Reportof theCommittee on Digital Competition Law

Ministry of Corporate Affairs
Government of India

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1REPORT OF THE COMMITTEE ON DIGITAL COMPETITION LAW – 2024
New Delhi, 27 February, 2024

To,
The Hon’ble Union Minister of Finance and Corporate Affairs
Madam,We have the privilege and honour to present this report of the “Committee on
Digital Competition Law” which was set up on 6th February 2023 to examine the needfor an ex-ante regulatory mechanism for digital markets in India. The Committee wastasked with the responsibility of reviewing the current provisions of the Competition
Act, 2002; assessing whether they are sufficient to deal with challenges that haveemerged from the digital economy; and evaluating whether a separate legislation toregulate digital markets is needed.
2.
The Committee had the benefit of diverse views from various organisations
such as industry chambers, Government Departments / Ministries, and experts ofvarious disciplines especially in law, policy, economics, and other stakeholders.
3.
The Committee has made a sincere effort to take a holistic and comprehensive
view while examining the need for a separate digital competition law, bearing in mind
the inherent peculiarities of digital markets vis-à-vis traditional markets as well as awide range of stakeholder concerns. The Report seeks to address the issues that are or
may potentially become concerns in the anti-trust regime in the context of digitalmarkets.
4.
We thank you for providing us an opportunity to present our views on a new
digital competition law in India and related matters.
Yours sincerely,

Dr. Manoj Govil
Chairperson

Ms. Ravneet KaurMemberDr. Saurabh
Srivastava
MemberDr. Aditya
Bhattacharjea
MemberShri Harsha
Vardhana Singh
Member

Ms. Pallavi Shardul
ShroffMemberShri Anand S. Pathak
MemberShri Manoj Pandey
Member Secretary2

Shri Haigreve
KhaitanMemberTHIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

3REPORT OF THE COMMITTEE ON DIGITAL COMPETITION LAWPREFACE

Widespread adoption of technology and rapid growth of digital businesses have hada significant impact on the Indian society and the economy. Digitalisation has
fundamentally changed the way consumers interact with each other and with
providers of goods and services.
Digitalisation may have several pro-competitive benefits. Market contestability andfair practices encourage innovation and the creation of new products and services. A
robust governance framework is, however, needed to support an orderly expansionof the digital ecosystem and address potential anti-competitive harm.
The current ex-post framework under the Competition Act, 2002 was conceived witha view to ensuring contestability and fairness in traditional markets, at a time when it
was not possible to imagine the current scale of digitalisation. Certain aspects of the
ex-post framework, including the time-consuming nature of enforcement proceedings,
may not be appropriate for digital markets, given the unique characteristics of suchmarkets. Recent times have also seen widespread stakeholder concerns about
potential anti-competitive behaviour of large enterprises providing digital services.
In this backdrop, the Committee on Digital Competition Law was constituted by the
Ministry of Corporate Affairs to review the existing regime under the Competition
Act, 2002 and to evaluate the need for an ex-ante competition framework for digitalmarkets in India. The Committee held consultations with key stakeholders andexamined both the domestic legal framework and the international regulatory
practices for regulation of digital services.
The Committee observes that the current ex-post framework under the Competition
Act, 2002 needs to be supplemented to better address concerns related to alleged anticompetitive practices of large digital enterprises. The Committee recommends that exante measures be introduced to complement the current ex-post framework byidentifying large digital enterprises with a ‘significant presence’ in India in selected‘core digital services’ and setting pre-determined rules for their conduct. Since digitalmarkets are dynamic in nature, timely intervention is necessary to prevent anticompetitive conduct. A set of appropriately designed ex-ante measures can help the
CCI in making a timely and effective intervention before the market irremediably tips.

4

The Committee also observes that such de novo ex-ante framework should be
implemented in a manner that does not hinder opportunities and incentives forinnovation for small enterprises, and that such enterprises are not burdened withadditional compliance obligations. The Committee recommends that the CCI’s
capacity for technical regulation in digital markets should be strengthened, and amechanism for inter-regulatory consultation be implemented.
We hope that this Report will help in building a broad consensus and understanding
among different stakeholders and assist in designing a robust and effective framework
for ensuring fair competition in the provision of core digital services in India.

Dr. Manoj Govil
Secretary, Ministry of Corporate Affairs, andChairperson, Committee on Digital Competition Law
New Delhi, 27 February, 2024

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6ACKNOWLEDGEMENTS

The Committee takes this opportunity to thank all its stakeholders who provided
insightful comments and suggestions and made presentations before the Committee
on the requirement for a separate Digital Competition Act. The Committee would also
like to thank the industry representatives, law firms, academicians, and other experts
who made their valuable suggestions on various issues including the need for the
introduction of an ex-ante regulatory framework for digital markets in India.
The Committee expresses gratitude to Dr. Saurabh Srivastava, Dr. Aditya
Bhattarcharjea, Shri Harsha Vardhana Singh, Ms. Pallavi Shardul Shroff, Shri Anand
S. Pathak, Shri Rahul Rai, Shri Haigreve Khaitan, Ms. Shweta Shroff Chopra, and Ms.
Nitika Dwivedi for providing a structured framework for the Committee’s discussions
and helping in the shaping of the Report. In addition to the members of the Working
Groups, the Committee benefitted immensely from the contributions made by special
invitees to the Committee. The Committee would like to express its gratitude towards
Shri Pankaj Jalote, ex-Director, IIIT, Delhi, fellow of Institute of Electrical andElectronics Engineers and Indian National Academy of Engineering, Dr. M.S. Sahoo,
ex-member, Competition Commission of India and ex-Chairperson, Insolvency andBankruptcy Board of India, Shri Amit Agrawal, the then Additional Secretary, MeitY,
Shri Ishtiyaque Ahmed, Sr. Adviser, NITI Aayog, Shri Darpan Jain, Joint Secretary,
Department of Commerce, Shri Rajeev Saksena, Joint Secretary, Department of
Economic Affairs, Shri Anupam Mishra, Joint Secretary, Department of Consumer
Affairs and Ms. Manmeet K. Nanda, the then Joint Secretary, Department of
Promotion of Industry & Internal Trade.
The Committee would like to specially place on record its appreciation for theexpertise, leadership, and support demonstrated by the Competition Commission ofIndia under the able leadership of its Chairperson, Ms. Ravneet Kaur and its members.
The Committee would like to place on record the valuable contribution made by theofficers of the Competition Commission of India - Ms. Jyoti Jindgar Bhanot, Advisor,
Dr. Bidyadhar Majhi, Advisor, Dr. Payal Malik and Shri Manish Mohan Govil, exAdvisors, Ms. Sayanti Chakrabarti, Director, and Shri Sachin Goyal and Ms. Bhawna
Gulati, Joint Directors.
The Committee appreciates the valuable contribution of the team from Vidhi Centre
for Legal Policy comprising Ms. Manjushree RM, Mr. Dhruv Somayajula, Ms.
Anuradha Bhattacharya, Ms. Vallari Dronamraju, Ms. Meha Chandra, and Ms. Urvi

7

Pathak in the review process by participation in the meetings for deliberation on legal
issues and conducting legal research, which was very useful to the Committee.
The Committee would like to make a special mention of the dedicated efforts put inby the team of officers of the Competition Division at the MCA comprising Shri Rajiv
Shankar, Director, Shri Manoj Kumar, Under Secretary, Shri Harsha N. Hedaoo, ExUnder Secretary, Shri Bal Mukund Kumar, Section Officer, Shri Dinesh Kumar, exAssistant Section Officer, and Shri Himanshu Sindhwani and Ms. Mansi Verma,
Young Professionals for collating suggestions, facilitating discussions, and providing
administrative and technical support for smooth functioning of the Committee.

Shri Manoj Pandey
Additional Secretary, Ministry of Corporate Affairs, andMember-Secretary, Committee on Digital Competition Law
New Delhi, 27 February, 2024

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9TABLE OF CONTENTSEXECUTIVE SUMMARY ................................................................................................... 15
ABBREVIATIONS............................................................................................................... 15
CHAPTER I: SETTING THE CONTEXT ........................................................................ 24
1. BACKGROUND ................................................................................................................. 24
A. The Competition Act, 2002................................................................................. 24
B. The Competition Law Review Committee and its recommendations ...... 25
C. The Competition (Amendment) Act, 2023 ...................................................... 25
D. The Parliamentary Standing Committee’s Report on ‘Anti-Competitive
Practices by Big Tech Companies’ ................................................................... 26
E.
Committee on Digital Competition Law and its mandate .......................... 28
I. CONSTITUTION OF THE COMMITTEE ON DIGITAL COMPETITION LAW ............ 28
II. 2019 - 2023: THE GROWTH OF THE INDIAN DIGITAL ECOSYSTEM ..................... 29
2. WORKING PROCESS OF THE COMMITTEE ...................................................................... 30
3. STRUCTURE OF THE REPORT ........................................................................................... 31
CHAPTER II: INDIAN REGULATORY LANDSCAPE FOR LARGE DIGITALENTERPRISES - EFFICACY AND GAPS ....................................................................... 33
1. BACKGROUND ................................................................................................................. 33
2. THE COMPETITION ACT, 2002 ........................................................................................ 33
A. Time-consuming nature of investigation and enforcement proceedings 34
3. SECTOR-SPECIFIC INSTRUMENTS GOVERNING LARGE DIGITAL ENTERPRISES ........ 36
A. The Foreign Direct Investment Policy and Foreign ExchangeManagement (Non-debt Instruments) Rules, 2019 ....................................... 37
B. The Information Technology (Intermediary Guidelines and DigitalMedia Ethics Code) Rules, 2021 and the Information Technology(Reasonable security practices and procedures and sensitive personal
data or information) Rules, 2011 ....................................................................... 38
C. The Digital Personal Data Protection Act, 2023 ............................................. 39
D. Draft National Data Governance Framework Policy ................................... 40
E.
Proposed Digital India Act ................................................................................ 40
F.
The Consumer Protection Act, 2019, the Consumer Protection (ECommerce) Rules, 2020, and the Consumer Protection (Direct Selling)
Rules, 2021............................................................................................................. 41
G. Draft E-Commerce Policy, 2019 ........................................................................ 42
H. Reserve Bank of India Master Directions on Prepaid Payment
Instruments, 2021 ................................................................................................. 43
I.
‘Guidelines on volume cap for Third Party App Providers (TPAPs) in
UPI’ issued by the National Payments Corporation of India ..................... 43
CHAPTER III: EMERGING INTERNATIONAL PRACTICE .................................... 45
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1.
2.

3.

4.

BACKGROUND ................................................................................................................. 45
EUROPEAN UNION........................................................................................................... 57a.
Ex-post enforcement under the Treaty on the Functioning of theEuropean Union, 2012 ......................................................................................... 58b.
Ex-ante enforcement under the Digital Markets Act, 2022 ......................... 59
I. SCOPE AND APPLICABILITY ................................................................................ 59
II. DESIGNATION AND THRESHOLDS ...................................................................... 59
a. Qualitative thresholds ............................................................................. 59
b. Quantitative thresholds ........................................................................... 60
III. DESIGNATION PROCESS AND REVIEW ................................................................ 60
IV. EX-ANTE OBLIGATIONS ...................................................................................... 61
a. Prohibited conduct .................................................................................... 61
b. Mandated conduct ..................................................................................... 61
c. Obligations on number-independent interpersonal communication
services ........................................................................................................ 62
V. SUSPENSION AND EXEMPTIONS .......................................................................... 62
VI. ENFORCEMENT AND MONITORING ................................................................... 63
a. DMA provisions to aid enforcement ...................................................... 63
b. Gatekeeper’s compliance function and EC monitoring powers under
the DMA ...................................................................................................... 63
c. Other measures to improve DMA implementation .............................. 63
VII. REMEDIES ......................................................................................................... 64
VIII. MERGER REVIEW ........................................................................................ 65
UNITED KINGDOM .......................................................................................................... 65
A. Proposed ex-ante measures under the Digital Markets, Competition andConsumers Bill, 2023 ........................................................................................... 66
I. SCOPE AND APPLICABILITY ................................................................................ 66
II. DESIGNATION AND THRESHOLDS ...................................................................... 66
III. DESIGNATION PROCESS AND REVIEW ................................................................ 67
IV. EX-ANTE CONDUCT OBLIGATIONS ..................................................................... 68
a. Obligatory conduct requirements ........................................................... 68
b. Preventive conduct requirements ............................................................ 69
V. EXEMPTIONS ....................................................................................................... 69
VI. ENFORCEMENT AND MONITORING ................................................................... 70
VII. REMEDIES ......................................................................................................... 70
GERMANY ........................................................................................................................ 72
A. Abuse of dominance and relative market power under the Act Against
Restraint of Competition, 1958 ......................................................................... 72
B. Amendments to the Act Against Restraint of Competition, 1958 tostrengthen enforcement in digital markets .................................................... 72
I. THE 9TH AMENDMENT ........................................................................................ 72
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II. THE 10TH AMENDMENT ...................................................................................... 73
C. Ex-ante competition framework under the 10th Amendment ..................... 73
I. SCOPE AND APPLICATION .................................................................................. 73
II. DESIGNATION PROCESS, THRESHOLDS AND REVIEW ......................................... 73
III. EX-ANTE OBLIGATIONS ...................................................................................... 74
IV. EXEMPTIONS ...................................................................................................... 74
V. ENFORCEMENT AND MONITORING .................................................................... 74
VI. REMEDIES ........................................................................................................... 75
11TH AMENDMENT TO THE ACT AGAINST RESTRAINT OF COMPETITION, 1958 .... 75
5. UNITED STATES ............................................................................................................... 75
A. Key enforcement trends in digital markets .................................................... 76
B. Policy and legislative reforms........................................................................... 77
I. THE AMERICAN INNOVATION AND CHOICE ONLINE ACT............................... 77
II. THE ENDING PLATFORM MONOPOLIES ACT..................................................... 78
III. THE OPEN APP MARKETS ACT ......................................................................... 78
C. Other legislations ................................................................................................ 79
D. Miscellaneous policy initiatives ....................................................................... 80
6. AUSTRALIA ...................................................................................................................... 81
A. Ex-ante framework under the Treasury Laws Amendment (News Mediaand Digital Platforms Mandatory Bargaining Code) Act, 2021 .................. 81
B. Proposed ex-ante framework under the 5th Digital Platform Services
Inquiry Report...................................................................................................... 82
7. JAPAN ............................................................................................................................... 83
8. SOUTH KOREA ................................................................................................................. 85
9. CHINA............................................................................................................................... 88
A. Anti-Monopoly Law, 2007 (as amended in 2022) .......................................... 88
B. Anti-Monopoly Guidelines for the Platform Economy, 2021 ..................... 88
C. Proposed ex-ante measures................................................................................ 89
CHAPTER IV: A FIT-FOR-PURPOSE COMPETITION REGIME FOR THE
INDIAN DIGITAL ECONOMY ....................................................................................... 91
1. THE NEED FOR EX-ANTE COMPETITION INTERVENTION IN DIGITAL MARKETS ...... 91
A. The complementary relationship between ex-ante and ex-post
enforcement .......................................................................................................... 91
B. The time-consuming nature of ex-post investigations ................................. 92
C. Narrow Remedies ................................................................................................ 92
2. TRADITIONAL MARKETS VS. DIGITAL MARKETS: THRESHOLD FOR INTERVENTION
93
A. Data as a resource ................................................................................................ 93
B. Data-Driven Network effects ............................................................................ 94
C. Economies of scale............................................................................................... 94
3. KEY FEATURES OF THE PROPOSED DIGITAL COMPETITION ACT ................................ 97
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A.
B.

