city. The company puts its own subsidiary
sponsored results or self-fulfilled products. hotels on the first page while relegating other
hotels to the last page of the pamphlet.
7. Data Usage: Market leaders amass a A customer submits his phone number on the
hoard of personal data over time, leading to purchase of a clothing product from a store.
tracking, profiling, and leveraging of data to The store combines this information with the
strengthen their position in the primary and customer’s email address, collected through
allied markets. its partner brands in their stores, and uses it to
regularly communicate ongoing offers.
8. Restricting third-party applications: Users An automobile manufacturer modifies the

are restricted from the installation and internal mechanics of its cars to ensure that it
effective use of third-party applications. is not possible for the consumer to install
accessories like a music player belonging to a
third-party company.
9. Anti-competitive transactions: Large firms The business of an established fast-food

buy startups, with the intention to disallow restaurant is reduced due to customers
them from growing, without being subjected buying from a new, small eatery nearby. To
to merger control scrutiny. avoid competition, the restaurant buys the
eatery.
10. Advertising Policies: Companies engage A newspaper company gives more

in the consolidation of the digital advertising advertisement space and better prices in its
supply chain, leading to market daily publication to the products or services of
concentration, self-preferencing, and conflict its subsidiary logistics company, compared to
of interest. the ads of other logistics businesses.
2
Since then, numerous developments have more detail and drafting a law. The following
occurred, including the establishment of the offers a broad overview of significant
Committee on Digital Competition Law developments on the subject:
(CDCL), tasked with analysing the subject in
The Commerce Committee

The Finance Committee’s 53rd
recommends the formation of
report recommends a new
a Digital Markets and Data Unit
ex-ante law, i.e., the DCA.
(DMDU).
December 2022 March 2023
June 2022 February 2023 2024
The commerce Committee’s CDCL is constituted by the MCA

CDCL is expected to release its
report recommends an updated to examine the subject and draft
report and the draft bill.
framework for digital markets a Digital Competition Bill.
Figure (ii)
The PSC Report has identified 10 ACPs that, in conflicts, and other potential implications in
its opinion, necessitate a new ex-ante the broader regulatory landscape and other
regulation, i.e., the DCA. Through these ACPs, policy instruments of the country. The analysis
the Report aims to achieve key objectives, aims to inform the efforts of policymakers,
such as limiting concentration and its effects, including the CDCL, the CCI, and relevant
ensuring a level playing field/neutrality of the central ministries. To this end, the paper
platform, promoting healthy data utilization, analyses a few challenges presented by
safeguarding user interests, and establishing these overlaps and conflicts, along with
graded classification for enhanced providing recommendations that
compliance. This research paper discusses policymakers may consider for their
these objectives to highlight their overlaps, resolution.
3
2 OBJECTIVES OF THE PROPOSED DCA AND

THE BROADER POLICY FRAMEWORK
In this chapter, we will delve into various The PSC Report addresses the issue of
policy initiatives taken by the government to concentration by examining the practice of
achieve objectives similar to those larger digital firms acquiring highly valued
highlighted in the PSC Report. We will further start-ups without being subject to merger
examine how the measures proposed by the control rules. The Report asserts that this
PSC Report address overlaps, conflicts, or practice hinders smaller firms from growing
complement other policy instruments. While beyond a specific point.5 Additionally, the
the government charts its course through substantial flow of data from the acquired
various policy instruments, including digital firm may confer competitive
suggested measures to address ACPs, our advantages upon acquiring large digital
paper underscores that the ultimate technology firms. As data is the driving force
objectives of these instruments may align or in the digital economy, the Report further
be contradictory. Thus, by highlighting this underscores concern regarding monopolistic
congruence at the objective level, the paper control over data.6
underscores the need to establish
inter-regulatory coordination for Lastly, the Report expresses concerns about
harmonisation and consensus building at the increasing market concentration,
policy instruments level. consolidation, and integration across various
levels of the supply chain in the digital
2.1. LIMITING CONCENTRATIONS AND THEIR
advertising market.7 It proposes measures to
curb the anti-competitive effects of
EFFECTS concentration by mandating notifications by
Systemically Important Digital Intermediaries
According to the PSC Report, the digital (SIDIs) to the Competition Commission of
landscape has recently witnessed an India (CCI) regarding their merger and
increase in market concentration, raising acquisition activities.8 Additionally, it seeks to
concerns about fair competition and address the effects of data monopolization by
consumer welfare.3 Insufficient competitive prohibiting the cross-usage of data and the
pressures in the market may impact combination of data from different sources,
innovation, consumer choice, and heighten such as business users and other services of
dependency of downstream players. the SIDIs. Finally, it aims to democratize
Moreover, it is believed that mergers access to data in the digital advertising sector
involving digital platforms can elevate the risk to counter the effects of monopolization and
of a platform consolidating its power.4 recommends specific prohibitions on the
3.
PSC 53rd Report.
4.
Kanter, J. S. (2023). Digital markets and ‘trends towards concentration.’ Journal of Antitrust Enforcement, 11(2), 143–148
https://academic.oup.com/antitrust/article/11/2/143/7232385.
5.
PSC 53rd Report, Pg. 8.
6.
7.
8.
PSC 53rd Report, Pg 33.
4
usage of end-user data.9 enterprises or mergers exceeding specified

threshold limits is considered a 'combination',
It is noteworthy that the efforts of the PSC and necessitating notification to the Competition
competition policymakers to tackle Commission of India (CCI). The CCI has also
concentration or its effects in digital markets implemented a 'Green Channel' scheme,
follows similar pre-existing initiatives. For a streamlining the approval process for
considerable amount of time, India has had combinations by providing deemed approval
sector-agnostic and sector-specific laws that for those lacking an appreciable adverse
extend beyond digital markets, often with effect on competition. The Green Channel
similar or conflicting objectives. scheme ensures a swift, transparent, and
accountable review of combination cases.15
Indian policymakers have sought to curb The CCI's annual Report of 2021-22 indicates
concentration and its effects for long, with the the successful adoption of the Green Channel
first notable effort being the Monopolistic and scheme, with 52 cases received under it
Restrictive Trade Practices Act (MRTP Act).10 since its introduction. The report further notes
The MRTP Act aimed to prevent that one out of four notices filed before the
concentrations or dominance by mandating CCI in 2021-22 was under the Green Channel
approvals for corporate restructuring or scheme.16
takeovers by enterprises with assets
exceeding INR 20 crores.11 The law further This underscores the commendable effort of
identified dominant undertakings based on a the CCI in streamlining the combination
fixed criterion, considering enterprises with process, promoting ease of doing business,
assets over INR 1 crore as automatically and limiting anti-competitive conduct in the
dominant.12 The perspective of the Indian market. Furthermore, the Competition
competition landscape on concentration has (Amendment) Act 2023 (Competition
evolved from the time of the MRTP Act to the Amendment Act) introduced the concept of
current Competition Act,13 transitioning from Deal Value Threshold (DVT), stipulating that
an approach that discourages dominance to transactions crossing the value threshold of
one that nurtures and promotes competition INR 2000 crores, even if they do not meet
while prohibiting the "abuse" of dominance.14 existing asset and turnover thresholds, must
be notified to the CCI. The CCI's submissions
Presently, the Competition Act seeks to limit to the PSC emphasize that, given the
the anti-competitive impact of mergers and asset-light nature of digital markets, the deal
acquisitions through its merger control value threshold will enable capturing more
regime. According to Section 5 of the
Competition Act, any acquisition of
9.
10.
Yadav, Dr. R. K. (2016). Competition Law in New Economy (first). Jagan Nath University Pg. 21
https://deliverypdf.ssrn.com/delivery.php?ID=48108512411110311209709212101812606410403509002900101011000111609211809809609011
811304100000806005105811011709010706910608811806008300500107409809112209400208601502304706408500511401502600002
7020081124118092103067076087065105009092125074117112117007098&EXT=pdf&INDEX=TRUE.
11.
The Monopolies and Restrictive Trade Practices Act,1969,
https://www.indiacode.nic.in/repealed-act/repealed_act_documents/A1969-54.pdf.
12.
The Monopolies and Restrictive Trade Practices Act,1969,
https://www.indiacode.nic.in/repealed-act/repealed_act_documents/A1969-54.pdf.
13.
Competition Act,2002, (14/01/2003) https://www.mca.gov.in/Ministry/actsbills/pdf/The_competition_Act_2002.pdf.
14.
Competition Act,2002, (14/01/2003) https://www.mca.gov.in/Ministry/actsbills/pdf/The_competition_Act_2002.pdf.
15.
Competition Commission of India. (n.d.). Green Channel. https://www.cci.gov.in/combination/green-channel-view.
16.
Competition Commission of India, Annual report 2021-22, Page no. 17
https://www.cci.gov.in/public/images/annualreport/en/annual-report-2021-221671704224.pdf.
5
combinations in these markets.17 Payments Interface (UPI) were established to

