Based on insights from over 300 respondents, majorly MSMEs and startups, this study examines the potential impact of the Draft Digital Competition Bill of 2024 (DCB), introduced by the Government of India, on businesses leveraging digital services. Proposed in March 2024, the DCB aims to promote fair competition and curb anti-competitive practices in digital markets. However, its broad regulatory scope raises concerns about unintended consequences for sectors that rely on digital innovation to drive growth.
Currently, competition in India is governed by the Competition Act of 2002, administered by the Competition Commission of India (CCI). The Act relies on evidence-based evaluations of market harm and pro-competitive benefits, except for per se violations like cartelisation. While the CCI has taken proactive steps in digital and technology markets, the DCB introduces ex-ante (pre-emptive) and size-based regulations, mirroring approaches in jurisdictions like the EU and UK.
However, the DCB’s reliance on a per se approach for vertical restraints and unilateral conduct risks overlooking context-specific assessments essential for understanding harm and benefits. The DCB fails to account for sector-specific efficiencies and dynamics by generalising regulations across all digital services.
Key Concerns
- Efficiencies: While some businesses have raised concerns about the terms of digital services, many others have leveraged these platforms to scale operations, improve efficiencies, and innovate.
- Empirical Evaluation: The Committee on Digital Competition Law (CDCL) did not undertake systematic consultation or data-driven analysis to evaluate digital services’ pro-competitive and pro-consumer benefits.
- Impact on MSMEs and Start-ups: The rapid adoption of digital services has enabled MSMEs and start-ups to improve market access and scalability. Premature or broad-brush interventions risk undermining these benefits.
Focus of the Study
This study aims to fill these gaps by gauging:
- How businesses perceive the benefits of digital services.
- Insights into businesses’ satisfaction with digital services’ choice, terms, and pricing.
- Businesses’ perceptions of the potential consequences of the DCB on their operations.
Through these insights, the study seeks to inform a more nuanced and balanced regulatory framework that preserves the benefits of digital services while addressing legitimate competition concerns.