Scope and applicability of the Draft DCB ...................................................... 97
Thresholds and criteria for designation as an SSDE .................................... 99
I. QUANTITATIVE THRESHOLDS .......................................................................... 100
a. Thresholds under the ‘significant financial strength’ test ................ 102
b. Thresholds under the ‘significant spread’ test .................................... 103
c. The need for quantitative thresholds specific to each Core Digital
Service........................................................................................................ 104
d. Quantitative thresholds to be periodically revised ........................... 105
e. Associate Digital Enterprises ................................................................ 106
II. QUALITATIVE CRITERIA .................................................................................... 108
C. Obligations and exemptions ........................................................................... 108
I. OBLIGATIONS ................................................................................................... 109
II. EXEMPTIONS ..................................................................................................... 111
a. Exemptions from obligations through regulations ............................ 111
b. Exemptions by the Central Government .............................................. 112
D. Enforcement and Remedies ............................................................................. 112
I. ENFORCEMENT ................................................................................................. 112
II. REMEDIES.......................................................................................................... 115
ANNEXURE I – OVERVIEW OF ACPs ......................................................................... 121
ANNEXURE II – ORDER CONSTITUTING THE COMMITTEE ........................... 124
ANNEXURE III – SUMMARY OF STAKEHOLDER SUBMISSIONS ................... 126
ANNEXURE IV – DRAFT DIGITAL COMPETITION BILL, 2024 .......................... 151

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14EXECUTIVE SUMMARY
The Competition Act, 2002 (Competition Act) primarily envisages an ex-post
framework of intervention wherein the Competition Commission of India (CCI)intervenes after the occurrence of an anti-competitive conduct. Such a framework was
designed at a time when the extent and pace of digitalisation as is witnessed today
could not be foreseen.
India has seen rapid digitalisation in the recent past owing to internet accessibility.
With more than 759 million reported active internet users, India has swiftly become
home to large digital market segments catering to users across sectors such as
healthcare, financial services, and retail. The growth of digital markets has also givenrise to large digital enterprises, which often operate as platforms that provide services
on multiple sides of a market.
Large digital enterprises and their unique business models have prompted a varietyof anti-competitive concerns that have been brought forth before the CCI. These
include unilateral and opaque policies on search rankings, and anti-competitive usageof aggregated data.
Against this backdrop, the Parliamentary Standing Committee on Finance presented
the 53rd Report on “Anti-Competitive Practices by Big Tech Companies” before the
Lok Sabha on 22nd December 2022 (Standing Committee Report).
The Standing Committee Report identified ten predominant anti-competitive
practices (ACPs) by large digital enterprises and examined the need for strengthening
India’s competition framework to address such practices. The Standing Committee
Report acknowledged that the dynamics of digital markets are underpinned by robust
network effects and increasing returns to scale. This often leads to a ‘winner-takesmost’ outcome where a leading player adopts strategies that curtail market
contestability, which reinforces its strength. As such, digital markets bear the risk of
becoming irreversibly polarised in favour of the incumbent.
The Standing Committee Report also observed that an ex-post approach may not be
sufficient to remedy such conducts in fast-paced digital markets. It recommended thatthe behaviour of large digital enterprises should be monitored ex-ante, with anemphasis on preventing such anti-competitive conducts from occurring. It further
recommended the introduction of a ‘Digital Competition Act’ to create a fair,transparent, and contestable digital ecosystem.
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Following the Standing Committee Report’s recommendation, the Ministry of
Corporate Affairs constituted the Committee on Digital Competition Law(Committee) to inter alia review whether existing provisions in the Competition Act
are sufficient to address the challenges in the digital economy and to examine whether
an ex-ante digital competition law is required.
During its deliberations, the Committee took note of the enforcement practice of the
CCI; the recommendations put forth in the Standing Committee Report; and thesubmissions it received from stakeholders on the need for an ex-ante competition
framework for digital markets. The Committee further examined various sectorspecific regulatory instruments that govern digital enterprises in India, and emerging
international practices on ex-ante competition frameworks.
The Committee found that the ex-post model of regulation under the Competition Act,by design, involves fact-finding and inquiry processes which are time-consuming.
Protracted enforcement proceedings hinder early detection and redressal. Given thetendency of digital markets to tip swiftly in favour of an incumbent, the Committee
recommended a regulatory strategy focussed on preventing anti-competitive conducts.
The key recommendations of the Committee are outlined below:(i)Introduction of a Digital Competition Act with ex-ante measures: The
Committee recommends the introduction of an ex-ante legislation specificallyapplicable to large digital enterprises, to supplement the Competition Act. Suchan ex-ante law should ensure that behaviours of large digital enterprises areproactively monitored, and that the CCI intervenes before instances of anticompetitive conduct transpire. A draft of the legislation (Draft DCB) as
prepared and deliberated upon extensively by the Committee is enclosed as
Annexure IV.

(ii)

Scope and applicability: The Committee proposes that the Draft DCB should
apply to a pre-identified list of Core Digital Services that are susceptible toconcentration. The Committee recommends that this list is drawn up basis the
CCI’s enforcement experience, market studies, and emerging global practices.
Keeping in mind the pace at which digital markets are progressing, such a list
is proposed as a Schedule to the Draft DCB in order to allow timely updations
by the Central Government.

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(iii)

Regulation of digital enterprises with ‘significant presence’: The Committee
recommends that the Draft DCB should only regulate enterprises which havea ‘significant presence’ in the provision of a Core Digital Service in India andthe ability to influence the Indian digital market. The Committee recommends
designating such enterprises as “Systemically Significant DigitalEnterprises” (SSDEs).

(iv)

Thresholds and criteria for designation as SSDEs: An enterprise is deemed an
SSDE if it passes a twin test demonstrating ‘significant presence’: (a) the‘significant financial strength’ test which comprises quantitative proxies of
economic power, i.e. India-specific turnover, global turnover, global market
capitalisation, and gross merchandise value; and (b) the ‘significant spread’ test
which evaluates the extent to which an enterprise has been present in theprovision of a Core Digital Service in India on the basis of the number of endusers and business users. The Draft DCB obligates enterprises to self-assess
their fulfilment of these thresholds and report the same to the CCI.
Additionally, the Draft DCB envisages residuary powers for designation in theform of ‘qualitative’ criteria for designating certain enterprises as SSDEs that
do not meet the quantitative thresholds but nonetheless have the ability tosignificantly influence the market in which they operate.

(v)

Associate Digital Enterprises: The Committee recommends that in cases where
enterprises providing Core Digital Services are part of a group, designation
may not be limited to just one enterprise in the group. Depending on the
involvement of different enterprises within the group in providing a Core
Digital Service, the Committee envisages two scenarios: first, where the holding
enterprise is designated as an SSDE and other enterprises within the group,
directly or indirectly involved in provision of the same Core Digital Services,
are designated as Associate Digital Enterprises to the SSDE (ADEs); and second,a non-holding enterprise most directly involved in providing the Core Digital
Service is designated as an SSDE and its holding enterprise and other group
entities directly or indirectly involved in providing the same Core Digital
Services are designated as its ADEs. In this regard, the Committee recommends
that the CCI be given flexibility to identify the appropriate enterprises for SSDEand ADE designations.

(vi)

Obligations: The Committee recommends an agile and principle-based
framework of ex-ante obligations under the Draft DCB. The specificities of theobligations as applicable to each Core Digital Service would be specified
through regulations drafted by the CCI through a consultative process. The
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Committee, cognisant that not all SSDEs and ADEs providing the same Core
Digital Service have the same degree of influence on the market within which
they operate, recommends that the regulations may provide for differential
obligations upon different SSDEs and ADEs depending on factors such as theirbusiness models and size of their user base.

(vii)

Exemptions: The Committee recommends that the grounds for exemption fromcomplying with the ex-ante obligations should be provided for in the statuteitself. The features of such exemptions should be specified through regulations
framed by the CCI, taking into account the particular Core Digital Service andrelated business models of SSDEs and their ADEs. The Committee also
recommends including a provision similar to Section 54 of the Competition Act
exempting certain classes of enterprises from the applicability of the statute.

(viii) Enforcement: The Committee recommends borrowing the procedural
framework from the Competition Act for the purposes of the Draft DCB, giventhat the enforcement of both these laws is to be entrusted with the CCI. The
Committee also strongly advises that the CCI must strengthen the capacity of
its Digital Markets and Data Unit with experts from the field of technology tokeep pace with the rapid evolution of digital markets. Further, the Committee
recommends instituting a separate bench within the National Company Law
Appellate Tribunal to ensure timely disposal of appeals filed against the CCI’sorders, particularly those relating to digital markets.
(ix)

Remedies: The Committee proposes that a monetary penalty for noncompliance with ex-ante obligations is restricted to a maximum of 10% of the
global turnover of the SSDE in line with the penalty regime under theCompetition Act. Additionally, in cases where the SSDE is part of a group ofenterprises, the Committee recommends that the ‘global turnover’ cap iscalculated in relation to the turnover of the entire group. The Committee
further recommends that the precise quantum of penalty be determined by the
CCI with due regard to the penalty guidelines under the Draft DCB. In
addition to the above, separate penalties have been provided forcontraventions resulting from incorrect reporting and vicarious liability of key
managerial persons.

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ABBREVIATIONS
5th DPSI Report
6th DPSI Report
7th DPSI Report
9th Amendment
10th Amendment
11th Amendment
ACCC
ACP
AICO
AML
App-Store Act
ARC
Bargaining Code

CA-04
CA-98
Canada Bureau
Canadian Competition Act
CCA
CCI
CDCL / Committee
Clayton Act
CLRC
CLRC Report
Competition Act
CMA

Fifth interim report under the Digital Platform
Services Inquiry
Sixth interim report under the Digital Platform
Services Inquiry
Seventh interim report under the Digital
Platform Services Inquiry
9th amendment to the Act Against Restraint ofCompetition, 1958
10th amendment to the Act Against Restraint ofCompetition, 1958
11th amendment to the Act Against Restraint ofCompetition, 1958
AustralianCompetition
andConsumerCommission
Anti-competitive practice identified in theStanding Committee Report
American Innovation and Choice Online Act
Anti-Monopoly Law, 2007
Amendments
to
the
South
KoreanTelecommunications Business Act, 2011
Act Against Restraint of Competition, 1958
Treasury Laws Amendment (News Media andDigital Platforms Mandatory Bargaining Code)Act, 2021
Competition Act, 2004
Competition Act, 1998
Competition Bureau of Canada
Competition Act, 1985
Competition and Consumer Act, 2010
Competition Commission of India
Committee on Digital Competition Law
Clayton Act, 1914
Competition Law Review Committee
Report submitted by the CLRC in 2019
Competition Act, 2002
Competition and Markets Authority
19

CPA 2019
CRTC

Consumer Protection Act, 2019
CanadianRadio-televisionandTelecommunications Commission
DG COMP
European Commission’s department forcompetition
DG CONNECT
European Commission’s department for techpolicyDMA
Digital Markets Act, 2022
DMCC
Digital Markets, Competition and Consumers
Bill, 2023
DMDU
Digital Markets and Data Unit
DMU
Digital Markets Unit
DOJUS Department of Justice
DPSI
Digital Platform Services Inquiry
Draft Classification Guidelines Classification and Grading of Internet Platforms
Draft DCB
Draft Digital Competition Bill, 2023
Draft NDGFP
Draft National Data Governance Framework
PolicyDraft
Responsibility Guidelines
toImplementing
Subject
Guidelines
Responsibility for Internet Platforms
E-Commerce Rules, 2020
Consumer Protection (E-Commerce) Rules, 2020
EC
European Commission
ECMR
Council Regulation (EC) No. 139/2004 of 20
January 2004 on the control of concentrations
between undertakings (The EC Merger
Regulation)
EPM
Ending Platform Monopolies Act
EU
European Union
EU P2B Regulation
Regulation on Platform-to-Business Relations,
2019
FCO
Bundeskartellamt or the Federal Cartel Office
FDI
Foreign direct investment
FDI Policy
Foreign Direct Investment Policy and Foreign
Exchange Management (Non-debt Instruments)
Rules, 2019
FTA
Fair Trade Act
FTC
Federal Trade Commission
FTCA
Federal Trade Commission Act, 1914

20

Furman Committee

Digital Competition Expert Panel headed byProfessor Jason Furman
GDPR
General Data Protection Regulation, 2016
GMV
Gross Merchandise ValueHJC Subcommittee
House Judiciary Committee's Subcommittee on
Antitrust, Commercial, and Administrative Law
IDMO
India Data Management Office
IT RulesInformation
Technology(Intermediary
Guidelines and Digital Media Ethics Code)
Rules, 2021
Japan Anti-monopoly Act
Act on Prohibition of Private Monopolizationand Maintenance of Fair Trade, 1947
Japan Ministerial Ordinance or Ordinance No. 1 in 2021 published by the
JMO
Ministry of Economy, Trade and Industry
KCC
Korea Communications Commission
KFTC
Korea Fair Trade Commission
MCA
Ministry of Corporate Affairs
MeitY
Ministry of Electronics and Information
Technology
METI
Ministry of Economy, Trade and Industry
MRFTA
Monopoly Regulation and Fair Trade Act, 1980
MRTP Act
Monopolies and Restrictive Trade Practices Act,
1969
NCLAT
National Company Law Appellate Tribunal
NIICS
Number-independentinterpersonalcommunication services
NPCI
National Payments Corporation of India
NPCI UPI Guidelines
Guidelines on volume cap for Third Party App
Providers (TPAPs) in UPI’ issued by the National
Payments Corporation of India
OAM
Open App Markets Act
OS
Operating system
PCI
Pro-Competition Intervention
Platform Guidelines
Anti-Monopoly Guidelines for the Platform
Economy, 2021
PPI
Prepaid payment instrument
PSCAM
Paramount significance for competition acrossmarkets
PSP
Payment service provider
21

Raghavan Committee

High-Level Committee on Competition Policy
and Law chaired by Mr. S.V.S Raghavan in 1999
Raghavan Committee Report
Report submitted by the Raghavan Committee in
2000
Review Guidelines
Review Guidelines for Regulations Against
Abuse of Dominance and Unfair Trade Practiceby Online Platform Businesses
RBI
Reserve Bank of India
RBI PPI Master Direction
Reserve Bank of India Master Directions on
Prepaid Payment Instruments, 2021
ReportReport of the Committee on Digital Competition
Law
SDP Guidelines
Guidelines on Measures to be Taken by Specified
Digital Platform Providers to Promote Mutual
Understanding in Transactional Relationships
with User Providers of Goods, etc., 2021
Sherman Act
Sherman Act, 1890
SIDI
Systemically Important Digital Intermediary
SMS
Strategic Market Status
SPDI Rules
Information Technology (Reasonable security
practices and procedures and sensitive personal
data or information) Rules, 2011
SSDE
Systemically Significant Digital EnterpriseStanding Committee Report
53rd Report on ‘Anti-Competitive Practices by
Big Tech Companies’ presented by the
Parliamentary Standing Committee on Financebefore the Lok Sabha on 22nd December 2022
Telecommunications Business South Korean Telecommunications Business Act,
Act
2011
TFDP ActAct on Improving Transparency and Fairness ofDigital Platforms, 2020
TFEU
Treaty on the Functioning of the European
Union, 2012
TFTC
(Taiwan) Fair Trade Commission
TPAP
Third party app provider
UK
United Kingdom
UK DMU
Digital Markets Unit sought to be housed within
the Competition and Markets Authority in the
UK
UPI
Unified Payments Interface
22

USA
White House Executive Order

The United States of America‘Executive Order on Promoting Competition in
the American Economy’ issued by the WhiteHouse on 9th July 2021

23

CHAPTER I: SETTING THE CONTEXT
1.

BACKGROUNDA.

The Competition Act, 2002

1.1.

The introduction of the New Economic Policy in 1991 opened up the Indian
market. Economic reforms shifted their focus towards de-regulation of various
industries and fostering competition amongst market players. In 1999, theHigh-Level Committee on Competition Policy and Law, chaired by Shri S.V.S
Raghavan (“Raghavan Committee”), was constituted to reform theMonopolies and Restrictive Trade Practices Act, 1969 (“MRTP Act”). The
Raghavan Committee submitted its report in 2000 (“Raghavan Committee
Report”) wherein it noted that the MRTP Act had become antiquated, and wasinadequate for promoting competition in Indian markets and addressing
emerging forms of anti-competitive conduct. It recommended large-scale
reforms to bring Indian competition law in line with the new domestic
economic policies and global best practices.1 Based on its recommendations, the
MRTP Act was repealed and the Competition Act, 2002 (“Competition Act”)
was enacted to “prevent practices having adverse effect on competition, promote andsustain competition in markets, to protect the interests of consumers and to ensure
freedom of trade carried on by other participants in markets, in India”.2

1.2.

The enactment of the Competition Act led to the establishment of theCompetition Commission of India (“CCI”) and the Competition Appellate
Tribunal, which was later replaced by the National Company Law Appellate
Tribunal (“NCLAT”). The Competition Act in antitrust matters adopts an expost3 approach (wherein regulatory intervention happens after the occurrenceof an anti-competitive conduct) in prohibiting anti-competitive agreements(Section 3) and abuse of dominance (Section 4). It is noteworthy that theCompetition Act does not seek to prohibit the dominance of an enterprise per
se but rather the abuse of such dominance by an enterprise.4

1.3.

Combinations above certain thresholds specified under the Competition Act5
follow a suspensory regime wherein such combinations cannot take effectwithout the CCI’s approval. It follows an ex-ante model of regulation6 wherein
the CCI intervenes before the consummation of a combination to prevent theoccurrence of any potential anti-competitive conduct that may ensue.

24

B.

The Competition Law Review Committee and its recommendations

1.4.

Following a decade of enforcement under the Competition Act, the Ministry of
Corporate Affairs (“MCA”) constituted the Competition Law Review
Committee (“CLRC”) to review the Indian competition regime and provide
recommendations to update and amend the key substantive and proceduralprovisions of the Competition Act. The CLRC presented its report in 2019encapsulating its recommendations for introducing regulatory best practices in
the competition law framework in India (“CLRC Report”). The CLRC also
discussed issues relating to new-age digital markets and ‘big data’.