encourage new players, fostering increased
The enhanced deal value threshold criteria market share and mitigating risks in the UPI
introduced through the Competition ecosystem.
Amendment Act potentially aligns with the
objectives of the 2002 Act's traditional As per the guidelines, “Payment Service
merger control framework, aiming to prevent Provider (“PSP”) and each TPAP should
concentration in digital markets. It mandates ensure that the total volume of the
the notification of transactions that were transactions initiated through the TPAP shall
previously not required to be reported to the not exceed 30% of the overall volume of
Competition Commission of India (CCI). The transactions processed in UPI, during the
sector-agnostic nature of the framework preceding three (3) months (on a rolling
equally encompasses digital markets, offering basis)”.20 This rule imposes a cap on the
a potential avenue to achieve the objectives volume of UPI transactions that any payment
outlined in the Parliamentary Standing service provider can initiate to a threshold of
Committee's (PSC) report without unduly 30%. Therefore, concerning the restriction of
escalating merger notifications from certain powers held by a select few digital market
technology companies. Introducing players, including those in the digital payment
mandatory notifications, as suggested by the markets, the UPI Guidelines might overlap
report, within the existing traditional with the recommendations of the PSC Report.
competition framework, bolstered by the deal
value threshold, might impose increased In the realm of e-commerce, FDI policies play
compliance strain18 and affect startup a pivotal role in shaping market dynamics.
funding.19 These policies aim not only to attract
investment but also to stimulate technical
Addressing the objective of limiting innovation, fuel economic growth, and
concentration, as emphasized in the PSC generate employment opportunities. The
report, the Reserve Bank of India (RBI) and essence of FDI policies lies in striking a
National Payments Corporation of India harmonious balance between encouraging
(NPCI) are actively involved in managing international investment and safeguarding
concentration in the digital payments market. the nation’s economic interests. In the FDI
The current status regarding whether the Policy, paragraph 5.2.15.2.4, Subsections iv
proposed Digital Competition Act (DCA) will and v, provide a directive that is particularly
directly or indirectly regulate the financial pertinent to the digital age.21
payments sector remains uncertain. The
Guidelines on volume cap for Third Party As per the FDI policy, e-commerce platforms
Application Providers (TPAP) in Unified operating as marketplaces are explicitly
17.
18.
Portuese, A. (2022, August 24). The Digital Markets Act: A Triumph of Regulation Over Innovation.
https://itif.org/publications/2022/08/24/digital-markets-act-a-triumph-of-regulation-over-innovation/.
19.
Berre, M. (2020). Killer Acquisition Theory in the Digital Age. Audencia Business School; Université de Lyon.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3788536.
20.
Standard Operating Procedure (SOP) – Market Share Cap for Third Party Application Providers (TPAP). (2021, March 25).
https://www.npci.org.in/PDF/npci/upi/circular/2021/standard-operating-procedure-sop%E2%80%93market-share-cap-for-third-party-applicati
on-providers-tpap.pdf.
21.
Consolidated FDI Policy Circular of 2020 (Policy Circular DPIIT File Number 5(2)/2020; p. 50). (2020). Government of India Ministry of
Commerce & Industry Department for Promotion of Industry and Internal Trade (FDI
Division).https://dpiit.gov.in/sites/default/files/FDI-PolicyCircular-2020-29October2020_0.pdf [hereinafter “FDI Policy”].
6
prohibited from having ownership or control treatment of all participants. In the

over the inventory of goods. This provision e-commerce market, vertical integration can
ensures that these platforms remain neutral potentially lead to market power
intermediaries rather than performing a dual concentration by combining production
role with undue control over the market. stages under one entity, resulting in the
Furthermore, there is a directive against potential exclusion of rivals and distortion of
e-commerce entities mandating any seller to competition. This focus of the FDI policy on
exclusively sell products on their platform. preventing vertical integration aligns with the
This promotes a level playing field and objectives of the PSC Report. The PSC Report
ensures that sellers have the freedom to and the FDI policy both imply negative
choose multiple platforms for their offerings. impacts that excessive concentration has on
This further aims to maintain these platforms market dynamics and stress the significance
as impartial intermediaries, eliminating the of creating a level playing field that is fair to all
possibility of undue control that could lead to market players.
market concentration. Moreover, to ensure
compliance with these guidelines, Therefore, through these provisions, the FDI
e-commerce entities with FDI must obtain and policy ensures that the e-commerce
maintain a report from a statutory auditor landscape remains competitive, preventing a
every year.22 scenario where a few major foreign firms
dominate the market and encouraging local
The entry of foreign entities may also entrepreneurship. This aligns with the
heighten concentration levels in host-country broader objective of FDI policies, which is to
markets, potentially harming competition.23 promote balanced economic development
Furthermore, point ix of the FDI policy while preventing market monopolization by a
paragraph 5.2.15.2.4 aims to ensure a select few. The objectives outlined in the FDI
competitive and level playing field by policy, particularly concerning e-commerce,
prohibiting e-commerce entities from share similarities with the recommendations
influencing sale prices and requiring the fair made in the PSC Report. Both the PSC Report
provision of services to vendors.24 It further and the FDI policy aim to ensure a
states that any provision of services to a competitive and fair marketplace, limit the
vendor under terms not extended to other concentration of power, and promote a level
vendors facing similar circumstances is playing field for all players in the market.
deemed unfair and discriminatory, reinforcing
the commitment to a competitive and Therefore, the objectives and concerns
impartial marketplace.25 This commitment not related to market concentration mentioned
only promotes a level playing field but also under the PSC Report potentially overlap with
actively contributes to cultivating a market certain objectives of frameworks like the
environment where healthy competition Competition Amendment Act, the UPI
flourishes, preventing concentration through guidelines of NPCI, and the FDI policy. The
vertical integration and ensuring equitable DVT is a proactive measure in curbing
22.
FDI Policy.
23.
Foreign Direct Investment for Development MAXIMISING BENEFITS, MINIMISING COSTS. (2002), Pg.16 of the PDF. [Overview].
https://www.oecd.org/investment/investmentfordevelopment/1959815.pdf
24.
FDI Policy.
25.
FDI Policy.
7
concentration as an anticompetitive impact of arose regarding fair and unrestricted access,

combinations. Likewise, the existing UPI leading to the evolution of the 'net neutrality'
guidelines aim to impose volume caps for principle. Initially applied to network
TPAP to foster competition by curbing market communications, 'net neutrality' advocates for
concentration. Similarly, the FDI policies the equal and unbiased treatment of internet
governing the e-commerce sector, prohibiting communications by service providers.27 Over
inventory control and endorsing fair practices time, the need for neutrality expanded to
by e-commerce players, further reinforce the various aspects of the digital space. In recent
objective of having a level playing field. times, the emergence of the platform
Therefore, these frameworks collectively economy has reignited concerns about
serve as a deterrent against concentration by establishing a fair, neutral environment,
dominant firms, echoing the objective of the particularly when a few dominant players
PSC Report to promote a competitive market control various stages of the supply chain.28
and limit concentration.
Platforms not only facilitate the exchange of
In conclusion, it is pertinent to harmonise content and ideas but also empower
these frameworks to mitigate the risk of individuals to monetise their services and
potential overlaps between them. A unified products, allowing businesses to establish
regulatory approach in India not only ensures their presence.29 However, concerns arise
consistency and clarity but also enhances the when platforms, acting as intermediaries,
efficiency of oversight for the government by selectively adjust their decisions on ranking,
fostering an environment promoting visibility, user choices, and other criteria
innovation, fair competition, and growth in a crucial for downstream players and
coordinated fashion. The result can be a consumers. For instance, a platform
well-integrated and responsive framework mandating users to make payments
that safeguards the interests of consumers exclusively through a specific operator
and businesses while prohibiting potentially restricts users' choice.30 Similar
concentration. concerns emerge when platforms expand
their role beyond mere intermediaries. For
2.2. ACHIEVING A LEVEL PLAYING example, a food aggregator app operating its
cloud kitchens may raise concerns about the
FIELD/ENSURING NEUTRALITY OF PLATFORM platform's neutrality concerning the listing of
other restaurants compared to its outlets.31
The ongoing discourse in digital regulation Being in a position of strength, the platform
centres around the concept of neutrality.26 As can potentially manipulate rankings to
the internet gained widespread use, concerns prioritise the visibility of its outlets.32
26.
Hsing Kenneth Cheng, Subhajyoti Bandyopadhyay and Hong Guo. (n.d.). The Debate on Net Neutrality: A Policy Perspective [Warrington
College of Business Administration University of Florida]. https://business.purdue.edu/academics/MIS/workshop/papers/sb_020907.pdf.
27.
Tim Wu, Network Neutrality, Broadband Discrimination, 2 J. ON TELECOMM. & HIGH TECH. L. 141 (2003).
https://scholarship.law.columbia.edu/faculty_scholarship/1281 Network Neutrality, Broadband Discrimination.
28.
Platform Neutrality Building an open and sustainable digital environment (Opinion no. 2014-2). (2014). French Digital Council.
https://cnnumerique.fr/files/uploads/2014/06/PlatformNeutrality_VA.pdf.
29.
Strowel A., Wouter V. Digital Platforms: To Regulate or Not to Regulate? (2016),
https://ec.europa.eu/information_society/newsroom/image/document/2016-7/uclouvain_et_universit_saint_louis_14044.pdf.
30.
XYZ Vs. Alphabet Inc. And Others, Case No. 07 of 2020 (COMPETITION COMMISSION OF INDIA September 11, 2020).
https://www.cci.gov.in/antitrust/orders/details/71/0.
31.
National Restaurant Association of India (‘NRAI’) Vs. Zomato Limited (‘Zomato’) & Others, Case No. 16 of 2021 (COMPETITION
COMMISSION OF INDIA January 1, 2022). https://www.cci.gov.in/antitrust/orders/details/6/0 [hereinafter “NRAI v. Zomato”]
32.
Padilla, J., Perkins, J., & Piccolo, S. (2022). Self‐Preferencing in Markets with Vertically Integrated Gatekeeper Platforms*. The Journal of
Industrial Economics, 70(2), 371–395. https://doi.org/10.1111/joie.12287 https://onlinelibrary.wiley.com/doi/full/10.1111/joie.12287.
8
In addressing concerns surrounding platform fairly and equally, but also provide fair and
neutrality, the PSC Report aims to rectify reasonable access to data for business users
practices that jeopardise the creation of a level regarding how people search, click, and view
playing field and hinder non-discriminatory results.39
access for all participants.33 Self-preferencing,
as highlighted in the PSC Report, can Similarly, e-commerce platforms are
significantly diminish the profitability of recommended to grant businesses access to
downstream players, resulting in an unfair certain types of data to level the playing field
advantage for the platform.34 Similarly, with platforms that use extensive data to
anti-steering limits the seller's ability to direct enhance their products. By providing equal
end-users to other channels, hindering sellers access to data, smaller businesses or new
from building a robust consumer base.35 entrants can also access crucial data to
compete effectively and innovate within the
The PSC Report references the CCI's prima ecosystem, allowing fairer competition to be
facie order against Apple Inc., where the achieved.40
company's restrictions on third-party apps in
its app store were noted to result in a denial of Another positive obligation recommended by
market access for app store developers.36 the Report includes interoperability.41
Simultaneously, the bundling and Interoperability allows multiple platforms to
pre-installing of products and services on communicate, allowing users to access
smartphones by Android OS provided an services and data more freely. It also fosters a
unfair advantage to the detriment of other level playing field for businesses, enabling
apps.37 The PSC Report observes that these them to operate across multiple platforms
practices distort the level playing field, without facing unfair restrictions. This reduces
favouring certain players with significant the dominance of any single platform and
market power.38 allows even nascent companies to grow. By
enforcing these prohibitions and promoting
Consequently, the Report has recommended practices like data sharing, the PSC Report
certain prohibitions and positive obligations. In seeks to create platform neutrality in a broader
addition to outright prohibiting certain sense. This neutrality ensures that all players,
practices like anti-steering and whether big or small, have equal opportunities
self-preferencing, the Report has prescribed to compete and succeed without any undue
specific requirements in the form of advantage or discrimination, ultimately
transparency and disclosures to strive for benefiting consumers with more choices and
creating a level playing field for other players. better services.
For instance, the it suggests that search
engine platforms should not only refrain from In India, various efforts in the form of policies
showing any preference for certain and regulations have been made to achieve a
businesses over others, treating all businesses similar objective, i.e., to promote neutrality in
33.
PSC 53rd Report.
34.
PSC 53rd Report.
35.
PSC 53rd Report.
36.
PSC 53rd Report.
37.
PSC 53rd Report.
38.
PSC 53rd Report.
39.
PSC 53rd Report.
40.
PSC 53rd Report.
41.
PSC 53rd Report.
9
digital markets. For instance, overlaps exist in marketplace e-commerce entities to follow.
the realm of consumer protection, considering These rules mandate that marketplace entities
the framework’s objective. The consumer must not use any information collected
protection law and policy aim to ensure through their platforms to provide unfair
consumer welfare and safeguard consumers advantages to their related parties or
from unfair practices, misinformation, and associated enterprises.44 Furthermore, they
harm in the marketplace. This underscores the must ensure that none of their related parties
importance of platform neutrality as it avoids or associated enterprises are enlisted as
bias, favouritism, and information direct sellers to consumers.45 Additionally, the
manipulation. It further fosters an environment rules explicitly prohibit e-commerce entities
where customers can make informed from manipulating search results or search
decisions with clarity and a variety of choices. indexes in a way that deceives users.46 By
implementing these rules, the government
The Ministry of Consumer Affairs, Food, and aims to prevent any background
Public Distribution notified the Consumer arrangements or practices that could result in
Protection (E-Commerce) Rules, 2020, to the preferential treatment of specific sellers or
safeguard consumers from unfair trade entities, reinforcing platform neutrality.
practices in the e-commerce industry. Some
practices aimed to be regulated by an ex-ante Another policy area with similar objectives is
law are already under regulation or proposed the FDI regime. FDI policies aim to attract
to be regulated under these consumer policy capital, promote economic growth, and create
frameworks. For example, the E-Commerce job opportunities while balancing national
Rules mandate that every marketplace interests. In the e-commerce sector, FDI
e-commerce entity discloses any policies play a crucial role in maintaining
differentiated treatment it offers to goods, platform neutrality. The FDI policy addresses
services, or sellers of the same category in its the e-commerce sector, ensuring that
terms and conditions.42 Furthermore, the rules foreign-funded online marketplaces do not
require e-commerce platforms to provide clear engage in unfair practices, such as mandating
and transparent information about products, sellers to exclusively sell their products on
services, and sellers to consumers.43 This their platforms.47 However, certain aspects of
ensures that consumers can make informed the FDI Policy might overlap with the proposed
decisions, and all sellers have an equal ex-ante frameworks.
opportunity to showcase their offerings.
Additionally, the draft amendment to the For instance, the proposed ex-ante
E-Commerce Rules aims to further strengthen frameworks aim to promote neutrality and
platform neutrality. equal opportunities for all sellers on
e-commerce platforms by seeking to regulate
The Draft E-commerce (Amendment) Rules self-preferencing. The FDI Policy contains
introduce additional requirements for provisions to regulate the participation of
42.
F(G.S.R. 462(E).—In Exercise of the Powers Conferred by Sub-Clause (Zg) of Sub-Section (1) of Section 101 of the Consumer Protection Act,
2019 (35 of 2019), 2020, E-Commerce Rules, Rule 5(4), https://consumeraffairs.nic.in/sites/default/files/E%20commerce%20rules.pdf
[hereinafter “Consumer Protection (E-Commerce) Rules”].
43.
Consumer Protection (E-Commerce) Rules, Rule 5(3).
44.
F(G.S.R. 462(E).
45.
Draft E-commerce (Amendment) Rules, Rule 6(6)(b).
46.
Draft E-commerce (Amendment) Rules, 5(14)(c).
47.
FDI Policy, Para 5.2.15.2.4 (xi).
10
entities in e-commerce marketplaces. Restaurant Partners, covering both private