1.5.

Keeping in view the fact that the digital economy in India was still at a nascentstage, the CLRC opined that it may be premature to carry out legislativeinterventions to the Competition Act to regulate digital entities at such ajuncture, and instead suggested a periodic review of global emerging trends
and their policy implications for India.7 For instance, the CLRC had deliberated
if Section 19(4) of the Competition Act, which specifies an inclusive list offactors for evaluating whether an enterprise enjoys a dominant position, should
be amended to include ‘control over data’ or ‘network effects’ in light of thecompetitive advantage presented to large digital enterprises by suchconsiderations. However, the CLRC had concluded at the time that Section
19(4) was inclusive in nature and imparted sufficient flexibility to take suchnovel factors into consideration while assessing dominance.8
C.

The Competition (Amendment) Act, 2023

1.6.

Based on the recommendations of the Report of the CLRC, the Competition Act
was amended and the Competition (Amendment) Act, 2023 was notified in theGazette of India on 11th April 2023.9

1.7.

In the context of digital markets, the CLRC Report had acknowledged that thescope of Section 3 of the Competition Act required widening in order tocomprehensively include all types of anti-competitive restraints andagreements, particularly those pertinent to digital markets, which may falloutside the ambit of agreements recognised under Section 3.10 Its
recommendation to include ‘other agreements’ under Section 3(4) of theCompetition Act so as to enlarge its scope was accepted and implemented
through the Competition (Amendment) Act, 2023.11

25

1.8.

In addition, the CLRC had recognised that the acquisition of smaller successful
start-ups by dominant firms in the digital space tends to escape regulatory
scrutiny because they often do not meet the asset and turnover-based
thresholds provided under the Competition Act and because the CCI does nothave any power to assess transactions which are not required to be notified. 12
In light of the same, the CLRC Report had recommended for the introductionof new thresholds based on broad parameters for merger notification under theCompetition Act.13 Accepting this recommendation, the Competition(Amendment) Act, 2023 introduced a deal value threshold of INR 2,000 crore
for notifying a transaction to the CCI if the entity being acquired has‘substantial business operations’ in India.14

1.9.

The Competition (Amendment) Act, 2023 has also expanded the scope of‘relevant market’ under Sections 19(6) and 19(7) of the Competition Act byspecifying factors such as the nature of services and costs associated withswitching demand or supply.15
D.

The Parliamentary Standing Committee’s Report on ‘Anti-Competitive
Practices by Big Tech Companies’

1.10. Digital markets in India have seen exponential growth in the recent past, but
this has not been without problems. Numerous complaints against large digitalenterprises have been levelled by various individuals and businesses before the
CCI.16 Reportedly, several industry associations and trade unions have also
raised concerns against digital enterprises before other regulatory bodies on
account of unfair trade practices, unilateral and discriminatory policies, andviolation of consumer rights.17
1.11. Against this backdrop, on 22nd December 2022, the 53rd Report on ‘AntiCompetitive Practices by Big Tech Companies’ was presented by the
Parliamentary Standing Committee on Finance before the Lok Sabha(“Standing Committee Report”).18 The Standing Committee Report examined
the need for the competition law framework in India to evolve with the rapid
pace of digitalisation of markets, the ‘network effects’ of large digitalenterprises, and their ability to indulge in anti-competitive practices.
1.12. The Standing Committee Report recognised that digital markets, in comparison
with traditional markets, are driven by strong network effects and tend to ‘tip’
in a swift manner, often leading to a ‘winner-takes-most’ outcome.19 The
leading players in a digital ecosystem are more prone to resort to practices
26which foreclose competition, reduce market contestability, and raise barriers
for new entrants in the market.20 Given the pace at which such markets evolve,
an ex-post regime may not be effective to remedy the irreversible tipping ofmarkets in favour of large digital enterprises. The Standing Committee Reportthus acknowledged the need for a comprehensive ex-ante competition law toensure a competitive structure for Indian digital markets.21
1.13. The Standing Committee Report identified Ten Anti-Competitive Practices(“the ACPs”) undertaken by large digital enterprises to abuse and consolidate
their position in digital markets:22 (i) anti-steering provisions; (ii) platformneutrality / self-preferencing; (iii) adjacency / bundling and tying; (iv) data
usage (use of non-public data); (v) pricing / deep discounting; (vi) exclusive
tie-ups; (vii) search and ranking preferencing; (viii) restricting third-party
applications; (ix) advertising policies; and (x) acquisitions and mergers.
1.14. The Committee is of the opinion that only the first nine ACPs listed above
should be discussed in this Report and that anti-competitive mergers andacquisitions do not need to be dealt with extensively in this Report since theCompetition (Amendment) Act, 2023 sufficiently addressed the same byintroducing a deal value threshold for notification of transactions to the CCI.23
1.15. A table outlining brief explanations of the ACPs is provided below:
S. No.
1.

ACP
Anti-steering

2.

Platform
neutrality / Selfpreferencing

3.

Adjacency
Bundlingtying

4.

Data usage (use of
non-public data)

5.

Pricing / Deep
discounting/
andExplanation
Exclusionary behaviour that hinders business
users and consumers from switching to thirdparty service providers.
A digital enterprise according favourable
treatment to its own products on its own
platform, thus creating a conflict of interest.
Combining or bundling core or essential
services with complementary offerings, thus
forcing users to buy related services.
Using personal data for consumer profiling tooffer targeted online services and products,
thus raising data privacy concerns.
Predatory pricing strategies, or intentionallysetting prices below cost price to exclude
competitors.

27

S. No.
6.

7.

8.
9.

ACP
Exclusive tie-ups

Explanation
Exclusive agreements with business users or
sellers, thus preventing them from dealing
with other enterprises.
Searchand Controlling search ranking to prioritiserankingsponsored or own products and reducing thepreferencing
visibility of other products.
Restricting third- Restricting users from accessing or utilising
party applications third-party applications.
Advertising
There appears to be increasing market
Policies
concentration, consolidation, and integration
across many levels in the ad-tech supply chain
which gives the incumbent platform an unfair
edge over the market.

A table containing a more detailed explanation of each ACP is attached as
Annexure I to this Report.
1.16. The Standing Committee Report further recommended identifying such large
incumbents as ‘Systemically Important Digital Intermediaries’ (“SIDIs”) on thebasis of revenue, market capitalisation, and number of active business and end
users;24 the implementation of a ‘Digital Competition Act’ to ensure
contestability in digital markets;25 and the establishment of a ‘Digital Markets
Unit’ within the CCI to closely monitor SIDIs and provide recommendations to
the MCA on their designation26.
E.

Committee on Digital Competition Law and its mandate

I.

CONSTITUTION OF THE COMMITTEE ON DIGITAL COMPETITION LAW

1.17. Against this backdrop detailed above and the growing consensus on thelimitations of the Competition Act in its present form to address the ACPs in atimely manner,27 the MCA constituted the Committee on Digital Competition
Law (“CDCL / Committee”) to: (i) review whether existing provisions in theCompetition Act and the rules and regulations framed thereunder are sufficient
to deal with the challenges that have emerged from the digital economy; (ii)examine the need for an ex-ante regulatory mechanism for digital markets
through a separate legislation; (iii) study the international best practices onregulation in the field of digital markets; (iv) study other regulatory regimes /institutional mechanisms / government policies regarding competition in28

digital markets; (v) study the practices of leading players / SIDIs which limit
or have the potential to cause harm in digital markets; and (vi) study any othermatters related to competition in digital markets as may be considered relevantby the Committee. A copy of the constitution order of the Committee is at
Annexure II.
1.18. In keeping with its mandate, the Committee has examined the enforcement
actions and decisional practice of the CCI and taken cognisance of the Standing
Committee Report and the observations and recommendations made in respectof identified ACPs by digital market players. It has also considered the views
and suggestions received from a wide range of stakeholders highlighting theunfair practices carried out by various large digital enterprises. The Committee
has further studied sector-specific instruments in India regulating digital
entities in a piecemeal fashion and deliberated on the international approaches
to ex-ante regulation of digital markets.
II.

2019 - 2023: THE GROWTH OF THE INDIAN DIGITAL ECOSYSTEM

1.19. The Committee noted that the COVID-19 pandemic significantly affected theIndian digital economy with swift development in digital markets and ecommerce.28 Social distancing guidelines led to heavy reliance on deliveries
from e-commerce platforms and almost exclusively in some areas such as
groceries and food, medicines, entertainment, digital health services, online
learning, contactless digital payments, etc., which had the effect of driving new
consumer bases online.29 Thus, the pandemic considerably changed the face ofmarketplaces in India and turned several businesses into online platforms.30
The Committee noted that there were reportedly 759 million active internet
users in India who accessed the internet at least once a month in 2022 31
compared to approximately 499 million users in 201832. The merging oftechnology with mainstream public policy and governance with theintroduction of the CoWIN platform, DigiLocker, and Aadhaar for better
efficacy has also accelerated the development of India as a digital economy.33
1.20. During the course of its deliberations, the Committee noted that thedigitalisation of the Indian economy has led to the emergence of start-ups
which have immense capacity to contribute substantially to the growth of thecountry’s GDP. Start-ups not only create wealth and employment, but they also
foster innovation in order to succeed against well-established players. Today,
India has over 1.19 lakh start-ups and counting.34

29

1.21. The Committee observed that India’s Digital Public Goods such as Aadhaar,
Unified Payments Interface (“UPI”), and Open Network for Digital Commerce,have created a platform for Indian start-ups to build products and solutions
which serve the remotest parts of the country and drive India towards a trilliondollar digital economy. The Committee also took note of the Indian IT services
industry, which grew from under USD 100 million to USD 250 billion inrevenue in barely three decades, creating the world’s largest pool of highquality tech talent.35
1.22. However, the Committee noted that the digital market is increasingly
becoming concentrated with a few large digital enterprises that wield immense
control over the market.36 This gives them an edge over other business users
and start-ups. This ultimately makes smaller digital enterprises and start-ups
dependent on large digital enterprises and gives rise to an imbalance inbargaining power and information asymmetry in the digital market.
1.23. In light of this, the Committee feels that it is important to ensure that policy
measures are carefully crafted only to address anti-competitive conduct byexisting large digital enterprises, and to not throttle the growth of emerging
digital enterprises that have the capacity to grow into global players.
2.

WORKING PROCESS OF THE COMMITTEE

2.1.

The Committee first met on 22nd February 2023 and decided that it would
benefit from extensive stakeholder consultations. Accordingly, these
consultations took place on 4th March 2023, 11th March 2023, and 24th March2023 where several representatives from trade and industry associations ofsmall businesses, think tanks, and large digital conglomerates presented theirviews on the need for an ex-ante digital competition law. Various
recommendations by such stakeholders included strengthening the powers of
the CCI, appointment of subject-matter experts at the CCI, and designation oflarge digital enterprises as gatekeepers with specific obligations to ensure thatthey do not indulge in the ACPs identified above. A table that summarises the
key submissions and suggestions of each of the stakeholders is at Annexure III.

2.2.

The Committee noted that certain representations were received subsequent tothe conclusion of stakeholders’ consultations with a request to provide inputs
to the Committee on the need for an ex-ante competition framework for large
digital enterprises. The Committee has taken note of such representations. The
Committee felt that the Report may be placed in public domain, inviting30

comments wherein all stakeholders should have an opportunity to provide
their suggestions / views in the spirit of participatory governance.
2.3.

Following stakeholders’ presentations, the Committee met, discussed, anddeliberated on the extant competition law framework in India and its ability toensure contestability in digital markets. The Committee formed four subgroups which analysed different dimensions encompassing such subject
matter. The Committee also examined other existing statutory instruments thathave interfaces with digital markets regulation and consequently on ensuring
competition in such markets. The Committee then proceeded to discuss thecontours of a new Digital Competition Act for India at its meetings held on
various dates beginning 13th April 2023.

2.4.

The Committee has benefitted from wide-ranging and diverse discussions
amongst the members and with the stakeholders who have appeared before theCommittee. The members of the Committee naturally did not hold identicalviews on all matters included in the Report. In particular, the CCI Chairperson,
who is a member of the Committee, recused herself from expressing views on
matters related to such specific cases that are, or could, in future, come up
before the CCI or its Director General for consideration. The broad views /consensus view of the Committee are reflected in this Report.

2.5.

The MCA engaged Vidhi Centre for Legal Policy to assist the Committee inreaching informed decisions by carrying out legal research.

3.

STRUCTURE OF THE REPORT

3.1.

This Report is divided into four chapters. Chapter I traces the development ofcompetition law in India and delves into the need for the formation of theCommittee along with its terms of reference and working process. Chapter II
analyses the extant framework under the Competition Act as well as key sectorspecific instruments, and their efficacy in regulating ACPs in digital markets.
Chapter III examines international practices and alternative models which haveemerged in regulating large digital enterprises in emerging tech economies.
Chapter IV provides a comprehensive overview of the key deliberations andrecommendations of the Committee in respect of a separate digital competition
law.

3.2.

The Report also contains four annexures: Annexure I providing a detailed
explanation of the ACPs; Annexure II comprising the order dated 6th February312023 constituting the Committee;37 Annexure III providing a summary of the
stakeholder submissions; and Annexure IV containing the Draft Digital
Competition Bill as prepared by the Committee.

32

CHAPTER II: INDIAN REGULATORY LANDSCAPE
FOR LARGE DIGITAL ENTERPRISES - EFFICACYAND GAPS1.

BACKGROUND

1.1.

The Committee notes that the regulation of large digital enterprises in India iscarried out under a host of different statutory instruments, whose enforcement
is vested with a multitude of ministries and regulators. The Committee also
notes that such a fragmented approach appears inevitable given that
digitalisation of markets cuts across various sectors. Prior to deliberating on theneed for a new digital competition law, the Committee thought it fit to examine
the key statutory and policy instruments applicable to digital enterprises inIndia, and their efficacy and gaps in regulating ACPs.

1.2.

In light of the above, the Committee at first examined the extant competition
framework and its limitations in addressing the peculiarities of the digital
economy. The Committee then assessed the following instruments insofar as
their applicability to ACPs by digital enterprises is concerned: (i) the Foreign
Direct Investment Policy and Foreign Exchange Management (Non-debt
Instruments) Rules, 2019 (“FDI Policy”); (ii) the Information Technology(Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“ITRules”) and the Information Technology (Reasonable security practices andprocedures and sensitive personal data or information) Rules, 2011 (“SPDI
Rules”); (iii) the Consumer Protection Act, 2019 (“CPA 2019”), the Consumer
Protection (E-Commerce) Rules, 2020 (“E-Commerce Rules, 2020”), and theConsumer Protection (Direct Selling) Rules, 2021 (“Direct Selling Rules,
2021”); (iv) the proposed Digital India Act (“DIA”); (v) the Digital Personal
Data Protection Act, 2023 (“DPDP Act”); (vi) the Draft National Data
Governance Framework Policy (“Draft NDGFP”); (vii) the Draft E-Commerce
Policy, 2019 (“Draft E-Commerce Policy”); (viii) Reserve Bank of India Master
Directions on Prepaid Payment Instruments, 2021 (“RBI PPI Master
Direction”); and (ix) the ‘Guidelines on volume cap for Third Party App
Providers (TPAPs) in UPI’ issued by the National Payments Corporation ofIndia (“NPCI UPI Guidelines”).

2.

THE COMPETITION ACT, 2002

33

2.1.

The Competition Act aims to “promote and sustain competition in markets, toprotect the interests of consumers and to ensure freedom of trade carried on by otherparticipants in markets, in India”.38 Section 3 of the Competition Act seeks toprohibit anti-competitive agreements between enterprises, while Section 4seeks to prohibit abuse of their position by dominant enterprises. Section 5
relates to combinations wherein parties intending to enter into a combination
are required to notify and seek approval from the CCI prior to consummationof the transaction if the thresholds in Section 5 of the Competition Act are
triggered. The Competition Act follows an ex-post approach under Sections 3
and 4 where anti-competitive agreements and abuse of dominance are
scrutinised after such contraventions have occurred.39 All combinations are
regulated ex-ante.40

2.2.

Under the current scheme of abuse of dominance assessment, the practices
enumerated in Section 4 of the Competition Act are anti-competitive only if
carried out by dominant entities. Therefore, establishing ‘dominance’ is a precondition for assessing whether a certain practice is abusive under Section 4 of
the Competition Act. Section 4 defines dominance as a position of market
strength enjoyed by an enterprise in its relevant market that allows it to operate
independently of competitive forces.41 Therefore, while assessing dominance,
the first step for the CCI is to delineate the ‘relevant market’ within which thestrength of the enterprise is examined.42 Following this, the CCI assesses
whether the enterprise enjoys dominance in the defined ‘relevant market’ byaccounting for factors enumerated in Section 19(4) of the Competition Act,43 ona case-by-case basis.
A.