According to these provisions, if an entity has brands and those operating through cloud
equity participation from an e-commerce kitchens. During the investigation, the CCI
marketplace entity or any of its group identified arrangements where preferential
companies, or if the marketplace entity treatment was given to specific entities within
exercises control over the inventory of that this vertical relationship.53 Additionally,
entity, then the said entity is prohibited from practices of self-preferencing were scrutinized
selling its products on the platform operated under section 3(4) of the Competition Act.
by the marketplace entity.48 The primary
objective behind these provisions is to ensure The PSC Report's proposal to ban
a level playing field and platform neutrality, self-preferencing overlaps with the objectives
where no entity is given preferential treatment of the FDI Policy, Competition Act, and
or unfair advantage based on its relationship E-commerce Rules. While each regulatory
with the marketplace entity or its affiliates. body has its specific objectives and focus
areas, the multitude of regulations introduced
The existing competition framework has by various authorities can potentially lead to
recently been employed to ensure neutrality in compliance overburden. Furthermore,
digital markets. Competition law, with its multiple regulations targeting the same
overarching goals of promoting and objective may create complexities for
maintaining fair competition, safeguarding concerned stakeholders, including sellers and
consumer interests, and ensuring freedom of platforms in the realm of digital markets.
trade, aligns with the objective of neutrality. A
level playing field and the prevention of bias in 2.3. ENHANCING HEALTHY DATA UTILISATION
markets and platforms are crucial for
upholding fair competition and safeguarding Recognising that nothing comes for free in
consumer interests. the platform economy, as payment is made in
the form of personal and mixed data, the PSC
Various cases have arisen where the Report discusses how data processing may
Competition Commission of India (CCI) raise competition concerns. A previous
analysed the issue of preferencing to achieve market study54 conducted by the CCI
neutrality objectives, spanning markets for discussed the relevance of data processing
app stores,49 online goods,50 online travel,51 and privacy in competition regulations. The
and operating systems.52 For example, in the CCI's responsibility is to prevent practices
case of National Restaurant Association of with adverse effects on competition and
India v. Zomato Limited and Bundl sustain healthy competition in the market.
Technologies Private Limited ('NRAI v. With the emergence of digital markets,
Zomato'), the CCI investigated the relationship applying the Competition Act has become
between food delivery platforms and their challenging. In a report published by the CCI
48.
FDI Policy, Para 5.2.15.2.4 (v).
49.
XYZ (Confidential) Vs. Alphabet Inc. and Others, Match Group, Inc. vs. Alphabet Inc. and Others, Alliance of Digital India Foundation vs.
Alphabet Inc. and Others [Case No. 07 of 2020 with 14 of 2021 with 35 of 2021] https://www.cci.gov.in/antitrust/orders/details/1072/0.
50.
Delhi Vyapar Mahasangh and Flipkart Internet Private Limited and ors. [Case No. 40 of 2019];
51.
Federation of Hotel & Restaurant Associations of India (FHRAI) and another Vs. MakeMyTrip India Pvt. Ltd. (MMT) and others with Rubtub
Solutions Pvt. Ltd. Vs. MakeMyTrip India Pvt. Ltd. (MMT) and others [Case No. 14 of 2019 & 01 of 2020]
52.
Umar Javed and Ors vs. Google LLC and Ors., Case No.39 of 2018; https://www.cci.gov.in/antitrust/orders/details/1070/0
53.
NRAI v. Zomato.
54.
CCI, Market Study on E-commerce Sector in India (2020), https://www.cci.gov.in/economics-research/market-studies/details/18/6.
11
on the telecom sector55 in January 2021, the CCI and the PSC aim to establish regulations
synergy between competition and privacy in governing "data usage," yet their objectives
a non-price competition market was differ. The former seeks to address the lack of
analysed. competition, manifesting as privacy concerns,
while the latter focuses on market concerns.
The report highlights that the abuse of Over time, data practices, encompassing
dominance can lead to lower privacy privacy and more, have become integral to
protection for consumers, as suboptimal the competition discourse in India,
privacy standards can impact consumer acknowledged by regulators and government
welfare.56 Moreover, the PSC Report,57 committees.
aligning with other scholars,58 notes that
lower data protection can also result in It's essential to note that various regulations
exclusionary behaviour, falling within the and upcoming legislation, extending beyond
ambit of the Competition Act. Additionally, the the competition landscape, seek to regulate
CLRC59 examined the definition of ‘price’ data and privacy concerns. Since the
under section 2(o) of the Competition Act. regulation of "data usage" is the means
The CLRC concluded that the definition is through which these objectives are pursued,
broad enough to recognise non-monetary identifying overlaps is crucial to eliminate
aspects like ‘data’ under section 2(o). The CCI conflicts.
further examined such observations
regarding the intricate interlinking of data The DPDP Act may intersect with some
usage with users’ privacy concerns in the measures suggested by the PSC in various
case of In Re: Updated Terms of Service and instances. Concerning data processing, the
Privacy Policy for WhatsApp Users (2021).60 DPDP Act deems consent a legitimate tool for
determining reasonable processing.62
While examining privacy and data protection However, the Report's recommendation
from the consumer welfare standard, the CCI restricts certain forms of consensual
and the CLRC delved into competition processing. For example, the Report
aspects. The PSC, through its Report, proposes that SIDIs must not cross-use
attempts to address the competitive personal data from relevant core services in
advantage that data provides to businesses, other platform-provided services, including
potentially distorting markets and creating other core services.63 Similarly, the DPDP
entry barriers for emerging players.61 Both the
55.
Market Study On The Telecom Sector In India. (2021).
https://www.cci.gov.in/images/marketstudie/en/market-study-on-the-telecom-sector-in-india1652267616.pdf.
56.
In concurrent with this outlook, the Competition Commission of India filed a suo moto case against WhatsApp concerning its update in
terms and conditions and privacy policy (Suo Moto Case No. 01 of 2021)
https://www.cci.gov.in/images/antitrustorder/en/0120211652258503.pdf
57.
Market Study On The Telecom Sector In India. (2021). Retrieved from CCI:
https://www.cci.gov.in/images/marketstudie/en/market-study-on-the-telecom-sector-in-india1652267616.pdf.
58.
Khan, L. M. (2017). Amazon’s Antitrust Paradox. Yale Law Review,
564-907.https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.pdf.
59.
Report of the Competition Law Review Committee. Ministry of Corporate Affairs.
(2019).https://www.ies.gov.in/pdfs/Report-Competition-CLRC.pdf.
60.
Updated Terms of Service and Privacy Policy for WhatsApp Users, 01/2021
https://www.cci.gov.in/images/antitrustorder/en/0120211652258503.pdf.
61.
Market leaders amass a hoard of personal data over time, leading to tracking, profiling, and leveraging of data to strengthen their position
in the primary and allied markets.
62.
The Digital Personal Data Protection Act, 2023, Section 6,
https://www.meity.gov.in/writereaddata/files/Digital%20Personal%20Data%20Protection%20Act%202023.pdf [hereinafter “DPDP Act”].
63.
12
Act64 considers the legitimate interests of the same.70 Here, the third party also includes
data fiduciary and reasonable expectations of online advertising services. Therefore, these
the data principal, subject to deemed provisions within the SPDI contrast the PSC
consent. However, these purposes may Report's recommendations to the DCA,
involve cross-usage65 or a combination of where, for instance, the proposed SIDIs are
personal data, conduct that the PSC Report restricted from processing data for online
seeks to prohibit, conflicting and limiting the advertising services in certain circumstances.
applicability of the deemed consent Also, the Report symbolically recommends
provision. restricting intra-group schemes and
preventing the cross-use of personal data
While various provisions of the data from the relevant core service in other
protection legislation are yet to be services provided separately by the platform.
implemented, the IT Act already addresses
privacy concerns emerging from data usage Another potential field of public policy
to a limited extent. Recommendations of the presenting implications for healthy data
PSC have synergies or overlaps with the usage practices is consumer protection. The
provisions of the IT Act. For instance, the IT Department of Consumer Affairs published
Act prohibits unauthorised access to the draft E-Commerce (Amendment) Rules in
information or data.66 Data usage practices 2021. The draft Rules attempt to prohibit the
falling within the ambit of the PSC Report abusive dominant position of e-commerce
involve unauthorized access or access for entities to an extent through regulating "Data
purposes initially not consented to, such as Usage" patterns, hence there may be
providing online advertising services and overlaps. For instance, Clause 6 (6) (a), (c)
combining and cross-using personal data.67 overlaps with the PSC Report's
Therefore, restricting unauthorized access recommendations where unfair advantages,
falls within the IT Act as well as the PSC presenting themselves in the form of
Report's recommendations. leveraging data to provide advertising
services and other personalized services, are
Furthermore, the SPDI Rules outline the restricted.
contours for body corporates,68 including
digital platforms, for collecting and While concerns might manifest in different
processing data. The SPDI Rules are founded forms and means, the ultimate regulatory goal
on the concept of consent as a legitimate of governing "data usage" patterns under
means to collect and process sensitive different regulations, as discussed above and
personal data,69 allowing cross-use of data recommended by the PSC Report, is to
within an intra-group scheme. Besides, the enhance consumer welfare by enhancing
SPDI rules permit data transfer to a third party, their rights and providing them with choices.
provided they don't further disclose the Therefore, there is a need to harmonise these
64.
DPDP Act, Section 7.
65.
Sharing of data collected by the core service providers with other portfolio service providers.
66.
The Information Technology Act, 2000, Section 43(a) and (f) § Section 43(a) and (f).
https://eprocure.gov.in/cppp/rulesandprocs/kbadqkdlcswfjdelrquehwuxcfmijmuixngudufgbuubgubfugbububjxcgfvsbdihbgfGhdfgFHytyhRtMj
k4NzY= [hereinafter “IT Act”].
67.
PSC 53rd Report, Pg. 33-34.
68.
IT Act, Section 43A.
69.
Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011
SPDI Rule, Rule 5 (2021). https://www.meity.gov.in/writereaddata/files/GSR313E_10511%281%29_0.pdf [hereinafter “SPDI Rules”].
70.
SPDI Rules, Rule 6.
13
aspects within the DCA to have a holistic law largely serves to safeguard consumers'
picture of data usage patterns. Besides, as interests through market regulation.
discussed in the CCI report on the telecom
sector,71 there is a need for better regulatory Accordingly, they provide different
74
design and improved lines of communication recourses. For instance, where anti-steering
between existing and upcoming regulators provisions in competition law would regulate
and CCI to harmonise decisions and ensure the entire market and hence prevent the
robustness and consistency. curtailment of consumers' choices, consumer
protection law would largely be invoked on
2.4. SAFEGUARDING END USERS the occurrence of a cause of action and may
provide individualistic remedies. Therefore,
The proposed ex-ante regime aims to while consumer protection legislation and
safeguard end users in the market by competition legislation might have different
explicitly guarding against any harm to their approaches, they both are premised on the
interests and providing fundamental need to protect end users, i.e., consumers.
protection. However, parallel policy
instruments curb certain practices to protect In India, the Consumer Protection Act 2019
consumers. For instance, the PSC Report (CPA) represents a significant step in ensuring
emphasizes safeguarding consumer choice that consumers are not subjected to unfair
by prohibiting anti-steering conduct. Such and harmful trade practices. Section 2(41) of
practices often prevent consumers from the Act comprehensively defines "restrictive
availing alternate options that might offer trade practice," encompassing various
more functionality and reduced costs.72 practices that can adversely affect
These not only hinder the right to choose but consumers. This section aims to identify and
also prevent customers from knowing about categorize practices that manipulate prices,
alternate options and may hinder substitution alter delivery conditions, or hinder the flow of
among other platforms. goods and services, imposing unjustified
costs or restrictions on consumers. It includes
Protection of consumer interests is primarily trade practices requiring consumers to
the mandate of consumer protection laws, purchase certain goods or services as a
with judgments supporting the fundamental prerequisite for obtaining others. Such tying
principle of consumers' right to choose and arrangements restrict consumer choice and
be informed of their choices.73 The consumer can force them to acquire products or
protection framework includes the parent services they do not desire or need, ensuring
legislation as well as rules and regulations, consumers are not compelled to make
notably on e-commerce. However, while unnecessary purchases. Similar concerns are
consumer protection laws are premised on also sought to be addressed in the PSC
the notion that consumers may have lower Report. The Report states, ‘many digital firms
bargaining power in transactions and provide force consumers to buy related services…this
direct protection to consumers, competition leads to the consumer not being given an
71.
Market Study On The Telecom Sector In India. (2021).
https://www.cci.gov.in/images/marketstudie/en/market-study-on-the-telecom-sector-in-india1652267616.pdf
72.
Ibid. at Pg. 40.
73.
Sadanand Chaudhary and Ors. vs. Amrapali Castel, Amrapali Group, Ultra Home Construction Pvt. Ltd. and Ors. (26.04.2023 - SCDRC
Uttar Pradesh) : MANU/RG/0085/2023; Bombay High Court, The Film and Television Producers Guild of India Ltd. and Ors. vs. The Union of
India and Ors. (30.06.2021 - BOMHC) : MANU/MH/1646/2021.
74.
Suhail Nathani, Pınar Akman, The interplay between consumer protection and competition law in India, Journal of Antitrust Enforcement,
Volume 5, Issue 2, August 2017, Pages 197–215, https://doi.org/10.1093/jaenfo/jnx006.
14
option to choose, and may in fact lead to her excessively increasing prices based on
paying higher prices ultimately’.75 dynamic pricing algorithms. The CPA and
Draft E-commerce (Amendment) Rules
The CPA is supplemented by the Draft collaborate to protect consumers from
E-commerce (Amendment) Rules, designed unjustified costs, restrictions, and
with a primary objective: safeguarding the manipulative pricing practices, enabling
interests of end-users or consumers in consumers to seek redressal and
e-commerce. Rule 5(14) specifically aims to discouraging harmful business activities.
ensure that e-commerce entities operate in a
manner benefiting consumers and preventing Another crucial framework ensuring
unfair pricing practices. Rule 5(14) provides consumer protection involves data protection
that no e-commerce entity shall “manipulate laws. As highlighted earlier, data processing
the price of the goods or services offered on significantly influences the market and
its platform in such a manner as to gain competition. The recently enacted DPDP Act
unreasonable profit by imposing on aims to safeguard the data of data principals
consumers any unjustified price having (individuals to whom the personal data
regard to the prevailing market conditions, relates)76 by establishing a comprehensive
the essential nature of the good or service, regime that primarily regulates the conduct of
any extraordinary circumstances under which data fiduciaries (entities determining the
the good or service is offered, and any other purpose and means of personal data
relevant consideration in determining processing).77 Similar to the PSC Report, the
whether the price charged is justified.” DPDP Act focuses on protecting the rights
Rule 5(14) explicitly prohibits e-commerce and interests of end users/data principals,
entities from manipulating prices of goods or establishing conditions, requirements, and
services on their platforms to gain thresholds for personal data processing.
unreasonable profits. This prevents However, it's important to note multiple
companies from exploiting their market instances where the DPDP Act deviates from
position to overcharge customers, aiming to the recommendations proposed in the PSC
maintain fair and justifiable prices for Report.
consumers. The provision's objective aligns
with certain conduct targeted by the PSC For reference, the DPDP Act prohibits data
Report, specifically mentioning 'dynamic fiduciaries from engaging in tracking or
pricing,' which adjusts prices based on behavioural monitoring of children or
real-time data like consumer demand and conducting targeted advertising directed at
preferences. children (defined as individuals below the age
of 18 years).78 While the PSC Report
While dynamic pricing can benefit recommends prohibiting entities from using
businesses, unregulated practices can harm personal information collected through third
consumers. Rule 5(14) addresses this by parties to provide online advertising
preventing e-commerce entities from services,79 the DPDP Act outright bans
75.
76.
DPDP Act, Section 2 ( j).
77.
DPDP Act, Section (i).
78.
DPDP Act, Section 9 (3).
79.
PSC 53rd Report, Pg. 33-34.
15
advertising targeted at children, addressing nagging are prohibited, ensuring that

the subset of individuals with whom an entity consumers can make informed choices in
might engage. their online interactions. Notably, certain
practices prohibited by these guidelines align
In addition to the specific policy instruments with those recommended in the PSC Report.
mentioned earlier, various regulatory bodies For instance, the guidelines prohibit 'forced
continuously develop and implement action,' mirroring concerns raised by the PSC
additional frameworks and regulations to Report around bundling and tying.
further safeguard consumer interests. For
instance, the Department of Consumer The term 'forced action' in the guidelines
Affairs, in collaboration with the Department refers to compelling users to undertake
and Bureau of Indian Standards (BIS), specific actions, including purchasing
introduced the Indian Standard (IS) additional goods, subscribing to services, or
19000:2022 'Online Consumer Reviews' signing up for unrelated services.82 This
framework. This framework aims to safeguard closely corresponds to the concept of
consumer interests by addressing the issue of bundling and tying, recommended to be
fake reviews on e-commerce platforms,80 prohibited in the PSC Report.83 Bundling
providing comprehensive guidelines and involves packaging multiple products or
standards to enhance the authenticity, services together, often forcing consumers to
accuracy, and transparency of online purchase items they may not have otherwise
consumer reviews. Ensuring trustworthy chosen. Similarly, tying involves linking the
reviews from legitimate sources empowers sale of one product or service to the purchase
consumers to make more informed of another unrelated one. The rationale
purchasing decisions. behind these prohibitions is rooted in
consumer protection, aiming to shield
More recently, the Government notified consumers from being coerced or
guidelines on the regulation of dark manipulated into buying goods or services
patterns.81 These guidelines on User they neither need nor desire. This aligns with
Interface/User Experience interactions the broader objective of promoting fair and
prioritize consumer protection by addressing transparent business practices that prioritize
and prohibiting deceptive design tactics that the rights and choices of consumers.
can manipulate or mislead users. Practices
like false urgency, basket sneaking, confirm Beyond addressing the issue of 'forced
shaming, forced actions, subscription traps, action,' the guidelines explicitly prohibit a
interface interference, bait and switch, drip practice known as “basket sneaking.”84 This
pricing, disguised advertisements, and term refers to the inclusion of supplementary
80.
Centre launches framework for safeguarding and protecting consumer interest from fake and deceptive reviews in e-commerce,21 NOV
2022, PIB, Delhi https://pib.gov.in/PressReleasePage.aspx?PRID=1877733.
81.
Guidelines for Prevention and Regulation of Dark Patterns, 2023,Central Consumer Protection Authority,Department of Consumer
affairs.https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/Draft%20Guidelines%20for%20Prevention%20and%20Regulat
ion%20of%20Dark%20Patterns%202023.pdf.
82.
Guidelines for Prevention and Regulation of Dark Patterns, 2023, Central Consumer Protection Authority, Department of Consumer affairs.
Rule 4 r/w Annexure 1 (iv).
https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/Draft%20Guidelines%20for%20Prevention%20and%20Regulation%2
0of%20Dark%20Patterns%202023.pdf.
83.
84.
Guidelines for Prevention and Regulation of Dark Patterns, 2023, Central Consumer Protection Authority, Department of Consumer affairs.
Rule 4 r/w Annexure 1 (ii).
https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/Draft%20Guidelines%20for%20Prevention%20and%20Regulation%2
0of%20Dark%20Patterns%202023.pdf.
16
items, such as products, services, or market.85 The PSC Report suggests