Time-consuming nature of investigation and enforcement proceedings

2.3.

The Committee deliberated on how the present ex-post framework under theCompetition Act is not designed to facilitate timely and speedy redressal ofanti-competitive conduct by digital enterprises given the extensive fact-finding
and a tiered adjudicatory process involved in ex-post enforcement proceedings.
The Committee further discussed the factors which contribute to prolonged
enforcement proceedings.

2.4.

First, the Committee noted that the structure of the Competition Act itself
involves several stages in enforcement proceedings, i.e. formation of a prima
facie view by the CCI;44 investigation by the Director General;45 and passing of
final order by the CCI,46 without specifying outer timelines for the same47.

34

2.5.

For instance, the Committee noted that in one case involving allegations ofabuse of dominant position by a large digital enterprise in the market forlicensable operating system (“OS”) for smart mobile devices in India,48 the
Director General submitted their investigation report to the CCI after more than
two years of passing of order under Section 26 of the Competition Act by the
CCI49. The CCI passed final order50 imposing monetary penalty on theenterprise in question a year later in October 202251. The Committee noted that
this matter was filed before the CCI in 2018, and even after a period of five
years, it is yet to reach finality as the matter is currently sub-judice before theSupreme Court.52

2.6.

Similarly, in another case which involved alleged contraventions of Section 4of the Competition Act, information was filed before the CCI in 2012; the CCI
adjudicated on the matter in 2018 and found the concerned digital enterprise to
be abusing its dominant position and thus, imposed a penalty.53 However, evenafter a period of 11 years, the matter has not reached finality and the same iscurrently sub-judice before the NCLAT.54

2.7.

Further, the Committee noted that despite the CCI passing several orders since2019 wherein prima facie evidence of anti-competitive behaviour in digitalmarkets was inferred and an investigation was directed to be conducted,55 finalorders under Section 27 of the Competition Act have only been passed in three
instances56. Of these, one order is pending final disposal before the Supreme
Court57 and the rest are pending adjudication before the NCLAT58. The
Committee, considering the pace of digital markets, alluded to the propensityof such markets to ‘tip’ irreversibly in favour of the dominant enterprise. For
quicker enforcement in digital markets, the Committee noted that the CCI
should be equipped with appropriate tools for the early detection of anticompetitive conduct.

2.8.

Second, the Committee observed that the complexity of delineating the ‘relevantmarket’ and assessing the dominance of digital enterprises adds substantiallyto the time taken for redressal of grievances against such enterprises. 59 The
delineation of relevant market is an evidence-based exercise wherein the CCI
scopes the strength of a digital enterprise by assessing the availability of
substitutes to the enterprises’ services in a given geographical market.60 The
purpose of such an assessment is to evaluate the enterprise’s market strength
relative to its competitors operating in the same relevant market. The
Committee noted that digital enterprises, by design, are ‘multi-sided’ andprovide distinct yet interrelated services to both consumers and business users.
35

As such, the assessment of what constitutes a ‘relevant market’ for the purposesof an enterprise that is operational on multiple sides of the platform in a given
transaction, is a time-intensive exercise.61
2.9.

Additionally, the Committee noted many inherent peculiarities of digitalmarkets such as multi-sidedness, cross and same-side network effects, zeroprice services, and access to vast repositories of consumer data. The Committee
noted that these features have a unique potential to rapidly fortify the positionof existing incumbents. As such, large digital enterprises which are not‘statutorily’ dominant but which may nonetheless wield the ability to influencemarkets may therefore escape scrutiny.62

2.10. The Committee observed and appreciated the CCI’s ongoing efforts inaccounting for the peculiarities such as the role of ‘big data’ in reinforcing
market strength63 and the impact of pronounced network effects of multi-sided
platforms in raising high barriers to entry in the market64. The Committee was
especially appreciative of the CCI’s ingenious way to examine certain conductsof large digital enterprises, especially those operating duopoly or concentrated
oligopolistic market structures, under Section 3(4) of the Competition Act.65
However, despite the CCI’s best efforts, analysing a case under Section 3(4) of
the Competition Act raises two main challenges. First, only conduct whichflows from an agreement may be examined under the provisions of Section 3(4)of the Competition Act; and second, Section 3(4) of the Competition Act requires
an explicit demonstration of appreciable adverse effect on competition, which
would further add to the time taken for investigating cases.
2.11. In line with the deliberations above and taking into account the pace atwhich the Indian digital market is evolving, the Committee feels that thepowers of the CCI under the present ex-post model may not sufficiently
enable early detection and intervention required to prevent digital markets
from irreversibly tipping. As such, the Committee is of the view that new
tools that strengthen and supplement the CCI’s existing ex-post powers are
the need of the hour. Although the ex-ante framework may still be subjected
to judicial interventions, it will be a much more efficient market correction
mechanism compared to Sections 3 and 4 of the Competition Act which areessentially ex-post interventions.
3.

SECTOR-SPECIFIC INSTRUMENTS GOVERNING LARGE DIGITAL ENTERPRISES

3.1.

The Committee noted the features of various sector-specific instruments
regulating digital enterprises in a sporadic manner and the points of interface
36

such instruments have with the extant competition law framework in India andtheir limitations in regulating digital markets as a whole.
A.

The Foreign Direct Investment Policy and Foreign ExchangeManagement (Non-debt Instruments) Rules, 2019

3.2.

The FDI Policy aims to encourage economic development by attracting foreign
direct investment (“FDI”) in India and augmenting domestic capital. Amongst
others, the FDI Policy imposes certain conditions on foreign e-commerce
players in order to maintain a level playing field between domestic and foreign
e-commerce entities. For instance, though 100% FDI is permitted in e-commerce
activities under the automatic route, foreign e-commerce enterprises can only
engage in business-to-business transactions and not in business-to-consumertransactions.66 Additionally, FDI is permitted in the marketplace model, i.e. theprovision of a platform which acts as an intermediary between buyers andsellers, but not in the inventory-based model wherein the stock is owned by the
e-commerce entity itself and sold directly to consumers.67

3.3.

The Committee observed that the FDI Policy seeks to address the practices ofself-preferencing and preferential listing which may be indulged in by large ecommerce entities. Such entities may favour their own labels by displaying
them more prominently on their platforms, thus undermining platformneutrality and increasing barriers to competition. Under the FDI Policy, aforeign e-commerce entity providing an online marketplace is not permitted toexercise ownership or control over the inventory.68 Any services, including
logistics, warehousing, advertisement / marketing, etc. can only be provided
by e-commerce marketplaces to business users in which they have equity
participation or common control on an arm’s length basis, and in a fair and nondiscriminatory manner, in order to maintain a level playing field. 69
Furthermore, the FDI Policy also disincentivises potentially anti-competitive
vertical consolidation in the e-commerce space by prohibiting marketplace
entities from exercising ownership over inventory, including through equity
participation, in seller enterprises on the marketplace.70

3.4.

The Committee further noted that in prohibiting foreign e-marketplaces fromdirectly or indirectly influencing the sale price of goods or services, 71 or
requiring fair and non-discriminatory cash back policies, the FDI Policy strives
to restrain predatory pricing and deep discounting tactics which may be
employed by large digital enterprises. The FDI Policy also seeks to prevent
foreign e-commerce entities from entering into exclusive arrangements with37

certain vendors, thus foreclosing competition, by restraining them fromcompelling any seller to sell products on their platforms exclusively.72
3.5.

The Committee discussed the limitations of the FDI Policy in terms of an exante tool to regulate digital markets and concluded that the FDI Policy has avery narrow ambit in that it only covers certain anti-competitive conduct as
described above in the e-commerce space. It does not include within its
purview large platform enterprises operating in multi-sided markets such as
digital search engines, social media platforms, online private messaging, media
referral services, digital advertising, video-sharing platform services, etc. In
addition, the FDI Policy does not apply to domestic e-commerce marketplaces
but only to foreign-funded e-commerce entities in India, thereby further
constricting its regulatory sphere.

3.6.

The Committee further observed that any violation of FDI norms is enforcedby the Enforcement Directorate under the penal provisions of the Foreign
Exchange Management Act, 1999. However, the obligations applicable to ecommerce entities are notified by the Department for Promotion of Industry
and Internal Trade, thus leading to uncertainty amongst market players
regarding its enforcement.73 Most importantly, the FDI Policy does not address
the collection, storage, and usage of personal and sensitive data by online
marketplaces from the point of view of competitive harm.
B.

The Information Technology (Intermediary Guidelines and DigitalMedia Ethics Code) Rules, 2021 and the Information Technology(Reasonable security practices and procedures and sensitive personal
data or information) Rules, 2011

3.7.

The IT Rules aim to regulate news aggregators, online gaming intermediaries,
publishers of news and current affairs content and online curated content,
significant social media intermediaries74 and social media intermediaries. The
SPDI Rules protect sensitive personal data collected by body corporates.

3.8.

The Committee observed that large digital enterprises could prevent
consumers from using third-party applications by curbing their installation,
thus undermining competition in the market and denying market access tothird-party competitors. For instance, the IT Rules provide that an intermediaryshould take all reasonable measures to secure its computer resource; that itshould not knowingly deploy, install, or modify the technical configuration of
a computer resource; and that it should not become a party to any act that may
change the normal course of operation of the computer resource than what it is38

supposed to perform.75 Such measure has been implemented from theperspective of securing the resource and its functioning. However, there is noprovision which requires large digital intermediaries to demonstrate thenecessity of restricting installation of third-party applications by consumers.
3.9.

In respect of the SPDI Rules, the Committee observed that though the rules
provide measures for disclosure and transfer of sensitive personal data by anenterprise to any third party with the prior consent of the data provider, they
do not adequately address the usage of such sensitive and personal data bylarge digital enterprises for commercial purposes / targeted advertising andthe cross-usage of personal data between core service and related services oflarge digital enterprises. Such practices may pose large anti-competitive risks
and undermine the privacy of consumers.

3.10. As a potential tool for ex-ante antitrust enforcement, the Committee deliberated
that the IT Rules and SPDI Rules have a limited mandate wherein most ACPs
engaged in by large digital enterprises across most sectors (such as the ecommerce sector) are not addressed. The IT Rules only apply to specific typesof digital intermediaries and the obligations imposed on such intermediaries
are mostly consumer welfare–centric.
C.

The Digital Personal Data Protection Act, 2023

3.11. The DPDP Act came into force on 11th August 2023.76 The DPDP Act applies tothe processing of digital personal data within the territory of India where thepersonal data is collected in: (i) digital form or (ii) in non-digital form anddigitised subsequently, as well as outside India, if such processing is inconnection with any activity related to offering of goods or services to data
principals77 within India78. Personal data which is processed by an individual
for any personal or domestic purpose or made publicly available is excluded
from its ambit.79 The DPDP Act places importance on the right of individuals
to protect their personal data as well as the requirement of processing of suchdata for lawful purposes.80
3.12. The rapid growth of, and value of ‘data’ in, digital markets has brought thefields of data protection and competition law closer.81 Large digital enterprises
are characterised by their access to vast stores of user data which are used to
improve products and services. This creates barriers to the entry of new players
in digital markets which do not have access to these enormous repositories ofdata, thus reducing contestability in the market. Further, personal data39

collected by large digital enterprises may be used for profiling of consumers
and may also be sold to advertisers seeking to curate targeted online services
and products, leading to concerns surrounding data privacy.82
3.13. The Committee noted that although data protection under the DPDP Act andcompetition enforcement in digital markets under the Competition Act may
have an ostensible overlap, the objectives sought to be achieved by both statutes
are entirely different. While both statutes ultimately try to maximise the welfare
of data principals and consumers, the manner in which they seek to achieve thesame is distinct. While the DPDP Act is concerned with ensuring that a data
principal’s personal data is protected, the Competition Act seeks to ensure
fairness and contestability in the market. The Committee noted that it isimperative to consider the complementary nature of these legislations and thatthe provisions of the DPDP Act are not in conflict with the goal of promotionof competition.
D.

Draft National Data Governance Framework Policy

3.14. The Ministry of Electronics and Information Technology (“MeitY”) released theDraft NDGFP on 26th May 2022 for public consultation. The policy aims to havestandardised data management and security standards for non-personal andanonymised data across all government bodies. Sharing of any non-personal
data can be done only through platforms authorised by the India DataManagement Office (“IDMO”). The IDMO is empowered to ensure the data
usage rights of data principals;83 ensure ethical and fair use of data sharedbeyond the government ecosystem;84 and specify norms for the disclosure ofdata collected, stored, shared, or accessed over a certain threshold85.
3.15. The Committee noted that the primary focus of the Draft NDGFP is on data
security and informational privacy, and that its relevance in regulating private
entities in digital markets is limited.
E.

Proposed Digital India Act

3.16. The Committee noted that the MeitY has released a presentation on the broad
contours of the proposed DIA – a legislation which is purported to be thesuccessor to the Information Technology Act, 2000.86 The DIA proposes toregulate a vast array of digital enterprises including social media websites,
artificial intelligence-based platforms, and e-commerce enterprises.

40

3.17. The Committee observed that since the draft of the proposed legislation iscurrently unavailable, the exact contours of its applicability cannot bedelineated yet.
F.

The Consumer Protection Act, 2019, the Consumer Protection (ECommerce) Rules, 2020, and the Consumer Protection (Direct Selling)
Rules, 2021

3.18. The Committee observed that the CPA 2019 places strong emphasis onprotection of the interests of consumers and is primarily consumer welfarecentric. The CPA 2019 primarily aims to address unfair trade practices which
are prejudicial to the interests of the public and of consumers.87 While the CPA
2019 may have some points of interface with the extant competition law
framework – such as barring tying and bundling88 or disclosure of a consumer’s
personal information to a third party89 – its capacity to regulate other ACPs bylarge digital enterprises as an ex-ante tool is highly circumscribed.
3.19. The E-Commerce Rules, 2020 apply to all kinds of e-commerce entities andmarketplaces providing a platform for the buying and selling of goods andservices over a digital or electronic network. The Committee deliberated on thescope of the rules and the manner in which they seek to prevent unfair tradepractices across all models of e-commerce. Marketplace entities are required toensure transparency in pricing considerations;90 disclose a description of any
differential treatment being meted out between goods or services or sellers of
the same category;91 and specify the main parameters used to determine theranking of goods or sellers on their platform92. A seller offering goods orservices through a marketplace e-commerce entity is also prohibited fromengaging in any unfair trade practice.93 However, the ambit of the E-Commerce
Rules, 2020 is only restricted to the e-commerce sector and does not extend toother sectors prevalent in the digital space. In addition, the ambit of the ECommerce Rules, 2020 is narrow in that ‘business users’ do not fall under thepurview of ‘consumer’. The applicability of such rules in regulating ACPs
arising in platform-to-business transactions is therefore limited.
3.20. The Direct Selling Rules, 2021 regulate direct selling, i.e. the marketing,
distribution and sale of goods or provision of services through a network ofsellers, other than through a permanent retail location.94 It seeks to curb
pyramid schemes and money circulation schemes95 as well as unfair tradepractices undertaken by direct selling entities96. The rules mandate that direct
selling entities should store sensitive personal data within India and ensure41

adequate safeguards to prevent the misuse of such data. 97 The Committee
noted that the Direct Selling Rules, 2021 were implemented for a specificmandate and that their scope to regulate digital markets is limited.
3.21. While the consumer protection and competition law frameworks in India both
strive to maximise consumer welfare, their manner of achieving the same isdifferent. While the CPA 2019 is designed to protect consumers from unfair or
deceptive practices, the Competition Act is designed to promote the creation offair and contestable markets.
G.

Draft E-Commerce Policy, 201998

3.22. The Draft E-Commerce Policy seeks to build a facilitative regulatoryenvironment for the growth of the e-commerce sector by empowering domestic
entrepreneurs. The Draft E-Commerce Policy primarily addresses issues suchas counterfeiting of products, piracy, prevention of sale of prohibited items,
and strategies for consumer protection. In addition, it attempts to address thepractice followed by some large digital enterprises which allow different
entities to bid on relevant keywords / registered trademarks. This is done byproviding the option to trademark owners to register themselves with ecommerce platforms so that whenever a trademarked product is uploaded forsale on the platform, the platform shall be required to notify the respective
trademark owner. The Draft E-Commerce Policy attempts to safeguard
platform neutrality by mandating transparency and non-discrimination in
publishing of ratings and reviews.
3.23. The Committee, however, observed that the Draft E-Commerce Policy had very
limited coverage and that it failed to address other significant ACPs indulged
in by e-commerce platforms such as exclusive tie-ups, tying and bundling, deep
discounting, etc. In addition, the scope of the Draft E-Commerce Policy islimited to only entities engaged in e-commerce activities and not digitalenterprises operating in other sectors. Further, although the policy imposessome restrictions on the cross-border flow of data generated by users in India
through various sources including social media and search engines, the scopeis largely limited to e-commerce activities. It does not adequately address
sharing of data between online marketplaces and business users. In fact, it
exempts business-to-business data sent to India as part of a commercial contract
between a business entity located outside India and an Indian business entity
from cross-border implications. Large platforms may leverage access to such42

data in order to entrench their position in the market and use such data for
profiling of consumers.
3.24. The Committee further observed that the Draft E-Commerce Policy is yet to be
implemented. In addition, being in the nature of a policy and not a statutory
instrument, its compliance will not be enforceable before a court of law, thus
reducing its efficacy as a measure to regulate digital markets.
H.