charitable donations, during the checkout subjecting these companies to ex-ante
process on a platform, without the explicit regulations by imposing both positive and
consent of the user. This practice results in negative obligations on them. In competition
the total amount payable by the user law, the need for different levels of
exceeding the originally intended amount for compliance requirements for players of
the selected product(s) and/or service(s). The different sizes, especially based on their size,
prohibition on “basket sneaking” emphasizes has been observed.86 Varying levels of
the guidelines’ commitment to safeguarding regulations and compliance between large
consumers from engaging in transactions digital platforms, often classified as
they might not willingly choose, similar to the gatekeepers, and smaller entities such as
intention behind prohibiting tying and startups and micro, small, and medium
bundling. enterprises (MSMEs) are necessary due to
inherent differences in their scale, impact,
Therefore, several frameworks currently exist and market dominance. The former often
that aim to safeguard end-users and wield significant influence over the digital
recognise the importance of transparency ecosystem due to their extensive user base,
and fairness in the consumer-business market share, and economic capacity.87
relationship. They seek to promote objectives
similar to that of the PSC Report, including These platforms often act as the primary
transparency, safeguarding consumer gateway for users to access various online
autonomy, and contributing to a digital services. Given their dominant position, they
environment where consumers are less have the potential to shape market dynamics,
vulnerable to deceptive practices, ultimately control competition, and impact user choices.
prioritising the protection of their rights and Consequently, regulations specific to these
interests. entities have been deemed crucial by
regulators to ensure fair competition, prevent
2.5. ESTABLISHING GRADED CLASSIFICATION anti-competitive practices, and safeguard
user interests.88 On the other hand, startups
FOR ENHANCED COMPLIANCE and MSMEs typically lack the market power
and reach of their larger counterparts.
The PSC Report recommends classifying Imposing the same regulatory burden on
companies as SIDIs based on three factors: these smaller entities could
market capitalization, revenue, and the disproportionately burden emerging
number of active and end users on the businesses with compliance costs.89
platform. The rationale behind this
classification is to prevent dominant platform A classification-based approach, categorising
companies from tipping the markets in their entities based on anti-competitive harms they
favour and negatively influencing the cause and/or quantitative thresholds, can
85.
86.
OECD. Promoting Compliance with Competition Law (2011).
https://www.oecd.org/daf/competition/Promotingcompliancewithcompetitionlaw2011.pdf.
87.
Laux, J., Wachter, S., & Mittelstadt, B. (2021). Taming the few: Platform regulation, independent audits, and the risks of capture created by
the DMA and DSA. Computer Law & Security Review, 43, 105613.https://www.sciencedirect.com/science/article/pii/S0267364921000868.
88.
Regulating digital gatekeepers Background on the future digital markets act. (2020). [BRIEFING]. EPRS | European Parliamentary
Research Service. https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/659397/EPRS_BRI(2020)659397_EN.pdf.
89.
Laux J. Wachter S. and Mittelstadt B. Taming the few: Platform regulation, independent audits, and the risks of capture created by the
DMA and DSA (2021). https://www.sciencedirect.com/science/article/pii/S0267364921000868#sec0011
17
enable greater market corrections by have brought in similar proposals with a focus
imposing compliance on SIDIs proportionate on certain intermediaries only. Both the UK
to their significance in the markets. and the US92 have introduced Bills to regulate
Consequently, entities that pose less risk to competition in digital markets, classifying
the market competition due to their control certain undertakings and platforms as
over the market may be regulated 'lightly', as ‘strategic market status’ and ‘covered
opposed to entities that have a significant platforms’/’covered company’, respectively.
potential for disrupting the market being Japan enacted the Improving Transparency
regulated more 'heavily'. and Fairness of Digital Platforms Act,93 which
classifies certain entities as ‘specified digital
Notably, jurisdictions across the globe are platforms’ and subjects them to increased
also moving towards a classification-based disclosure and fairness procedures. Germany
approach in their respective competition brought the 10th Amendment94 to its
laws. The EU enacted the Digital Markets Act competition law,95 which categorizes certain
(DMA) to regulate platforms based on their platforms as ‘undertakings of paramount
entrenched market position.90 Further, the significance’ and prescribes ex-ante rules for
EU’s Digital Services Act (DSA) justifies the these entities.96
classification of ‘very large online platforms’
(VLOPs) by highlighting that these platforms, These classification-based mechanisms are
when they attain a substantial user base not foreign to the Indian regulatory landscape
representing a significant share of the Union and are present more prominently in domains
population, can give rise to societal risks that concerning the use of technology and data.
differ in both scope and impact from those For instance, the IT Rules 2021 introduced a
posed by smaller platforms. The rationale is quantitative classification within
that the systemic risks emanating from very intermediaries, where social media
large online platforms have a intermediaries were classified as ‘significant
disproportionately adverse effect on the EU, social media intermediaries’ (SSMI) based on
underscoring the need for specific regulatory the number of registered users97 and are
attention to address these unique consequently subjected to additional due
91
challenges. diligence requirements.98 While this
classification is similar to the quantitative
Aside from the EU, several other jurisdictions thresholds introduced by the PSC Report, the
90.
Regulation (EU) 2022/1925 of the European Parliament and of the Council, Official Journal of the European
Union.https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R1925.
91.
Digital Services Act,Single Market For Digital Services and amending Directive 2000/31/EC,REGULATION (EU) 2022/2065 OF THE
EUROPEAN PARLIAMENT AND OF THE COUNCIL, Para 54,(19 oct,2022)
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32022R2065.
92.
American Innovation and Choice Online Act,” S. 2992, Senate and House of Representatives of the United States of America in Congress
assembled, (2022). https://www.congress.gov/bill/117th-congress/senate-bill/2992/text.
93.
Act on Improving Transparency and Fairness of Digital Platforms (TFDPA),Feb 1 2021,METI.
https://www.meti.go.jp/english/policy/mono_info_service/information_economy/digital_platforms/index.html#:~:text=Act%20on%20Improvin
g%20Transparency%20and,enforced%20on%20February%201%2C%202021.
94.
German Competition Act, Federal Ministry for Economic Affairs and Energy, GWB, 25 February 2020.
https://www.bundeskartellamt.de/SharedDocs/Publikation/EN/Pressemitteilungen/2020/25_02_2020_Stellungnahme_10_GWB_Novelle.pd
f;jsessionid=872AD8FF8C727D893244B9FAD192DBEF.1_cid390?__blob=publicationFile&v=2.
95.
Competition Act (GWB) (German), https://www.gesetze-im-internet.de/englisch_gwb/.
96.
Competition Act (GWB) (German), Section 19a, https://www.gesetze-im-internet.de/englisch_gwb/englisch_gwb.html#p0071.
97.
Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, Rule 2(v).
https://www.meity.gov.in/writereaddata/files/IT%20Rules%2C%202021%20with%20proposed%20amended%20texts%20in%20colour.pdf
98.
Ibid. at Rule 4.
18
PSC Report introduces more nuanced and The potential for conflicting or overlapping
specific requirements for its classifications. requirements is another concern. Different
regulatory classifications may come with
Similarly, the DPDP Bill, 2022 proposed the distinct obligations, and companies falling
classification of certain data fiduciaries as into multiple categories may face challenges
‘significant data fiduciary’ (SDF) on the basis in reconciling these requirements. This could
of factors such as risks to data principals, risks create ambiguity and uncertainty, as
to the country’s sovereignty or democracy, businesses struggle to determine which set of
the volume and sensitivity of the data, among rules takes precedence. Conflicting
others; these fiduciaries are also subjected to regulations may hinder the effectiveness of
additional obligations.99 An explanatory note compliance efforts and even create legal and
was released to give an understanding of the operational risks for companies.
DPDP 2022 Bill, which relayed that such
classification amongst fiduciaries is In some cases, different regulatory
necessary owing to factors such as the classifications might involve oversight by
volume of personal data and higher risk to separate regulatory bodies. This can result in
data subjects which warrant these entities to potential conflicts between these authorities,
be subjected to additional requirements.100 leading to inconsistencies in enforcement
This classification is retained in the recently and interpretation of regulations. Such
enacted DPDP Act.101 This qualitative conflicts may impede a harmonised approach
classification is different from the quantitative to digital governance and could generate
classification proposed by the PSC. confusion for both businesses and
consumers. As an example, although the
The existence of multiple classifications in the DMA explicitly provides that it will apply
digital realm can introduce several without prejudice to other extant frameworks,
downsides, potentially leading to challenges there might be certain conflicts with
in regulatory implementation and creating Platform-to-Business Regulation (P2B
102
burdens for the entities subject to these Regulations) and GDPR. Navigating these
regulations. One major downside is the risk of conflicting recommendations can be complex
imposing a compliance burden on digital for businesses, potentially leading to
entities that operate across different service suboptimal or fragmented approaches to data
categories. If a company falls into multiple processing. Therefore, while classification
classifications, it may be required to adhere to and targeted regulation are necessary for
distinct sets of regulations for each category. addressing specific challenges in the digital
This can lead to a complex and realm, careful consideration must also be
resource-intensive compliance process, as given to avoid overburdening businesses,
the company must navigate and fulfil diverse introducing conflicting requirements, and
regulatory requirements. inhibiting innovation.
99.
The Digital Personal Data Protection Bill, 2022, Clause 11 .
https://www.meity.gov.in/writereaddata/files/The%20Digital%20Personal%20Data%20Potection%20Bill%2C%202022_0.pdf.
100.
The Digital Personal Data Protection Bill, 2022, Para 13, Explanatory note,
https://www.meity.gov.in/writereaddata/files/Explanatory%20Note-%20The%20Digital%20Personal%20Data%20Protection%20Bill%2C%202
022.pdf.
101.
DPDP Act, Section 10.
102.
Konstantina Bania (2023) Fitting the Digital Markets Act in the existing legal framework: the myth of the “without prejudice” clause,
European Competition Journal https://www.tandfonline.com/doi/full/10.1080/17441056.2022.2156730.
19
2.6. BROAD OVERLAPS WITH THE OBJECTIVES OF instance, objectives of regulating advertising
policies, anti-steering provisions in relation to
THE PROPOSED DIGITAL INDIA ACT app stores, and unrestricted usage of
children’s data are sought to be regulated by
In 2022, a Digital India Act (DIA) was both the DIA and the DCA.
proposed as a comprehensive framework
that would regulate the digital sphere and In addition, the DIA proposes to classify
replace the existing IT Act. In consultations intermediaries into different categories based
organised on 23rd May 2023 and 9th March on the service the intermediary is providing.
2023, the Ministry of Electronics and These include e-commerce, digital media,
Information Technology (MeitY) shed light on search engines, gaming, AI, adtech, OTTs,
the key components of the DIA.103 As per the etc. The consultation proposes different
consultation, the DIA would ensure an open levels of liabilities for each class of
internet characterised by features like intermediary rather than subjecting all classes
'choice', 'competition', and 'fair market access'. to a blanket regulation. Similar to this, the
It was stated that the DIA would seek to DCA might also outline a list of core platform
regulate fair trade practices, prevent the services that would fall under its purview. As a
concentration of market power and result, an intermediary that is categorised
gatekeeping, and correct distortions through under the DIA may also be subject to the
the regulation of dominant ad-tech platforms, DCA, increasing the possibility of
app stores, etc. These present direct overlaps overregulation and the intermediaries'
with the objectives of the PSC Report. For compliance costs.
Ministry of Electronics and Information Technology, Proposed Digital India Act, 2023, Digital India Dialogues (March 09 2023),
103.
https://www.meity.gov.in/writereaddata/files/DIA_Presentation%2009.03.2023%20Final.pdf
20
3 BROAD CHALLENGES
3.1. DIFFICULTY IN HARMONISATION competition, consumer protection on
e-commerce platforms, etc., have been
undertaken.
All the PIs mentioned above are at various
stages of development and are regulated by Various ministries may adhere to their
multiple regulators and ministries. The DCA timelines to conclude these processes,
would not be India’s first effort to achieve the resulting in a scenario where, in different
aforementioned objectives pertaining to sectors, existing laws may coexist with the
digital markets, where there are various laws more advanced requirements under the DCA;
and regulations that directly or indirectly regulated entities might find it challenging to
apply to the handling and functions of digital comply with both simultaneously. This section
platforms. While the DCA is still in the making, offers an overview of different government
several parallel policymaking exercises that stakeholders regulating some of these
have sought to formulate new frameworks instruments, along with the timelines
with elements concerning the processing and associated with these instruments.
protection of personal data, digital
Data Privacy Proposed Data Protection Board; MeitY
Foreign Direct Investment Department for Promotion of Industrial and Internal Trade
Consumer Protection Consumer Protection Authority; Department of Consumer Affairs
Competition Competition Commission of India; Ministry of Corporate Affairs
Platform Regulation MeitY, Ministry for Information Brodcasting
Online Payments Reserve Bank of India; NPCI; Ministry of Finance
Figure (iii)
The DCA will introduce several relatively novel granular issues, such as varying definitions or
concepts with limited prior jurisprudence. Line principles. This could undermine the primary
ministries and regulators may unintentionally purpose of introducing a comprehensive DCA.
differ in their interpretations of details or Minimising these concerns would, at the very
21
least, require concerted advocacy and of 2002, which allows the CCI and other
awareness efforts within various arms of the statutory authorities to make voluntary
government. Addressing this demands a references to each other.107 The PDP Bill goes
coordinated inter-ministerial and a step further by requiring the DPA to consult
inter-regulatory effort, as different ministries other statutory regulators before taking any
and regulators have their jurisprudence and ‘action’. However, these provisions on
purview over their sectors and functions. inter-regulatory references were removed
from the DPDP Act.
Therefore, harmonisation of the same can
prove to be a challenge where concerns Additionally, there is a concept of striking
about regulatory cooperation in India have MoUs with other authorities or regulators in
been discussed extensively across multiple areas of concurrent jurisdiction, first
domains.104 One recurring theme has been the suggested by the Financial Sector Legislative
need to minimise jurisdictional overlaps Reforms Commission (FSLRC) for coordination
between regulators. As seen in the past, in between financial sector regulators and the
some cases, these have often had to be CCI, which is also a frequently used tool in
resolved in court or by Parliament on a other countries like the UK, EU, etc. The PDP
case-by-case basis.105 Examples include Bill also states that, in addition to the
conflicts between the CCI and regulators in provisions within the bill, significant data
the telecommunications and energy sector or fiduciaries shall be regulated by regulations
between the Securities and Exchange Board made by the respective sectoral regulators.
of India and the Insurance Regulatory However, again, this was removed from the
Development Authority of India.106 enacted DPDP Act.
3.2. CONCERNS WITH EXISTING Moreover, these proposed mechanisms are
INTER-REGULATORY COORDINATION
also not free of concern. Regarding
inter-regulatory references, the relevant
MECHANISMS provision did not define the term ‘action’.
Additionally, there is no process for regulators
Various mechanisms attempt to establish to identify whether or when their jurisdictions
inter-regulatory coordination. The previous overlap in scope or what their jurisdictional
versions of the data protection bill included boundaries are. Notably, while the X regulator
provisions for a system of inter-regulatory must consult other regulators before taking
references, while the Personal Data Protection any action on matters which may also fall
Bill 2019 (PDP Bill) mandated the Data within the jurisdictions of the latter set, there is
Protection Authority (DPA) to consult with any no corresponding obligation on other
relevant regulator before taking any action. regulators to consult the X regulator before
This seems to draw from the Competition Act taking any action. The ultimate burden of
104.
Damodaran Committee, Report of the Committee for Reforming the Regulatory Environment for Doing Business in India, Ministry of
Corporate Affairs (September 2, 2013), https://www.mca.gov.in/Ministry/annual_reports/DamodaranCommitteeReport.pdf; Financial Sector
Legislative Reforms Commission, Report of the Financial Sector Legislative Reforms Commission- Volume I: Analysis and
Recommendations, 14th Finance Commission (March 22, 2013), https://dea.gov.in/sites/default/files/fslrc_report_vol1_1.pdf.
105.
Sen, S., Vivek, S., The Regulatory Governance Project: An Approach Paper, NLSIU (July 28, 2021),
[https://static1.squarespace.com/static/6059f4f5b533f02b83a1e21a/t/6103e2accb41ff15e1e547c1/1627644588852/Regulatory+Governance+-
+Approach+Paper+v.+1.1.pdf.
106.
Sahithya, M., Chakraborty, A., Sectoral Regulator and Competition Commission: Envisaging a Movement from Turf War to Reconciliation,
Vol 11, NALSAR Student Law Review, [125-167] [2017].https://www.nalsar.ac.in/images/NSLR%20Vol.11%202017.pdf.
107.
The Competition Act, 2002, §21 and §21A, No. 12 of 2003, Acts of Parliament, 2002.
22
ensuring harmonisation thus lands on the X are very different from those posed by one for
regulator without other sectoral regulators traffic prediction. Policymakers often rely on
having to commit to harmonisation mutually. sectoral or context-specific expertise. On the
Besides, generally, MoUs do not specify what flip side, while the DCA seeks to evaluate
such an agreement will actually contain or specific innovations viewed through the lens
how they may operate since there is no clarity of consumer welfare and competition
in the operative phrase. Lastly, on sectoral concerns, other regulators may also be
regulation, there is no definition of a ‘sectoral exploring those innovations through their
regulator’, therefore, it is unclear how a system sectoral or domain-specific lens.
referring to sectoral regulation works.
This may not be the most efficient approach,
3.3. UNCERTAINTY FOR MARKET PLAYERS as there's a risk of duplication of efforts,
making it more challenging to holistically
The multiplicity of regulations and rules examine the risks posed by market players.
seeking to fulfil similar or conflicting objectives Therefore, this distributed operation and
creates various supply-side challenges. duplication of efforts by different regulators
Compliance uncertainty and the sentiment of also create complexities for businesses
over-regulation, which goes against exploring new technologies. They may have
expansionary policy objectives and to approach different regulators to seek
contributes to investment barriers, emerge as exemptions under distinct regimes for the
the foremost supply-side issues. Applying same new technologies, causing roadblocks
different regulations to the same entity for start-ups in terms of additional costs and
performing multiple functions would increase hindrance to service/product development.
their compliance costs, potentially causing The lack of uniformity in the framework and
entry barriers for start-ups. Moreover, the format adds to compliance costs. Lastly,
multiplicity of laws can lead to regulatory fragmented approvals of cross-sectoral
arbitrage, as entities might comply only with innovation could slow down market adoption.
the most favourable regulation, escaping
other crucial mandates under different
regulations. Additionally, a lack of uniformity in
3.4. DEMAND-SIDE CONSTRAINTS
consumer or entity understanding could lead
to contradictory interpretations in case of a On the demand side, entities and consumers
dispute. have various grievance redressal portals to
lodge their complaints with
This uncertainty is more pronounced for regulators/policymakers. For instance, each
market players in emerging technologies. financial sector regulator has its own
Regulators need specific context to fully ombudsman, and there is a Cyber Appellate
appreciate the potential of emerging Tribunal under the IT Act. It is still unclear if the
technologies like Artificial Intelligence (AI) DCA will include any grievance redressal
based on how they are employed. For mechanisms or if consumers will continue
example, the risks posed by a machine relying on filing information under the
learning algorithm for a credit scoring system Competition Act. Grievances in the
23
technology sector would involve multiple