Reserve Bank of India Master Directions on Prepaid Payment
Instruments, 2021

3.25. The RBI PPI Master Direction was issued in order to provide a framework for
authorisation, regulation, and supervision of entities issuing and operating
prepaid payment instruments (“PPIs”) and to provide for harmonisation andinteroperability of PPIs. The RBI PPI Master Direction mandates a PPI issuer toprovide the holders of KYC-compliant PPIs with interoperability throughauthorised card networks (for PPIs in the form of cards) and UPI (for PPIs in
the form of wallets).99 Interoperability is mandated on the acceptance(consumer) side as well.100 Though this may address any potential risk of antisteering, the RBI PPI Master Direction does not seem to tackle any other ACP
likely to be engaged in by large digital enterprises. In addition, the Committee
noted that the said instrument has extremely limited coverage since it is only
applicable to PPI issuers and system participants.
I.

‘Guidelines on volume cap for Third Party App Providers (TPAPs) in
UPI’ issued by the National Payments Corporation of India

3.26. The National Payments Corporation of India (“NPCI”) is an umbrellaorganisation created by the Reserve Bank of India (“RBI”) under the aegis of
the Payment and Settlement Systems Act, 2007 for managing retail payments
and settlement systems in India.101 The NPCI was responsible for launching the
UPI – a system which facilitates inter-bank transactions seamlessly through asingle application.102 In view of the rapid growth in UPI transaction volumes
and in order to avert the risk of concentration,103 the NPCI issued the NPCI UPI
Guidelines on 5th November 2020104.
3.27. The NPCI UPI Guidelines mandate payment service providers (“PSP”)105 andthird-party app providers (“TPAPs”)106 to ensure that the total volume oftransactions initiated through a TPAP does not exceed a cap of 30% of theoverall volume of transactions processed in UPI during the preceding threemonths (on a rolling basis)107.
43

3.28. The Committee observed that such volume cap restriction has been imposed inorder to ensure contestability in the UPI ecosystem and encourage new TPAPs
to increase their UPI transaction volume.108 However, it was also noted that the
NPCI UPI Guidelines do not address any ACPs except mergers andacquisitions in the UPI space which may be prone to risk of concentration. The
scope of the guidelines is restricted since they only apply to TPAPs operatingin the UPI ecosystem, and not to other classes of digital enterprises.
3.29. The Committee observed that at present, there is a prevalence of different
instruments which regulate digital enterprises in a piecemeal fashion sincedigital markets permeate across most sectors. Some instruments have not evenbeen notified yet and hence their enforcement efficacy cannot be commented
upon. Further, none of the instruments discussed above are capable ofcomprehensively tackling all challenges emerging from the digital ecosystemfrom a competition perspective, which has led to a regulatory vacuum. This ison account of the fact that most instruments have differing mandates. For
instance, some instruments have been drafted from a consumer-centric
viewpoint while others have been designed to protect the privacy of
individuals whose personal data is collected and used by businesses. Therefore,
while competition law and sector-specific instruments are both important tools
for ensuring market contestability and consumer protection, and while sectorspecific instruments can certainly affect the competitive dynamics of themarket, their means of achieving these objectives are different.
3.30. The Committee has taken note of the various ex-ante sector-specificinstruments that are applicable to digital enterprises in India that operate inparallel with the ex-post regime under the Competition Act. However, theCommittee notes that the primary mandate of such instruments is to ensureorderly growth of the specific sector within which they operate. The
Committee therefore takes the view that while such instruments havesporadic points of interaction with the Indian competition regime, they are
limited in their ability to holistically ensure fair competition in digitalmarkets in an ex-ante manner.

44

CHAPTER III: EMERGING INTERNATIONAL
PRACTICE
1.

BACKGROUND

1.1.

While noting the inadequacy of existing legal instruments in ensuring effective
contestability in the Indian digital economy and rapidly growing role of large
digital enterprises as indispensable access points for businesses as well as
consumers, the Committee also deliberated upon the anti-trust laws prevailingin other jurisdictions.

1.2.

The Committee observed that the Raghavan Committee Report had discussed
the antitrust law prevailing in the European Union (the “EU”), the United
Kingdom (“UK”), Germany, and the United States of America (“USA”). An
overview of the ex-ante framework in the EU, UK and USA was provided in theStanding Committee Report.109 The Committee notes that the ex-ante
instruments for regulation of digital markets have been implemented or
proposed to be implemented in these jurisdictions. The Committee also notedcertain other models in emerging tech economies such as Australia, Japan,
China, and South Korea at the time of stakeholder consultations. The
Committee has noted that while the structure of an ex-ante regulation may beinspired by international best practices, the implementation of ex-antemechanisms must cater to every jurisdiction’s unique social, political, andeconomic needs.110

1.3.

A brief overview of ex-ante instruments across various jurisdictions, viz; the: (i)Digital Markets Act, 2022 (“DMA”); (ii) the Digital Markets, Competition andConsumers Bill, 2023 (“DMCC”); (iii) Amendment to the Act Against Restraintof Competition, 1958 (“ARC”); (iv) Treasury Laws Amendment (News Mediaand Digital Platforms Mandatory Bargaining Code) Act, 2021 (“Bargaining
Code”); (v) Amendments to the South Korean Telecommunications Business
Act, 2011 (“App Store Act”) and Review Guidelines for Regulations Against
Abuse of Dominance and Unfair Trade Practice by Online Platform Businesses(“Review Guidelines”); (vi) Act on Improving Transparency and Fairness ofDigital Platforms, 2020 (“TFDP Act”) and Guidelines on Measures to be Taken
by Specified Digital Platform Providers to Promote Mutual Understanding inTransactional Relationships with User Providers of Goods, etc., 2021 (the “SDP
Guidelines”); (vii) American Innovation and Choice Online Act (“AICO”),
45

Ending Platform Monopolies Act (“EPM”), Open App Markets Act (“OAM”)
and nine other Bills; (viii) Anti-Monopoly Law, 2007 (“AML”) (as amended in2022), Anti-Monopoly Guidelines for the Platform Economy, 2021 (“Platform
Guidelines”), Classification and Grading of Internet Platforms (“Draft
Classification Guidelines”) and Guidelines to Implementing Subject
Responsibility for Internet Platforms (“Draft Responsibility Guidelines”); (ix)
Amendments to the Competition Act, 1985 (“Canadian Competition Act”),
Online Streaming Act, and Online News Act; (x) Fair Trade Act (“FTA”); and(xi) Competition Act, 2004 (“CA-04”) and updated Guidelines studied by theCommittee is captured in the table below:111
Table: Brief overview of relevant ex-ante legislative instruments and policy
reforms particular to digital markets in international jurisdictions
S.
No.

Jurisdiction

1.

EU

Relevant ex-ante legislative
instruments and policy reforms

StatusLegislative instrument
The DMA was introduced through the The DMA came into
Digital Services Act Package in force on 1st November
December 2020.112 It is the most 2022.113
significant
ex-anteinstrument
introduced in the EU to address anticompetitive conduct by large digital
undertakings
designatedas‘Gatekeepers’
providing‘core
platform services’. Both prohibitory
and mandatory ex-ante obligations are
imposed on Gatekeepers.

2.

UK

Legislative instrument
Post the report of the Digital
Competition Expert Panel constitutedby the Government of the UK headedby Professor Jason Furman,114 and thereport of the Competition and Markets
Authority (“CMA”) on its market
study on Online Platforms and Digital46

The Draft DMCC iscurrently at the draft
stage and is awaiting
passage in the UK
Parliament. 117

S.
No.

Jurisdiction

Relevant ex-ante legislative
instruments and policy reforms

StatusAdvertising,115 a need was felt toinstitute a robust ex-ante regime toregulate digital markets in the UK andestablish a Digital Markets Unit within
the CMA, respectively. The Draft
DMCC,116 which was introduced
before the UK Parliament on 25th April
2023, focuses on large undertakings
engaged in digital activities having a
UK nexus. Undertakings fulfillingcertain criteria may receive a ‘Strategic
Market Status’ (“SMS”) in respect of adigital activity from the CMA. The
Draft DMCC imposes obligatory andpreventive conduct requirements on
SMS entities which are ex-ante innature.
3.

Germany

Legislative instrument
The ARC, which follows an ex-post
approachinregulating
anticompetitive conduct of dominant
entities in Germany, has been
amended considerably to allow for exanteintervention.
The
10th
Amendment to the ARC (“10thAmendment”)118 imposes obligations
on undertakings which are active to asignificant extent on multi-sided
markets and networks and which may
be regarded as being of ‘paramountsignificance for competition acrossmarkets’ (“PSCAM”). PSCAM entities
are prohibited from engaging incertain kinds of anti-competitive
conduct. The 11th Amendment to the47

The 10th Amendment
came into force in
2021.
The
11th
Amendment
came
into
force
in
November 2023.

S.
No.

Jurisdiction

Relevant ex-ante legislative
instruments and policy reforms

StatusARC (“11th Amendment”), effectivefrom 7th November 2023, introduces
significant changes: it grants the
Bundeskartellamt or the Federal Cartel
Office (“FCO”) authority to enforce
remedies upon companies post sector
inquiries regardless of the company
infringing competition laws; 119 allows
the FCO to skim off profits made fromcompetition law infringements;120 andfacilitates the implantation of the
DMA in Germany121.
4.

USA

Legislative instruments
Apart from the central antitrust laws in
the US, namely, the Sherman Act, 1890(“Sherman Act”), the Clayton Act,1914 (“Clayton Act”), and the Federal
TradeCommission
Act,
1914
(“FTCA”), twelve Bills have been
proposed specifically for regulatingcompetition in digital markets before
the US Congress, viz.:122 (a) AICO;123(b)
EPM;124(c)
OAM;125(d)Augmenting
Compatibility
andCompetition by Enabling Service
SwitchingBill(ACCESS);(e)
Competition and Antitrust Law
Enforcement
ReformBill;(f)
Competition and Transparency inDigitalAdvertising
Bill;
(g)
Consolidation
Prevention
andCompetition Promotion Bill; (h)Digital Platform Commission Bill; (i)Merger Filing Fee Modernization Bill;(j)
Platform
Competition
and48

All twelve Bills including the AICO,
EPM and OAM - arepending passage.

S.
No.

Jurisdiction

Relevant ex-ante legislative
instruments and policy reforms

StatusOpportunity Bill; (k) Prohibiting
Anticompetitive Mergers Bill; and (l)Trust-Busting for the Twenty-First
Century Bill.
Policy reforms-

The House Judiciary Committee's
Subcommitteeon
Antitrust,Commercial, and Administrative Law(“HJC Subcommittee”) conducted aninvestigation in 2019 which assessed
the market strength of large platforms
and the effectiveness of extant
competition law in regulating anticompetitive practices in digitalmarkets.126 An ‘Executive Order on
Promoting Competition in theAmerican Economy’ was issued by theWhite House on 9th July 2021 (“WhiteHouse Executive Order”); the orderinter alia established the White House
Competition Council within the
President’s Executive Office.127
5.

Japan

Legislative instrument
The TFDP Act is an ex-ante instrument
which was introduced to ensuretransparency and fairness in the
conduct of Specified Digital Platforms
in Japan.128 The Ministry of Economy,
Trade, and Industry (“METI”)
published the SDP Guidelines129 andthe Ordinance No. 1 in 2021 (“Japan
Ministerial Ordinance / JMO”)130
which lay down certain measures to be
49

The TFDP Act cameinto force on 1st
February 2021. The
SDP Guidelines arealso currently inforce.

S.
No.

Jurisdiction

Relevant ex-ante legislative
instruments and policy reforms

Statuscomplied with by Specified Digital
Platform providers. METI’s cabinet
orders have specified four separatebusiness classifications, along withthresholds for designation as Specified
Digital Platforms.131
6.

Australia

Legislative instrument
Ex-post competition enforcement in The Bargaining CodeAustralia is undertaken under the came into force on 3rdCompetition and Consumer Act, 2010 March 2021.134(“CCA”).132 The Bargaining Code has
amended the CCA and imposed exante standards on Designated /Responsible
DigitalPlatform
Corporations carrying content by
Australian news media businesses, inrespect of Designated Digital Platform
Services provided by them.133 The
Bargaining Code seeks to address thedisparity between Australian news
businesses and Designated Digital
Platform Corporations who benefit
from a significant bargaining power
imbalance.
Policy Reforms
The Australian Government directed
the Australian Competition andConsumer Commission (“ACCC”) in2020 to conduct the Digital Platform
Services Inquiry (“DPSI”) into theconcentration of power and market
trends in the supply of digital platform
services. Interim reports under the
50

S.
No.

Jurisdiction

Relevant ex-ante legislative
instruments and policy reforms

StatusDPSI are to be submitted by the ACCC
every six months until the conclusionof the DPSI in 2025. The fifth interim
report under the DPSI (“5th DPSI
Report”) proposes, inter alia, servicespecific codes of conduct for
Designated Digital Platforms with exante obligations and measures.135 The
ACCC has issued seven interim
reports under the DPSI up till now.136
7.

8.

China

South
Korea

Legislative instruments
China’s main antitrust enforcement
legislation – the AML137 – follows an
ex-post approach and was amended in
2022 to address anti-competitive
practices arising in digital markets.
The Platform Guidelines specificallyfocus on China’s platform economy
and aim to curb anti-monopolistic
practices.138

The amendment to
the AML is in force.
The
Platform
Guidelines came into
force on 7th February2021.

In addition, ex-ante measures havebeen sought to be introduced throughthe Draft Classification Guidelines139
and Draft Responsibility Guidelines140.
The former provides for different
categories of markets along with thethresholds for classification of internet
platforms and the latter provides forobligations by platform entities.

The
Draft
Classification
Guidelines and Draft
Responsibility
Guidelines are still at
the stage of public
consultation.

Legislative instruments
The Monopoly Regulation and Fair The App-Store Act
Trade Act, 1980 (“MRFTA”)141 is the came into force on 31st
51

S.
No.

Jurisdiction

Relevant ex-ante legislative
instruments and policy reforms

Statusmain antitrust enforcement legislation
in South Korea and is enforced by the
Korean Fair Trade Commission(“KFTC”). The App-Store Act142 andthe Review Guidelines143 are otherlegislative instruments pertaining todigital markets. The App-Store Act
prohibits dominant app market
business operators from abusing their
dominant position. The Review
Guidelines supplement the existing
Guidelines on Review of the Abuse ofMarket Dominant Position, 2009 under
the MRFTA and examine whether thebusiness activities of online platform
operators violate Article 5 of the
MRFTA (prohibition of abuse of market
dominance). South Korea has not
introduced new ex-ante regulations;instead, it aims to bolster ex-post
regulatory measures by providing fora platform’s responsibilities.

August 2021. The
Review
Guidelines
came into force on
12th January 2023.

Other miscellaneous initiatives
The KFTC has proposed amendments
to the Consumer Protection inElectronic Commerce Act to reclassify
online businesses and address issues
arising in the e-commerce sector.144
Further, the KFTC and Korea
Communications
Commission(“KCC”) have proposed separate bills,
i.e. the Fair Intermediate Transactions
on Online Platforms Bill and theOnline Platform User Protection Billaiming to curb unfair trade practices
52

The
proposed
amendment and bills
are still in a draft
stage.

S.
No.

Jurisdiction

Relevant ex-ante legislative
instruments and policy reforms

Statusby online platform operators andprotect the rights of online platform
users,
respectively.145
Apangovernmental joint body known as the‘Government Committee of Digital
Platforms’ has been established todevelop South Korea’s new digitalplatform self-regulation policy.146
9.