tribunals and ombuds, and the current
disjointed way of operating grievance
management might become obsolete,
confusing, and onerous.
This situation could also lead to regulatory

uncertainty, where the regulator/policymaker
might deny redressal to a particular grievance,
stating that it doesn’t fall within their ambit.
Consumers may find it difficult to determine
when to approach one channel over the other.
There could also be differences in approach
and processes, potentially creating stress for
consumers as they navigate multiple
mechanisms. Without mechanisms for
knowledge and experience sharing across
systems, different redressal systems could
end up working in silos without learning from
each other. For example, those handling data
processing complaints could benefit those
handling competition and consumer welfare
grievances.
24
4 RECOMMENDATIONS AND WAY FORWARD

While drafting the proposed DCA, relevant sector-specific and technical issues.108
ministries and regulators need to enhance However, exploring a more structured
coordination to carefully delineate the scope approach to harmonise these various allied
of the DCA and pre-emptively guard against laws holds value. A structured process of
possible overlaps and contradictions in the harmonisation could also unveil opportunities
new law. The CDCL includes several for synergy and integration, especially a
stakeholders, such as MeitY, DPIIT, MCA, and shared approach toward establishing a
DoCA. risk-based framework. Regulators could
collaborate to assess when higher standards
However, the manner in which ministries will are practically required and determine specific
resolve relevant challenges arising from the additional obligations needed to mitigate
multiplicity of laws is still unclear. It is crucial to certain risks. For example, sectoral or
instil transparency in these mechanisms to domain-specific regulators could work with
ensure a truly participative process involving the CDCL to create regulations that
the public policy ecosystem at large. Among cross-reference each other, enabling them to
other factors, it would be crucial to ensure address issues falling within their regimes and
that, in the long term, a structured mechanism under the DCA.109
for consistent coordination is curated. The
framework may be established within the DCA For a structured approach to harmonisation,
or as part of other policy instruments as we may refer to the strategies proposed by
follows. the FSLRC, tasked with consolidating and
harmonising a fragmented regulatory
4.1. STRUCTURED APPROACH TO architecture in the financial sector.110 One
relevant strategy was the establishment of an
HARMONISATION 'interim coordination council' consisting of
existing regulators and line ministries to
In the recent past, we witnessed increased ensure a smooth transition to a single unified
inter-ministerial coordination and observed a financial law. A similar structure could be
'whole of government' approach being explored to ensure alignment between the
adopted. For instance, MeitY and MCA have DCA and the various existing and proposed
agreed that MCA will oversee laws. In the figure below, we outline a rough
competition-related issues in digital markets, blueprint of a process that such a coordination
while MeitY will restrict itself to dealing with council could follow.
108.
MCA to handle competition issues in digital markets; Meity to look at sector-specific, technical issues. (2023, July 4). The Economic
Times.https://economictimes.indiatimes.com/tech/technology/mca-to-handle-competition-issues-in-digital-markets-meity-to-look-at-sector-sp
ecific-technical-issues/articleshow/101487116.cms?from=mdr.
109.
For a discussion on the concept of regulators cross-referencing regulations, see Perrin, W., Woods, L., Online Harms – Interlocking
Regulation, Carnegie UK Trust, (2020) available at:https://carnegieuktrust.org.uk/blog-posts/online-harms-interlocking-regulation/.
110.
The Financial Sector Legislative Reforms Commission (Analysis and Recommendations Volume 1). (2013). Govt. Of India.
https://dea.gov.in/sites/default/files/fslrc_report_vol1_1.pdf.
25
The interim coordination council

should notify the action points
3
and date for process
completion.
Completion of streamlining
Every regulator (board) and 4 process both short-term action
Government should form an policymaker should form a point and long-term action point.
interim coordination council for 2 committee and should analyse
1
initiating the stremlining the possible overlaps with DCA Submission of report by the
prosess. 5
mandate. interim coordination council.
Date of enactment Date of Gazette Notified date by

of DCA Notification Committee
Figure (iv)
4.2. FORMING COORDINATION COMMITTEES Drawing lessons from other jurisdictions,