CanadaLegislative instruments
The Canadian Competition Act147 is
the primary antitrust legislation in
Canada and is enforced by theCompetition Bureau of Canada(“Canada
Bureau”).
Certain
amendments
totheCanadianCompetition Act received Royal
Assent on 23rd June 2022.148 The said
amendments include, inter alia,
increasing the upper limit of fines andpenalties
forindividuals
andcorporations engaging in abuse of
dominance and deceptive marketing
practices;andclarifyingthat
incomplete price disclosure constitutes
deceptive marketing.149
The Online Streaming Act aims tosubject all audio and audio-visualcontent transmitted and received
through the internet to regulation by
the Canadian Radio-television andTelecommunications
Commission(“CRTC”). The Canadian Government
has issued proposed policy directions

53

The Online Streaming
Act received Royal
Assent on 27th April
2023.152

S.
No.

Jurisdiction

Relevant ex-ante legislative
instruments and policy reforms

Statusto the CRTC, which will be responsiblefor implementation.150
The Online News Act seeks to regulate
online platforms in order to promotefairness in the Canadian digital media
news market.151

Policy reforms

The Online News Act
received
Royal
Assent on 22nd June
2023.153 Obligations
under the same cameinto
effectinDecember
2023.154
Final
regulations
under the same havebeen published.
-

The Canada Bureau published its
Strategic Vision for 2020–2024 in
February 2020 which highlighted its
focus on digital markets in the coming
years.155 The Digital Enforcement andIntelligence Branch (CANARI) has
been established to supplement the
Canada Bureau’s ability to protect andpromote competition in Canadian
digital markets.156
In June 2021, the Competition and
Growth Summit emphasised the needfor a thorough review of the CanadianCompetition Act to ensure its
effectiveness in addressing challenges
posed by the dominance of large
digital platforms.157 Senator Howard
Wetston initiated a consultation in
October 2021158 and following this, areport titled ‘Examining the Canadian
54

S.
No.

Jurisdiction

Relevant ex-ante legislative
instruments and policy reforms

StatusCompetition Act in the Digital Era’159
to review the provisions of theCanadian Competition Act wascommissioned. Subsequently, theCanadaBureausubmittedacomprehensive
setof
recommendations to revamp the
CanadianCompetitionActinFebruary 2022160. The CanadianCompetition Act was amended in June
2022 (discussed above). The Canada
Bureau has also submitted its inputs161
on a discussion paper titled ‘The
Future of Competition Policy in
Canada’162 issued by the CanadianGovernment on the future ofcompetition policy in Canada.
10.

TaiwanLegislative instruments
The
primary
competition
law The FTA is currently
legislation in Taiwan is the FTA163 in force.
which is enforced by the Fair Trade
Commission (“TFTC”). The FTA aims
toregulatemonopolies,
anticompetitive
mergers,
concertedpractices, and vertical restraints.
Policy reforms-

The TFTC created a ‘Digital Economy
Competition Policy Task Force’ inMarch 2021 which conducted an
extensive study on antitrust issues
relating to the digital economy andreleased its White Paper on
Competition Policy in the Digital
55

S.
No.

Jurisdiction

Relevant ex-ante legislative
instruments and policy reforms

StatusEconomy in December 2022.164 The
said White Paper also examined thecurrent enforcement position andpolicy direction in Taiwan andhighlighted several anti-competitive
practices prevalent in digital markets.
The White Paper further stated that theincurrence of lower social costs should
determine whether ex-ante or ex-post
approach in regulation of digitalmarkets should be adopted.
11.

Singapore

Legislative instruments
The primary competition law inSingapore is the CA-04165 which bans
any conduct that amounts to an abuseof a dominant position by one or more
undertakings in any market in
Singapore. On the basis of market
studies, international best practices,and the Competition and Consumer
Commission of Singapore’s (“CCCS”)
own enforcement practice, theGuidelines to the CA-04 have beenrevised.166 The updated Guidelines
clarify, inter alia, measures forassessmentofmarketpower;
potentially abusive conduct in digitalmarkets; market definition; as well asprocedures related to mergers.167
Policy reforms

The CA-04 is in force.
The
revisedGuidelines to the CA04 came into force on
1st February 2022.

-

The Committee on the Future
Economy released a report in February
2017 to outline essential strategies to
56

S.
No.

Jurisdiction

Relevant ex-ante legislative
instruments and policy reforms

Statuscombat challenges arising in an ‘era of
rapid technological change’.168 The
CCCS conducted market studies on
Singapore’s online travel booking
sector in 2019169 and e-commerce
platforms in 2020170 in order to identify
potential anti-competitive practices insuch sectors. The CCCS alsocollaborated with the Personal Data
Protection Commission to release a
discussion paper on data portability in
2019.171

1.4.

The Committee noted the apparent consensus across jurisdictions to use ex-antelaws to regulate large digital enterprises. In order to examine the feasibility ofa similar model for India, the Committee studied the ex-ante instruments insome of the above jurisdictions in detail.

2.

EUROPEAN UNION

2.1.

In recent years, the EU has proactively monitored and introduced various
legislative measures to address anti-competitive behaviour by large digitalenterprises. In addition to stringent enforcement under the ex-post competition
framework under the Treaty on the Functioning of the European Union, 2012(“TFEU”), the EU has also introduced numerous ex-ante measures to strengthen
regulation in digital markets.

2.2.

Key ex-ante measures that have a bearing on competition in digital markets
include the General Data Protection Regulation, 2016 (“GDPR”), theRegulation on Platform-to-Business Relations, 2019 (“EU P2B Regulation”),
and most notably, the DMA172 introduced through the Digital Services Act
Package173.

2.3.

The GDPR is the primary data protection law in the EU and imposes
obligations in relation to notice and consent and transparency obligations upon
data controllers.174 The EU P2B Regulation is applicable towards online
57

intermediation services that facilitate transactions between businesses andconsumers.175 The Regulation specifically focuses on the interplay between
business-users and online intermediation services, and imposes obligations onthem to deal with business-users in a fair and transparent manner. The DMA
is a new ex-ante competition legislation introduced in 2022 to categoricallyregulate large digital enterprises that act as ‘Gatekeepers’ in the EU’s digitalmarkets.
2.4.

The key ex-post competition decisions adopted by the European Commission(“EC”) in relation to large digital enterprises under the TFEU, along with thelimitations of such an ex-post regime, were examined by the Committee. The exante competition measures introduced through the DMA were also looked at.
a.

Ex-post enforcement under the Treaty on the Functioning of theEuropean Union, 2012

2.5.

The TFEU is part of the EU’s foundational documents, setting out core
principles on the EU’s functioning as a union of nation states.176 Article 101 of
the TFEU prohibits certain concerted practices that restrict competition, andArticle 102 prohibits abuse of dominant position by an undertaking. Over thelast five years, the EC has ramped up its enforcement under these provisions
to penalise large technology companies in relation to their anti-competitive
conduct that has the potential to affect the EU’s internal market.

2.6.

For instance, in 2017, Google was fined EUR 2.42 billion for abusing its
dominance in the search engine market by unfairly prioritising the placementof its ‘Google Shopping’ service.177 Google Android was fined EUR 4.34 billion
in 2018 in relation to the unfair restrictions it imposed upon Android device
manufacturers and mobile network operators.178 In 2019, AdSense, Google’s
search advertisement service, was fined EUR 1.49 billion for imposing
restrictive clauses in contracts with third-party websites. The EC noted that
Google’s dominance in the online search advertising market may be traced
back to 2006.179

2.7.

In 2022, the EC accepted voluntary commitments from Amazon after it charged
Amazon for (a) its use of non-public data generated by marketplace sellers on
Amazon Marketplace, (b) preferential treatment offered by Amazon to prefer
its own retail businesses for its Buy Box program, and (c) its preferential
treatment for sellers who use Amazon’s logistics and delivery services. 180 The

58

EC has also commenced proceedings against Facebook Marketplace in 2022
regarding its conduct in the online classified advertisement services sector.181
2.8.

However, owing to protracted investigations and the propensity of digitalmarkets to irreversibly tip in favour of large incumbents, the EU has sought toimplement an ex-ante competition regime through the DMA.
b.

2.9.

Ex-ante enforcement under the Digital Markets Act, 2022

Following an extensive public consultation process, the DMA was finallyadopted in 2022 whose enforcement is entrusted with the EC. Within the EC,
the enforcement of the DMA will be shared between the EC’s departments forcompetition (“DG COMP”) and tech policy (“DG CONNECT”).182 The DMA
seeks to identify and selectively regulate the behaviour of large digital
undertakings in an ex-ante manner. The DMA entered into force on 1 November
2022 with a six-month built-in buffer period before it became applicable (i.e. by
May 2023).183
I.

SCOPE AND APPLICABILITY

2.10. The DMA applies to only large undertakings that are designated as‘Gatekeepers’. In order for an entity to be eligible for a Gatekeeper designation,
it must provide at least one of the ten ‘core platform services’ enumerated
under the DMA, which include online intermediation services, online searchengines, video-sharing platform services, virtual assistants, online social
networking services, and web-browsers.184 Newer services within the digital
sector may be added to this list pursuant to a market investigation by the EC.185
II. DESIGNATION AND THRESHOLDS
2.11. The DMA envisages two ways to designate an undertaking as a ‘Gatekeeper’:either when an undertaking triggers the thresholds detailed below,186 or
through the exercise of the EC’s residuary powers187. The DMA requires a
combined reading of its qualitative and its quantitative thresholds fordesignating a Gatekeeper.
a.

Qualitative thresholds

2.12. For an entity to be designated as a Gatekeeper, the DMA prescribes three
qualitative thresholds, namely that an entity:
59

i.
ii.
iii.

has a significant impact on the internal EU market,
provides a core platform service which is an important gateway forbusiness users to reach end users, andenjoys an entrenched and durable position in its operations, or it isforeseeable that it will enjoy such a position in the near future.188

2.13. In the interest of specificity, the DMA lays down that the above qualitative
thresholds are presumed to be satisfied if the quantitative thresholds detailed
below are met.
b. Quantitative thresholds
i. An entity can be presumed to have a ‘significant impact’ if it provides thesame core platform service in at least three member states and has triggereda monetary threshold of either (a) annual EU turnover being at least EUR
7.5 billion in each of the last three financial years, or (b) its average market
capitalisation or fair market value amounting to at least EUR 75 billion in
the last financial year.189
ii. An entity’s service can be presumed to be an ‘important gateway between
business users and end users’ if in the last financial year, it has at least 45
million monthly active end users and 10,000 yearly active business users in
the EU.190 The Committee notes that the DMA’s threshold for active endusers has been calculated as 10% of EU’s population, parallel to its
calculation for the Digital Services Act, 2022.191
iii. Finally, an entity is presumed to have an ‘entrenched and durable position’
if it meets the end user and business user thresholds above for each of thelast three financial years.192
2.14. The DMA also prohibits Gatekeepers from circumventing the quantitative
thresholds by segmenting, dividing, fragmenting, or splitting its core platform
services.193
III. DESIGNATION PROCESS AND REVIEW
2.15. The DMA puts the onus on the undertakings providing core platform services
to notify the EC when it triggers any of the quantitative thresholds envisaged,
within a period of two months.194 However, such an undertaking may, at thetime of notification, present sufficiently substantiated arguments as to why itshould not be designated as a Gatekeeper.195

60

2.16. Within forty-five working days after notification by an undertaking (i.e. bySeptember 2023), the EC shall communicate its decision on the Gatekeeper
designation.196 In the designation decision, the EC must list the relevant coreplatform services that an undertaking provides and which act as an importantgateway for business users to reach end users.197
2.17. Once designated, the EC is required to review the designation decision every
three years.198 Within the three-year period, the EC may also review its decision
either upon request or on its own initiative on two grounds: first, a substantialchange in any facts based on which the designation was awarded; or second,the designation decision was based on incomplete, incorrect, or misleading
information.199
IV. EX-ANTE OBLIGATIONS
2.18. The DMA prescribes various ex-ante obligations on Gatekeepers, bothprohibitory and mandatory, in relation to the core platform services listed in
the designation decision. These obligations are set out under Articles 5, 6 and 7of the DMA. Key obligations include the following:a. Prohibited conduct
2.19. The DMA prohibits Gatekeepers from tying and bundling200 their core platform
services, and imposing restrictions on switching201 or changing default preinstalled services202. Gatekeepers are also prohibited from imposing platform
parity clauses,203 and from engaging in self-preferencing204. In terms of data
related obligations, Gatekeepers are prohibited from processing or cross-using
data obtained through its core platform unless the notice and consent
requirements under the GDPR are met.205 Similarly, the DMA restricts
Gatekeepers from using any non-publicly available data generated by orprovided by business users while using the Gatekeeper’s core platform
service.206
b. Mandated conduct
2.20. The DMA requires Gatekeepers to enable interoperability of third-party software
applications with its operating system.207 Further, Gatekeepers must provide,free of charge, effective interoperability to third-party hardware and software
service providers for the purposes of using the Gatekeeper’s designated coreplatform service. Such effective interoperability requires Gatekeepers to ensure
61

similarity between the manners in which the third parties’ and the Gatekeeper’s
hardware and software features interact with the Gatekeeper’s OS or virtualassistant service.208 In the context of self-preferencing, Gatekeepers aremandated to apply transparent, fair and non-discriminatory conditions to ranking,indexing, and crawling, in relation to their dealings with third-parties.209 The
DMA also imposes positive obligations regarding uninstalling default services.
The Gatekeeper must offer choice screens on defaults and enable end users toeasily uninstall default software applications in the Gatekeeper’s operating system,
unless installing such default services is essential for the functioning of the OSor the device.210
2.21. Gatekeepers must provide end users with technical means, free of charge, toensure effective portability of their data generated in their activity in relation to
the core platform service.211 Additionally, Gatekeepers must also provide
business users with free of charge, continuous, real-time, and high-quality
access to all data generated by business users using a core platform service.212 The
DMA also sets out specific obligations to reduce data concentration advantages
in the online search engine markets: Gatekeepers’ search engines must provide
third-party online search engines with anonymised access to ranking, query, click
and view data generated by end users on fair, reasonable, and nondiscriminatory terms.213
c. Obligations on number-independent interpersonal communication services
2.22. Article 7 of the DMA lists specific obligations in relation to the provision of
number-independent interpersonal communication services (“NIICS”). Theseobligations include making the basic functionalities of its NIICS interoperablewith an EU third-party provider’s NIICS, by providing the necessary technicalinterface free of charge.214 The DMA also prescribes a staggered timeline formaking various types of NIICS interoperable.215
V. SUSPENSION AND EXEMPTIONS
2.23. The DMA lays down specific grounds for suspending or exempting a
Gatekeeper from obligations under the DMA. Gatekeepers may demonstrate
through a reasoned request to the EC to suspend compliance in relation to a
specific obligation if it endangers the Gatekeeper’s economic viability due to
exceptional circumstances beyond the Gatekeeper’s control.216 Additionally,
the EC may, on request or suo motu, exempt a Gatekeeper in relation to one ormore obligations only on the grounds of public health or public security.217
62

Both suspensions and exemption are limited, and must be reviewed at least ona yearly basis.218
VI. ENFORCEMENT AND MONITORING
a. DMA provisions to aid enforcement
2.24. The DMA empowers the EC to carry out market investigations to assess
whether a Gatekeeper has engaged in systematic non-compliance with its
obligations under the DMA.219 If a Gatekeeper has done so, and has
strengthened or maintained its market position, the EC may impose additional
behavioural or structural remedies proportionate and necessary to ensure
effective compliance with its obligations.220 The EC may also conduct a market
investigation to (a) assess whether one or more services in the digital sector
should be added to the current list of ten core platform services as defined in
the DMA; or (b) detect practices which limit contestability and are not alreadyaddressed by the DMA.221
b. Gatekeeper’s compliance function and EC monitoring powers under theDMA
2.25. Gatekeepers are required to appoint and maintain a compliance function
independent from the operations function of the Gatekeeper.222 The compliancefunction, which is to be headed by an independent senior manager, isenvisaged to report directly to the management body of the Gatekeeper.223 The
Gatekeeper must share the name and contact details of the head senior manager
with the EC. Additionally, the EC is empowered to request for information,224
to carry out interviews,225 and to conduct inspections to collect information,
including explanations on functioning, data-handling, algorithms, andbusiness practices of the Gatekeeper226.
c. Other measures to improve DMA implementation
2.26. In order to effectively implement the DMA, the EC has reportedly planned toincrease the capacity of DG CONNECT to over 100 full-time staff and toestablish a European Centre for Algorithmic Transparency.227 Within DG
CONNECT, a societal issues team (handling risk assessments and audits), a
technical team (handling interoperability of messenger services anddevelopment of technical standards supporting the new rules), and an
economic team (handling DMA-related unfair trade practices such as data63

access) shall be created.228 The EC may also request assistance from nationallevel competition regulators and enforcement agencies in the implementationof the DMA.229
VII. REMEDIES
2.27. The EC may issue a non-compliance decision if it notes that a Gatekeeper has
not complied with its obligations under the DMA.230 Such non-compliance also
includes failure to carry out any measures imposed against the Gatekeeper forsystematic non-compliance or failure to carry out interim measures as orderedby the EC.231 Under a non-compliance decision, the EC may fine the Gatekeeper
up to 10% of its total worldwide turnover in the preceding financial year.232
2.28. The DMA empowers the EC to conduct a market investigation to assess
whether a gatekeeper has taken part in systematic non-compliance.233
According to the DMA, a systematic non-compliance with the obligations
under Articles 5, 6, and 7, occurs when the EC has issued at least three noncompliance decisions against a Gatekeeper regarding any of its core platform
services, within a period of 8 years before the EC’s decision of opening a market
investigation.234 To ensure effective compliance, the EC has the power toimpose any structural or behavioural remedies, that are necessary andproportionate, on the Gatekeeper if it is found to maintain, strengthen, or
extend its gatekeeper position, and systematically infringe one or more of its
obligations under the DMA.235 Such remedy can take the form of a ban, for alimited period of time, on the Gatekeeper from entering into a concentrationin relation to the core platform services or other services in the digital sector orfrom enabling the collection of data that is affected by the systematic noncompliance. 236
2.29. Additionally, the EC may fine the Gatekeeper up to 20% of its total worldwide
turnover in the preceding financial year if there have been repeatedinfringements in the same core platform service that has already been subject
to a non-compliance decision in the previous eight years.237 For minor
contraventions including failing to report, provide access to or share required
information, the EC may fine a Gatekeeper up to 1% of total worldwide
turnover in the preceding financial year.238 Finally, the EC may fine a
Gatekeeper up to 5% of the average worldwide daily turnover in the previous
financial year per day, calculated from the date of the decision, to compel
compliance with decisions and measures, or to allow inspection or access as
required under the DMA.239
64

VIII.

MERGER REVIEW

Competition aspects of large concentrations in the EU that meet certain prespecified thresholds are examined by the EC under the EC Merger Regulation(“ECMR”).240 In addition to compliance under the ECMR, the DMA obligates
Gatekeepers to notify the EC about every intended concentration where thetarget of such a concentration provides digital services. 241 Non-compliancewith such an obligation may result in a fine of up to 1% of the total worldwide
turnover in the preceding financial year.242 The DMA also empowers the EC toprohibit Gatekeepers from entering into future concentrations in cases where
Gatekeepers have engaged in systematic non-compliance.243
3.

UNITED KINGDOM

3.1.

In the UK, the Competition Act, 1998 (“CA-98”)244 is the primary competition
legislation, and its enforcement is entrusted with the CMA245. The CA-98
prohibits one or more undertakings from engaging in conduct that amounts toabuse of dominant position in a market if it may affect trade in the UK.246 The
CA-98, like most of its other global counterparts, primarily follows an ex-post
method of intervention.

3.2.

Owing to the emergence of certain large digital enterprises in digital markets
such as e-commerce, online advertising and social media, the Government of
the UK constituted the Digital Competition Expert Panel, headed by Professor
Jason Furman (the “Furman Committee”).247 The task of the Furman
Committee was to identify potential challenges to fair competition posed by
the digital market and to put forward recommendations for fair and contestable
digital markets.248 The Furman Committee report argued that a new robust exante regime should complement the existing ex-post framework under the CA98.249 Subsequently, the Digital Markets Task Force was set up to implementand design the new pro-competitive regime for digital markets250 and gave its
advice to the UK Government on the same on 8th December 2020251.

3.3.

This was followed by the CMA report on its market study on Online Platforms
and Digital Advertising that reiterated the need for a Digital Markets Unit(“UK DMU”)252 that would have the power to enforce a code of conduct
specifically tailored for regulating the behaviour of platforms with significant
market power253.

65

3.4.

In July 2021, the Department for Digital, Culture, Media and Sport and theDepartment for Business, Energy and Industrial Strategy jointly published aconsultation paper which sought the opinion of various stakeholders regarding
the proposed regime for digital markets.254 After considering the feedback
received, in May 2022, the two Government bodies confirmed the manner inwhich such regime will be designed.255 The DMCC was finally presented before
the Parliament in April 2023.256
A.

Proposed ex-ante measures under the Digital Markets, Competition andConsumers Bill, 2023

I.

SCOPE AND APPLICABILITY

3.5.

The DMCC regulates large undertakings in the digital market that are engaged
in digital activities having a UK nexus.257 Under the DMCC, a digital activity
can be said to have a UK nexus if any of the following conditions are met: (i)the digital activity has a significant number of users residing in the UK; (ii) theundertaking that carries out the digital activity carries on business in the UK in
relation to the digital activity; or (iii) the digital activity or the manner in which
the digital activity is being carried out is likely to have an immediate,
substantial and foreseeable effect on trade in the UK.258

3.6.

The DMCC has kept the definition of digital activity broad while including
within its ambit:259 (a) the provision of a service by means of the internet (forconsideration or otherwise); (b) the provision of one or more pieces of digitalcontent (for consideration or otherwise); or (c) any other activity carried out forthe purposes of the above.
II.

3.7.

DESIGNATION AND THRESHOLDSAs per the DMCC, the CMA is empowered to accord a ‘Strategic Market Status’/ SMS to undertakings in respect of a digital activity carried out by them.260 In
order to be granted the SMS, the DMCC requires undertakings to meet thefollowing criteria:
a. have a UK nexus;261 (discussed above)b. have substantial and entrenched market power;262 andc. have a position of strategic significance.263

66

3.8.

The above is subject to the undertaking first satisfying the ‘turnover’condition.264 The ‘turnover’ condition is met in relation to an undertaking if the
CMA estimates the undertaking (or the group that the undertaking is a part of)to have a global turnover value exceeding GBP 25 billion or a UK turnovervalue exceeding GBP 1 billion.265 The CMA cannot designate an undertaking as
having SMS in respect of a digital activity unless the turnover condition is met
in relation to the undertaking.266

3.9.

To evaluate whether an undertaking has attained substantial and entrenchedmarket power, the CMA must do a forward-looking assessment of theundertaking’s current and potential market power, for at least five years.267 The
assessment will also take into consideration foreseeable or expected effects if
the undertaking was not granted the SMS status in respect of a digital activity,and other developments that may affect the conduct of the undertaking incarrying out the digital activity.268

3.10. An undertaking has a position of strategic significance with regard to a digital
activity if one or more of the following criteria are met:269
a.

the undertaking has attained significant size or scale in respect of the digital
activity;b. the digital activity is used by a significant number of undertakings in thecourse of their business;c. the undertaking’s position in respect of the digital activity allows it toextend its market power to a host of other activities;
d. the undertaking has the position to determine or substantially influence theways in which other undertakings conduct themselves in respect of thedigital activity or otherwise.
3.11. The criteria relating to the UK nexus, substantial and entrenched market
power, and position of strategic significance are qualitative and therefore
require a case-by-case analysis by the CMA.
III.

DESIGNATION PROCESS AND REVIEW

3.12. The DMCC empowers the CMA to conduct an ‘initial SMS investigation’,270 i.e.
an investigation into non-designated entities for the purposes of designation,271
if it has reasonable grounds to believe that an undertaking can be accorded with
SMS in relation to a digital activity272. Upon such designation, the undertaking

67

will be treated as an SMS entity for five subsequent years starting from the day
after the day on which the SMS decision notice is given.273
3.13. The CMA may conduct ‘further SMS investigation’274 regarding thedesignation of an SMS entity with respect to a relevant digital activity at any
time during the five-year period275. After conducting further SMS
investigation, the CMA may revoke276 the designation of the undertaking or
redesignate277 the undertaking with respect to the same278 or connected279 digital
activity. If the CMA decides to revoke the SMS entity’s designation, it may
make transitional, transitory, or saving provisions as necessary in relation to
any ongoing obligations for the SMS entity.280
IV.

EX-ANTE CONDUCT OBLIGATIONS

3.14. The DMCC empowers the CMA to impose one or more ex-ante obligations
upon SMS entities281 that fall within the ‘permitted conduct requirements’282.
These conduct requirements are based on three key objectives: (i) fair dealing,(ii) open choices and (iii) trust and transparency.283 The fair dealing objective
ensures that users or potential users of a digital activity provided by an SMS
entity are fairly treated and are able to interact with the SMS entity on
reasonable terms.284 The open choices objective requires users or potential users
of a digital activity to be able to freely choose between the services or digitalcontent provided by the SMS entity and that of any other undertakings.285
Finally, the trust and transparency objective aims to help users or potential users
understand the services or digital content, including the terms of access,provided by the SMS entity.286 It also ensures that such users can makeinformed decisions about how they interact with the SMS entity in respect of
the relevant digital activity.287
3.15. Permitted conduct requirements are of two kinds - those requirements thatoblige SMS entities to follow certain conducts (obligatory conduct
requirements), and those that prevent them from engaging in certain kinds ofconduct (preventive conduct requirements).288
a. Obligatory conduct requirements289
3.16. These categories of conduct requirements direct an SMS entity to engage in fairtrade with reasonable terms,290 to have effective procedures for addressing
complaints by and disputes with users or potential users,291 and to offer clear,68accurate and easily accessible information regarding the relevant digital
activity to its users or potential users292.
3.17. This set of conduct requirements also mandates the SMS entities to provide
explanations and a reasonable notice period to its users or potential users
before implementing any change to the relevant digital activity, especiallythose changes that are expected to have a material impact on them.293
Moreover, as a part of such conduct requirements, it is essential to present users
with options or default settings with regard to the digital activity in a mannerthat permits users to make informed and effective decisions about those
options or settings.294
b. Preventive conduct requirements295
3.18. Such requirements aim to prevent SMS entities from applying discriminatory
terms, conditions, or policies against certain users or potential users, or specificuser categories,296 and from leveraging their position in relation to the relevant
digital activity to provide preferential treatment to their own products overthose of other undertakings297. It also prohibits SMS entities from engaging in
additional activities alongside the relevant digital activity in a manner thatenhances its market power materially or reinforces the strategic significance ofits position in relation to the relevant digital activity.298
3.19. The DMCC also bans the SMS entities from engaging in anti-competitive tying
and bundling practices by mandating or incentivising users or potential users
of one of its products to utilise one or more of its other products in conjunction
with services or digital content provided within the relevant digital activity.299
The set of preventive conduct requirements also aims to prevent SMS entities
from limiting interoperability between relevant service or digital content andproducts of other undertakings,300 unfairly using data,301 and from restricting
the manner in which users or potential users utilise the relevant digital
activity302 and the ability to use the products of other undertakings303.
V.

EXEMPTIONS

3.20. Under the DMCC, an SMS entity may make representations to the CMA underthe ‘countervailing benefits exemption’ in order to justify non-compliance withany of the imposed obligations.304

693.21. The countervailing benefits exemption is applicable only when the conduct inquestion benefits users or potential users of the digital activity and the benefits
arising out of a breach of the conduct requirement outweigh any actual or likely
detrimental impact on competition.305 Additionally, such an exemption is only
valid when it is proven that the conduct in question is indispensable andproportionate to the realisation of the benefits, and that effective competition is
not eliminated or prevented due to the conduct in question.306
VI.

ENFORCEMENT AND MONITORING

3.22. The CMA is empowered to initiate a conduct investigation if it has reasonablegrounds to suspect that an SMS entity has breached a conduct requirement.307
Before it begins its investigation, the CMA has to notify the SMS entity
suspected of having breached a conduct requirement.308 The DMCC also casts
a duty upon SMS entities to report certain mergers that meet the criteria laid
down in Section 57 of the DMCC,309 and mandates such entities to maintaincompliance reports in relation to the conduct requirements imposed uponthem310.
3.23. In addition to the above, the DMCC goes several steps above conduct
requirements, and provides broad-ranging powers to the CMA to carry out
Pro-Competition Interventions (“PCIs”).311 PCIs may be carried out by the
CMA where it believes that a factor or a combination of factors relating to adigital activity carried out by an SMS entity may have an adverse effect oncompetition and the PCI would help in remedying, mitigating or preventing
the adverse effect on competition.312 The DMCC also empowers the CMA toaccept an appropriate commitment from an SMS entity in relation to its conduct
in respect of an adverse effect on competition or detrimental effect on UK usersthat the CMA considers has resulted, or is likely to result, from an adverse effecton competition.313
VII. REMEDIES
3.24. Failure to comply with the competition requirements314 or with investigativerequirements315 can attract penalties which may be a: (i) fixed amount; (ii)amount calculated by reference to a daily rate; or (iii) a combination of theabove316. In case of failure to comply with competition requirements, themaximum amounts of a penalty that may be imposed are: (i) in the case of a
fixed amount, 10% of the total turnover inside and outside the UK317 of the SMS
entity or group that the SMS entity is part of;318 (ii) in the case of an amount70

calculated by reference to a daily rate, 5% of the daily turnover inside andoutside the UK319 of the SMS entity or group that the SMS entity is part of;320 or(iii) in case of a combination of the above, the same rates as discussed above321.
In case the CMA considers that an SMS entity has failed to comply with its
conduct requirements without any reasonable excuse, the amount of penalty
imposed must be fixed.322
3.25. In case of failure to comply with investigative requirements, i.e. failure to
submit information to the CMA or give information which is false or
misleading in a material particular,323 both undertakings and individuals324 canbe penalised325. The maximum penalty that may be imposed on anundertaking is: (i) in the case of a fixed amount, 1% of the total value of its
turnover (both inside and outside the United Kingdom);326 (ii) in the case of anamount calculated by reference to a daily rate, 5% of the total value of its daily
turnover (both inside and outside the United Kingdom) for each day;327 and(iii) in case of a combination of the above, the same rates as discussed
above328. The maximum penalty that may be imposed on an individual is: (i) in
the case of a fixed amount, GBP 30,000;329 and (ii) in the case of an amountcalculated by reference to a daily rate, GBP 15,000 per day330. Apart from this,the DMCC also provides for director disqualification.331
3.26. The DMCC authorises the CMA to implement a PCI on an SMS entity if, after
conducting a PCI investigation, it determines that a factor or a combination offactors related to a relevant digital activity is adversely impacting competition,and implementing the PCI is likely to rectify, lessen, or prevent the adverse
effect on competition.332 A PCI can comprise either or both of the following: (a)a ‘pro-competition order’, which imposes specific requirements on the SMS
entity concerning its conduct related to the relevant digital activity orotherwise; or (b) recommendations issued by the CMA to any person exercisingcertain public functions, advising on the necessary actions that the entity
should take concerning the SMS entity, or the digital activity, or otherwise.333
A pro-competition order may include provisions that impose requirements on
an SMS entity on a trial basis, to assist the CMA in determining effective
measures to rectify, alleviate, or prevent the adverse effect on competition towhich the order relates.334 A PCI order may take the form of requirements foran undertaking to treat different users or customers differently, with suchprovisions being based on user or customer descriptions, absolute user orcustomer numbers, or proportions of the undertaking's total user or customer
count.335

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4.

GERMANY

4.1.

In Germany, anti-competitive practices by dominant entities are examined
under the ARC (German Competition Act, GWB)336 whose enforcement iscarried out by the Bundeskartellamt or the FCO.337 While the ARC primarily
followed an ex-post review of dominance under Section 18, the ARC has been
amended extensively over the last few years to strengthen enforcement indigital markets, which includes amendments to empower the FCO to intervene
ex-ante.
A.

4.2.

The ARC prohibits singular or collective abuse of dominance by an undertaking
or a group of undertakings.338 In addition to abuse of dominance, the ARC also
prohibits the abuse of relative or superior market power to accord protection tosmall market players.339 An undertaking is considered to possess relative or
superior market power when other market participants rely on it as a supplieror consumer without sufficient alternatives.340 Specifically, in case of multisided markets, intermediaries possess relative market power when other
undertakings are immensely dependent on their services for gaining access to
supply and sales markets to the point where there is no reasonable alternativefor other undertakings to switch to.341
B.

4.3.

Amendments to the Act Against Restraint of Competition, 1958 tostrengthen enforcement in digital markets

The series of amendments to ARC significantly expand on the scope of
dominance and relative market power, and also introduce a new threshold for
ex-ante intervention. The amendments to the ARC have been made based onevidence and expertise gathered by the FCO through its papers, market studies,and decision practice in digital markets.342 The key features of theseamendments have been outlined below.
I.

4.4.

Abuse of dominance and relative market power under the Act Against
Restraint of Competition, 1958

THE 9TH AMENDMENT

Adopted in 2017, the 9th amendment to the ARC (“9th Amendment”) brought
about several changes with respect to digital markets.343 It now recognised
markets providing free online services.344 The 9th Amendment also introduced
new criteria for the assessment of market position of undertakings in case of72

multi-sided markets and networks. These criteria consist of factors such asaccess to competitively sensitive data, competition driven by innovation, direct
and indirect network effects and economies of scale arising in connection with
network effects, simultaneous usage of multiple services, and switching costs
for users.345
II.
4.5.

4.6.