Australia has the Digital Platform Regulators
Forum, where four regulators collaborate on
Exploring the establishment of coordination issues like consumer protection, online safety,
committees to facilitate close collaboration privacy, and personal data protection and their
among representatives of different regulators intersection.112 This initiative provides a
is worth considering. India already has collective of diverse regulatory perspectives
examples of coordination committees serving and offers a one-stop shop for government
this purpose. A notable instance is the policymakers to engage with regulators on
Financial Stability and Development Council digital platform-related issues, ensuring
(FSDC), comprising the Governor of the RBI consistency in digital regulation.
and representatives from various financial
sector regulators,111 primarily mandated to Similarly, in the UK, four
enhance inter-regulatory coordination. regulators—Competition & Markets Authority,
Another example is the Forum of Indian Information Commissioner’s Office (ICO),
Regulators, formed by regulators in the Financial Conduct Authority, and Office of
electricity sector, which now includes Communications—have established a Digital
representatives from the Telecom Regulatory Regulation Cooperation Forum (DRCF) to
Authority of India and the CCI. Although support regulatory coordination and
registered as a society and lacking a legal cooperation on online services and digital
mandate, this body aids participating markets.113 They publish detailed work plans
regulators in sharing best practices and and annual reports, outlining their goals of
developing common strategies to address regulatory coherence, collaboration, and
new regulatory challenges. capacity-building.114 Regarding ex-ante laws
111.
Reserve Bank of India, Financial Stability Report, (2010), https://m.rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=586.
112.
Australian Competition & Consumer Commission, Agencies form Digital Platform Regulators Forum, (2022),
https://www.accc.gov.au/media-release/agencies-form-digital-platform-regulators-forum.
113.
Competition & Markets Authority, Digital Regulation Cooperation Forum, (2020),
https://www.gov.uk/government/publications/digital-regulation-cooperation-forum .
114.
Digital Regulation Cooperation Forum, Plan of work for 2022 to 2023, (2022),
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1071501/DRCF_Annual_Workplan.pdf.
26
for competition, the EC, as part of the DMA, account aggregators or e-commerce entities
has established a high-level group composed must appoint a grievance redressal officer and
of representatives from various European implement a policy for the disposal of
government stakeholders, including the customer complaints.
European Data Protection Supervisor (EDPS)
and European Data Protection Board, to The coexistence of these frameworks
provide expertise and advice for the coherent underscores a strong emphasis on consumer
and complementary implementation of the grievance redressal, especially in the context
DMA and other regulations. A similar of digital technologies. Furthermore, we
framework may be considered as part of the acknowledge that once established, the
DCA in India. grievance redressal mechanisms under the
DPDPA will also coexist with several other
These examples suggest the merit of mechanisms found under current laws and
establishing a formal body to build a regulations. For instance, intermediaries
harmonised understanding of the digital under the IT Act must appoint a grievance
public sphere and promote regulatory officer and provide a mechanism for users to
coordination. Such a body could perform roles file complaints, and account aggregators or
akin to those carried out by coordination e-commerce entities must appoint a grievance
bodies in the discussed jurisdictions, like the redressal officer and put in place a policy for
DRCF in the UK or the DPRF in Australia. the disposal of customer complaints. This
coexistence underscores a robust
4.3. CALIBRATED GRIEVANCE REDRESSAL commitment to addressing consumer
grievances, particularly in the realm of digital
technologies.
The existing grievance management system
faces two significant problems: (a) a lack of
horizontal coordination (in terms of various 4.4. ASCERTAIN THE EXTENT OF TRADITIONAL
coexisting systems and mandates); and (b) a COMPETITION FRAMEWORKS’ SUFFICIENCY
lack of agility in terms of resolution. Therefore,
we propose a calibrated hierarchical Each of the 10 ACPs can fall under the
grievance redressal mechanism with regulation of the Competition Act. On the
horizontal and vertical coordination (between antitrust end, the CCI has either published
different elements of the system) and agility final orders or is currently investigating each
proofing. Thus, if a grievance redressal of these ACPs, excluding anti-competitive
mechanism is established under the DCA, it transactions, which fall under the purview of
must coexist with several other mechanisms merger control. However, the key rationale
found under current laws and regulations. For justifying an ex-ante framework is that
example, intermediaries under the IT Act must traditional regimes take a significant amount
appoint a grievance officer and provide a of time to address anti-competitive harms. On
mechanism for users to file complaints, while average, the CCI has taken 1305 days to issue
27
a final order in cases involving digital markets, the designation process to the
starting from the date of its prima facie order. non-compliance decision.
When evaluating the need for a new law, it's
crucial to analyse the extent to which an Furthermore, the extent to which concerns
ex-ante framework will practically reduce the about the time taken can be addressed by the
time taken to address anti-competitive harms. Settlements & Commitments (S&C) framework
introduced by the Competition Amendment
For instance, the DMA in the EU broadly Act will need to be seen.119 A study analysing
includes the following key timelines: After the 84 cartel cases in the EU found that settlement
Act takes effect, any entity meeting the procedures reduced the duration of settled
specified thresholds must inform the cases by around 9 months.120 On the merger
Commission within 2 months.115 Once notified, control end, it's important to analyse the
the Commission has 45 working days to extent to which the DVT criteria can address
designate the entity as a gatekeeper.116 The the issue of digital transactions evading
gatekeeper must then produce a compliance scrutiny by the CCI. It may be prudent to note
report within 6 months of being designated.117 that the criterion has been adopted for this
If a gatekeeper is found non-compliant, the purpose in multiple other jurisdictions,
Commission has 12 months from the start of including the United States,121 Austria,122 and
proceedings to issue a non-compliance Germany,123 and may warrant consideration in
decision.118 This implies that it may take the British context before being
approximately two years for the Commission complemented by a new provision in the DCA
to address anti-competitive behaviour from altogether.
115.
Council Regulation 2022/1925, art. 3(3), 2022 OJ (L 265) (EC). https://eur-lex.europa.eu/eli/reg/2022/1925.
116.
Council Regulation 2022/1925, art. 3(4), 2022 OJ (L 265) (EC). https://eur-lex.europa.eu/eli/reg/2022/1925.
117.
Council Regulation 2022/1925, art. 3(10); art. 11, 2022 OJ (L 265) (EC).https://eur-lex.europa.eu/eli/reg/2022/1925
118.
Council Regulation 2022/1925, art. 29, 2022 OJ (L 265) (EC) .https://eur-lex.europa.eu/eli/reg/2022/1925.
119.
Competition (Amendment) Act , 2023, 185-C f 2022, § 48A and § 48B, March 29 2023
.https://prsindia.org/files/bills_acts/acts_parliament/2023/The%20Competition%20(Amendment)%20Act,%202023.pdf
120.
Saksham Malik, Bhoomika Agarwal, Primer, 53rd Report of the Standing Committee on Finance and a Potential Ex-Ante Competition Law
Regime, The Dialogue,
https://thedialogue.co/wp-content/uploads/2023/03/Primer-53rd-Report-of-the-Standing-Committee-on-Finance-and-a-Potential-Ex-Ante-Co
mpetition-Law-Regime.pdf.
121.
15 U.S.C. §18a.
122.
Federal Cartel Act, 61/2005, § 35(1a),
§9(4).https://www.bwb.gv.at/fileadmin/user_upload/PDFs/Cartel_Act_2005_Sep_2021_english.pdf.
123.
Gesetz gegen Wettbewerbsbeschränkungen, Bundesgesetzblatt,
§107.https://www.bundeskartellamt.de/SharedDocs/Publikation/EN/Pressemitteilungen/2020/25_02_2020_Stellungnahme_10_GWB_Novel
le.pdf;jsessionid=872AD8FF8C727D893244B9FAD192DBEF.1_cid390?__blob=publicationFile&v=2.
28
AUTHORS
SAKSHAM MALIK
SENIOR PROGRAMME MANAGER - COMPETITION LAW AND POLICY
Saksham Malik graduated from Rajiv Gandhi National University of Law, Punjab in 2020
following which he worked in the antitrust law team of a tiered law firm. His work in the
policy sphere revolves around interdisciplinary research in the areas of competition,
technology, and human rights law and policy. He is focused on employing tools of
policy-making, legal aid, advocacy, and capacity-building to advance the cause of social
justice.
KAMESH SHEKAR
SENIOR PROGRAMME MANAGER - DATA GOVERNANCE
His area of research covers informational privacy, surveillance technology, intermediary
liability, safe harbor, issue of mis/disinformation on social media, AI governance etc. Prior
to this, Kamesh has worked as a communication associate at Dvara Research. Kamesh
holds a PGP in Public Policy from Takshashila Institution and holds an MA in media and
cultural studies and a BA in social sciences from the Tata Institute of Social Sciences.
BHOOMIKA AGARWAL
SENIOR RESEARCH ASSOCIATE
Bhoomika completed her B.A.LLB (H) from Guru Gobind Singh Indraprastha University
and has several publications and paper presentations to her name. She has done
internships with several reputed organizations where she worked on a project to make
internet space safer for women and other communities. Her focus areas include
technology policy and competition law.
AMAN MISHRA
SENIOR RESEARCH ASSOCIATE
Aman Mishra is a Senior Research Associate at The Dialogue. He has completed his
B.B.A. LL.B. from Bharati Vidyapeeth, Pune. Previously he gained valuable experience at
a boutique law firm, where he actively engaged in addressing antitrust issues pertaining
to cartels and abuse of dominance. Following that, he transitioned to the competition law
& policy space by joining CUTS Institute for Regulation.
VAISHNAVI SHARMA
RESEARCH ASSOCIATE
Vaishnavi Sharma serves as a Research Associate at The Dialogue, specialising in
privacy and data governance research. She earned her undergraduate degree from
Maharashtra National Law University, Mumbai, with a strong focus on constitutional law.
Her primary areas of interest encompass fundamental rights, including freedom of
speech and expression, assembly, and privacy, both in offline and online contexts.
MORE FROM OUR RESEARCH
A
P
R
20
Preliminary Analysis I
L
22
!"#$%&'&'"()*+#%(,#%(&-).'//0)12113
4%5)!67(8%90):;"/<&'"()7(,)+(7/59'9
Research paper
Building Effective and Harmonised
Data Protection Authority
Strategies for Structural Design and Implementation
Kamesh Shekar1
Senior Research Associate
Author works with The Dialogue, India as Senior Research Associate and he is a Fellow at Internet Society.
Email ID: [email protected]. Author would like to thank Manreet Khara for her research assistance.
Preliminary Analysis Research Paper Primer
Competition (Amendment) Building Effective and 53rd Report of The Standing

Bill, 2022: Key Changes, Harmonised Data Protection Committee on Finance and A
Evolution and Analysis Authority Strategies for Potential Ex-Ante Competition
Structural Design and Law Regime
Implementation

Antitrust 2.0
ȉǼȬƲɅǛɅǛȉǾ٪ Competition (Amendment) Bill,
2022 and Other Changes
‫ح‬ǼƲǾƫǼƲǾɅ‫خ‬٪Ǜǳǳ‫ؙ‬٪‫ׁؚ׀־׀‬٪
Event Report
ǕƇǾǍƲȷ٪ǛǾ٪ǳǛǍǕɅ٪ȉǌ٪ɅǕƲ٪
FǛǾƇǾƤƲ٪ȉǼǼǛɅɅƲƲ‫ى‬ȷ٪
§ƲƤȉǼǼƲǾƫƇɅǛȉǾȷ
¤jUã٪§U-F
Policy Brief Analysis Event Report Event Report

Competition Parliamentary Committee on Future of Competition Policy Antitrust 2.0 - Competition
(Amendment) Bill, 2023: Finance’s 52nd Report on in Digital Markets (Amendment) Bill, 2022 and
Changes in light of the Competition (Amendment) other changes
Finance Committee’s Bill 2022
Recommendations
@_DialogueIndia @The-Dialogue-India
@TheDialogue_Official @TheDialogueIndia
thedialogue.co

Indian Policy Instruments and Objectives of The Proposed Digital Competition Act Implications Challenges and Way Forward

Uploaded by

Copyright:

Available Formats

Indian Policy Instruments and Objectives of The Proposed Digital Competition Act Implications Challenges and Way Forward

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Indian Policy Instruments and Objectives of The Proposed Digital Competition Act Implications Challenges and Way Forward

Uploaded by

Copyright:

Available Formats

RESEARCH REPORT

INDIAN POLICY INSTRUMENTS AND OBJECTIVES OF THE

Indian Policy Instruments and Objectives of the

Authors - Saksham Malik, Kamesh Shekar, Bhoomika Agarwal,

For more information

S&C Settlements & Commitments

B LIST OF POLICY INSTRUMENTS DISCUSSED

Consumer Protection (E-Commerce) Rules, E-commerce Rules

Competition Act, 2002 Competition Act

Proposed Amendments to Consumer Draft E-commerce (Amendment) Rules

Consumer Protection Act, 2019 CPA

Digital Personal Data Protection Act, 2023 DPDP Act

Information Technology Act, 2000 IT Act

Information Technology (Intermediary IT Rules 2021

Information Technology (Intermediary IT (Amendment) Rules 2022

Information Technology (Reasonable SPDI Rules

Competition (Amendment) Act, 2023 Competition Amendment Act

Digital India Act DIA

Personal Data Protection Bill, 2019 PDP Bill

provides key recommendations, advocating

Setting up of an ‘interim coordination Establishing calibrated hierarchical

Establishing a formal body, that would

Figure (i): Means to Establish Harmonisation

ACPs Parallel example in physical markets

2. Pricing/Deep Discounting: E-commerce A tea manufacturer incurs a cost of Rs. 50 per

8. Restricting third-party applications: Users An automobile manufacturer modifies the

9. Anti-competitive transactions: Large firms The business of an established fast-food

10. Advertising Policies: Companies engage A newspaper company gives more

The Commerce Committee

December 2022 March 2023

June 2022 February 2023 2024

The commerce Committee’s CDCL is constituted by the MCA

2 OBJECTIVES OF THE PROPOSED DCA AND

usage of end-user data.9 enterprises or mergers exceeding specified

combinations in these markets.17 Payments Interface (UPI) were established to

prohibited from having ownership or control treatment of all participants. In the

concentration as an anticompetitive impact of arose regarding fair and unrestricted access,

entities in e-commerce marketplaces. Restaurant Partners, covering both private

advertising targeted at children, addressing nagging are prohibited, ensuring that

items, such as products, services, or market.85 The PSC Report suggests

Data Privacy Proposed Data Protection Board; MeitY

Consumer Protection Consumer Protection Authority; Department of Consumer Affairs

Competition Competition Commission of India; Ministry of Corporate Affairs

Platform Regulation MeitY, Ministry for Information Brodcasting

Online Payments Reserve Bank of India; NPCI; Ministry of Finance

3.2. CONCERNS WITH EXISTING Moreover, these proposed mechanisms are

technology sector would involve multiple

This situation could also lead to regulatory

4 RECOMMENDATIONS AND WAY FORWARD

The interim coordination council

Date of enactment Date of Gazette Notified date by

4.2. FORMING COORDINATION COMMITTEES Drawing lessons from other jurisdictions,

Preliminary Analysis Research Paper Primer

Competition (Amendment) Building Effective and 53rd Report of The Standing

Policy Brief Analysis Event Report Event Report

You might also like