The 10th amendment to the ARC came into force in 2021346 based onrecommendations by the ‘Competition Law 4.0’ Commission, established by
the German Federal Ministry for Economic Affairs and Energy 347. The mostimportant change brought about by the 10th Amendment is the ex-ante
regulatory framework introduced under Section 19a focusing on large digitalcompanies.348 Apart from this, the 10th Amendment also introduces measures
to protect entities that engage with those digital companies that have ‘relative
market power’ but are not necessarily dominant. Previously, such protection
was limited to small and medium-sized enterprises only.349 Additionally, the10th Amendment authorises the FCO to grant adequate compensation todependent companies in exchange for providing access to data.350
C.

Ex-ante competition framework under the 10th Amendment

I.

SCOPE AND APPLICATIONAs discussed above, the ex-ante regulatory framework introduced under
Section 19a is aimed at undertakings that are active to a significant extent on
multi-sided markets and networks. The 10th Amendment regards theseundertakings as ‘undertakings of paramount significance for competition
across markets’ (“PSCAM”).351
II.

4.7.

THE 10TH AMENDMENTDESIGNATION PROCESS, THRESHOLDS AND REVIEW

While assessing the PSCAM status of an undertaking, several factors are to betaken into account. These include the undertaking’s dominant position in one
or more markets, its access to competitively sensitive data, its financial strengthor access to other resources, its vertical integration and activities in related
markets, its role in facilitating third parties' access to supply and sales markets,and its related influence on the business activities of third parties.352

73

4.8.

The FCO provides the PSCAM status through a declaratory decision. 353 Suchdecision remains valid for five years from the date on which the decision
becomes final.354
III.

4.9.

EX-ANTE OBLIGATIONS

The 10th Amendment outlines certain types of conduct which are strictly
prohibited for the PSCAM entities. Specific conducts that are prohibited
include self-preferencing,355 hindering the operations of other businesses
engaged in activities on supply or sales markets where the undertaking's
activities are of relevance for market access,356 anti-competitive tying andbundling,357 and unfair terms and conditions that hinder the entry of othercompetitors (anti-competitive data processing)358. PSCAM entities are also
barred from refusing to comply with interoperability and data portability
requirements or from making these requirements more difficult to follow.359
The FCO also has the power to ban PSCAM entities from impeding otherbusinesses from adequately evaluating the value of a service by withholding or
inadequately disclosing information regarding its scope, quality, andsuccess,360 and requesting unjustified and disproportionate benefits forhandling the offers of another undertaking361.
IV.

EXEMPTIONS

4.10. The ex-ante obligations imposed under Section 19a of the ARC are subject to an
objective justification test. The 10th Amendment clarifies that unless the PSCAM
entity in question objectively justifies its conduct to the FCO, a rebuttablepresumption is established against the PSCAM entity.362 While providing
objective justification, the burden of demonstration and proof shall lie on the
PSCAM entity.363
V.

ENFORCEMENT AND MONITORING

4.11. With the intention to prevent irreparable harm which could potentially arise
due to the anti-competitive practices of the PSCAM entities, the 10th
Amendment has reduced the threshold for the FCO to issue interim orders
before reaching a final decision regarding the permissibility of the conduct. 364
Such interim measures shall not be applicable if the PSCAM entity can provethat the order would result in unfair hardship that cannot be justified byoverriding public interests.365

744.12. The 10th Amendment has also facilitated faster resolution of cases by allowing
appeals against FCO decisions, including all intermediary actions, to be
directly presented to the Federal Court of Justice under Section 19a.366
VI.

REMEDIES

4.13. Intentional or negligent acts that violate an enforceable order under Section
19a(2) amount to an administrative offence367 which may amount to a fine of
up to EUR 1 million368. A fine exceeding such an amount may be levied uponundertakings or an association of undertakings, and such fine shall not exceed
10% of the total turnover of the undertaking or association of undertakings
generated in the business year preceding the FCO’s decision.369
4.14. To put a stop to any violation of prohibited conducts under Section 19a, the
ARC authorises the FCO to mandate the adoption of appropriate behaviouralor structural remedies that are proportional to the identified infringement andnecessary to effectively terminate such an infringement.370 The ARC directs the
FCO to impose structural remedies only when no behavioural remedy canachieve the same level of effectiveness, or if the behavioural remedy would
place a greater burden on the concerned undertakings compared to thestructural remedies.371 As part of the order to terminate the infringement, theFCO may also order for the reimbursement of benefits gained through the
infringement.372
THE 11TH AMENDMENT TO THE ACT AGAINST RESTRAINT OF COMPETITION, 1958
4.15. On 7th November 2023, the 11th Amendment to the ARC came into force. The
11th Amendment introduces three key changes: first, the newly inserted Section
32f empowers the FCO to impose both behavioural and structural remedies,
following a sector inquiry, to address suspected disruptions to competition inthat sector even if the entities concerned are fully compliant with competition
laws;373 second, the FCO has now been empowered to “skim off” financial
advantages (i.e. excess profits) that companies gain as a result of theirinfringements;374 and third, the amendment also empowers the FCO toinvestigate infringements of the DMA in Germany375. The 11th Amendment
also simplifies and therefore facilitates private enforcement of the DMA in
Germany.376
5.

UNITED STATES

75

5.1.

In the US, key applicable laws pertaining to antitrust enforcement are theSherman Act, the Clayton Act, and the FTCA.

5.2.

The Sherman Act prohibits every contract, conspiracy, or combination that
restrains trade or commerce,377 and prohibits monopolisation and any attempt
to monopolise.378 The Clayton Act, on the other hand, prohibits and addresses
any harm that could potentially arise from certain practices that are notspecifically prohibited under the Sherman Act, such as mergers andacquisitions, that may significantly lessen competition or create monopolies.379
The FTCA establishes the Federal Trade Commission (“FTC”).380 The FTC andthe Antitrust Division of the US Department of Justice (“DOJ”) are jointly
responsible for the enforcement of the above laws.381
A.

Key enforcement trends in digital markets

5.3.

The FTC and the DOJ have conducted a series of investigations into allegedanti-competitive practices by online digital platforms.

5.4.

In 2021, the FTC accused Meta of possessing monopoly power382 in the market
for ‘personal social networking services’383. The FTC also asserted that Meta
maintained its dominant position by acquiring Instagram in 2012 andWhatsApp in 2014.384 As far as Google is concerned, the DOJ argued that
Google holds monopoly power in the market for ‘general search services’ citingan alleged market share of 88% and significant entry barriers in the market
including scale.385 In 2021, the Attorney General for the District of Columbia
claimed that Amazon holds monopoly power in online marketplaces based on
an alleged market share of 50%-70%; its ability to impose anti-competitive
restrictions on third-party sellers; and entry barriers like network effects, dataadvantages, and extensive logistics capabilities.386

5.5.

Recognising the growing influence of large digital companies, the HJC
Subcommittee conducted an investigation in 2019 and published its report in
2022.387 The investigation examined the market power388 of platforms likeAmazon, Apple, Facebook, and Google and assessed the effectiveness ofexisting antitrust laws in the digital market. The HJC Subcommittee discoveredthat these platforms controlled crucial distribution channels, enabling them tocontrol market access. The HJC Subcommittee identified various anticompetitive practices such as self-preferencing and predatory pricing
employed by dominant platforms to further entrench their position and76

proposed various recommendations to restore competition in digitalmarkets.389
B.
5.6.

Policy and legislative reforms

The House Judiciary Committee and both Houses of Congress have approved
twelve Bills to enhance the regulation of large digital platforms in digitalmarkets in the United States. Three of the most important Bills are theAmerican Innovation and Choice Online Act, the Ending Platform Monopolies
Act, and the Open App Markets Act.390
I.

THE AMERICAN INNOVATION AND CHOICE ONLINE ACT391

5.7.

The AICO prohibits large digital enterprises designated as ‘Covered
Platforms’392 from carrying out certain ‘discriminatory conducts’393. Suchdiscriminatory conducts include self-preferencing and similar practices thatcreate a conflict of interest,394 anti-competitive tying and bundling,395 misusing
non-public data generated on the platform,396 creating impediments to data
portability,397 and imposing limitations on user control over preinstalledsoftware applications and default settings398.

5.8.

Upon designation, obligations under the AICO shall apply to a Covered
Platform for ten years irrespective of whether ownership of or controllinginterest within the Covered Platform has changed.399 As per the AICO, Covered
Platforms may engage in discriminatory conducts if they are able todemonstrate, with clear and convincing evidence, that the conduct in question(a) does not harm the competitive process; or (b) is necessary to comply withfederal or state law, protect user privacy, or safeguard non-public data; or (c)enhances consumer welfare.400

5.9.

Covered Platform operators401 that violate the AICO may face penalties of up
to 15% of their total US revenue generated in the preceding calendar year or
30% of their US revenue in any affected or targeted line of business during theperiod in which the unlawful conduct takes place, whichever is greater.402 In
case it is determined that a violation of the AICO has arisen due to a conflict ofinterest related to the Covered Platform operator’s ownership or control ofmultiple lines of business, the court may order divestiture of the lines ofbusiness that give rise to such conflict.403 Notably, the AICO also mandates the
FTC to establish a Bureau of Digital Markets specifically for enforcing theAICO.404
77

II.

THE ENDING PLATFORM MONOPOLIES ACT405

5.10. The EPM aims to address the conflicts of interest that arise when ‘Covered
Platforms’406 simultaneously own or control an online platform and otherbusinesses407. The EPM prohibits Covered Platform operators408 from owning,
controlling, or having a beneficial interest in a line of business other than theirown platform under certain conditions409. It bans private labelling and the
granting of preferential treatment to a Covered Platform’s own products,
services, or lines of business on its own platform over those of a competingbusiness.410
5.11. Upon designation,411 obligations under the EPM shall apply to a Covered
Platform for 10 years irrespective of whether ownership of or controllinginterest within the Covered Platform has changed.412 Any party subject to suchdesignation, or a final order from a US district court or the FTC has the right tofile a petition for review with the United States Court of Appeals for the Districtof Columbia Circuit.413
5.12. A violation of the EPM shall also constitute an unfair method of competition
under Section 5 of the FTCA.414 For violations of the EPM within two years ofdesignation of the Covered Platform, any person operating a Covered Platform
or any individual who is an officer, director, partner, or employee of such
person may face penalties of up to 15% of the total average daily US revenue ofthe person in the preceding calendar year or 30% of the total average daily US
revenue of the person in any affected or targeted line of business during theperiod in which the unlawful conduct takes place, whichever is greater.415 The
EPM also allows the FTC to commence a civil action in its own name to recovercivil penalties and other appropriate relief against a Covered Platform operator
in case it has reason to believe that a Covered Platform has violated the EPM.416
III.

THE OPEN APP MARKETS ACT417

5.13. The OAM lays down a set of prohibited conducts to regulate Covered
Companies that own or control an app store which has over 50,000,000 users in
the US.418 Among others, the OAM prohibits Covered Companies frommandating the use of their own in-app payment system for app distribution oraccessibility.419 It also prevents Covered Companies from requiring pricing
terms or sales conditions to be better than those on other app stores as acondition for app store distribution.420 The OAM further prohibits Covered78Companies from taking punitive actions or offering unfavourable terms todevelopers for using different payment systems or app stores.421
Concomitantly, the OAM requires Covered Companies to grant developers
timely access to OS interfaces, development information, andhardware/software features.422
5.14. Per the OAM, conduct requirements will not be violated if an action taken by a
Covered Company is necessary for user privacy, security, digital safety,
prevention of spam or fraud, protection of pre-existing intellectual property
rights, or compliance with federal or state laws.423 The Covered Company will
be required to first establish through evidence that its action is (a) applied on ademonstrably consistent basis to its own apps, its business partners’ apps, orother apps; (b) not intended to exclude or impose unnecessary or
discriminatory terms on third-party apps, in-app payment systems, or app
stores; and (c) narrowly tailored and cannot be achieved through lessdiscriminatory and technically feasible means.424
5.15. The OAM grants developers the right to sue for damages425 or injunctive
relief426 in a U.S. court for any actual or threatened loss or damage caused by aviolation of the OAM.427 The OAM also allows the FTC to file a civil action in
its own name to recover civil penalties and other appropriate relief in case it
has reason to believe that a Covered Company has violated the OAM.428
C.

Other legislations

5.16. Apart from the above Bills, the Committee has noted that nine other legislations
have been proposed by both Houses of Congress, whose features, in brief, areas below:a. Augmenting Compatibility and Competition by Enabling Service Switching Bill
(ACCESS)429 – This Bill imposes obligations on Large Communications
Platform Providers430 to facilitate user data portability and promoteinteroperability with other platforms.
b. The Competition and Antitrust Law Enforcement Reform Act431 - This Bill
proposes changes to antitrust laws regarding mergers and anti-competitive
behaviour. It introduces stricter criteria for allowable mergers, forbidding
those that pose a significant risk of materially lessening competition.
c. The Competition and Transparency in Digital Advertising Act432 – This Bill
intends to promote competition in the sale and purchase of digitaladvertising by, inter alia, prohibiting companies with over USD 20 billion
in digital advertising revenue in the preceding year from owning multiple
79

segments of the digital advertising ecosystem (such as a digital advertisingexchange, sell-side / buy-side brokerage).
d. The Consolidation Prevention and Competition Promotion Act433 – This Bill
advocates for a more rigorous standard for permissible mergers. Similar tothe proposed Competition and Antitrust Enforcement Reform Bill, this Bill
also disallows mergers that pose a significant risk of materially reducing
competition or unfairly lowering prices due to insufficient competition
among buyers or employers.
e. The Digital Platform Commission Act434 - This Bill proposes the establishmentof a commission responsible for ensuring algorithmic fairness and safety
on digital platforms while promoting competition.
f. The Merger Filing Fee Modernization Act435 – This Bill aims to modify premerger filing fees and enhance enforcement resources.
g. The Platform Competition and Opportunity Act436 – This Bill seeks to grant theFTC or the DOJ the authority to block acquisitions made by dominant
platforms if they are direct or potential competitors, or if they expand aplatform's market position.
h. The Prohibiting Anticompetitive Mergers Act437 – This Bill prohibits mergers
valued at USD 5 billion or higher and deals resulting in market shares
exceeding 33% for the acquiring entity. It also establishes procedures to
conduct retrospective reviews and facilitate the dissolution of harmful
deals.
i. The Trust-Busting for the Twenty-First Century Act438 – This Bill introduces arange of modifications to the federal antitrust laws and imposes limitations
on acquisitions that involve certain dominant digital companies.
D.

Miscellaneous policy initiatives

5.17. In July 2021, an Executive Order on Promoting Competition in the American
Economy (“Executive Order”) was issued by the White House.439 The
Executive Order encouraged the DOJ and the FTC to enforce antitrust laws toaddress challenges posed by the rise of dominant digital platforms owing to
the acquisition of nascent competitors.440 The Executive Order also established
the White House Competition Council within the President’s Executive
Office.441 A review of the Merger Guidelines442 was announced by the DOJ andthe FTC in January 2022 and in this line, public input443 on modernising
antitrust enforcement was sought, with a specific focus on technology
companies, potential competitors, market definition in zero-price or negativeprice markets, and indicators of market power in multi-sided markets.

80

6.

AUSTRALIA

6.1.

Australia has typically followed an integrated approach towards competition
enforcement and consumer protection under the CCA.444 The CCA provides an
ex-post framework to curb anti-competitive practices and misuse of market
power. The traditional ex-post enforcement under the CCA has been bolsteredby the introduction of the Bargaining Code445 which came into force on 3rd
March 2021446. Additionally, the ACCC released its report on the Digital
Platforms Inquiry in 2019, which undertook a substantive review of thecompetition effects posed by certain digital enterprises.447 Based on its
recommendations, the ACCC has embarked on the DPSI which is scheduled todeliver biannual reports between 2020 and 2025. The DPSI project aims toidentify practices and trends in the markets for the supply of digital platform
services. Seven interim reports have been released as part of the DPSI projectso far.448

6.2.

The Committee studied the key provisions of the Bargaining Code and the
5th DPSI Report released in November 2022, focusing on the grounds fordesignation, the key obligations, penalties, and exemptions. The Committee
also took note of the 6th DPSI Report released in March 2023 on social media
services in Australia.449 The Committee was apprised of the 7th DPSI Reportthat was released in November 2023 which examines competition andconsumer issues arising from the expanding ecosystems of digital platform
providers in Australia, using smart home devices and consumer cloud storage
solutions as illustrative examples.450
A.

6.3.

Ex-ante framework under the Treasury Laws Amendment (News Mediaand Digital Platforms Mandatory Bargaining Code) Act, 2021

The Bargaining Code imposes ex-ante standards on digital platforms carrying
content by Australian news businesses in order to address power imbalancesin the news media sector. Corporations may be classified as ‘Designated Digital
Platform Corporations’451 and one or more services in relation to a corporation
may be specified as a ‘Designated Digital Platform Service’452. The
determination for both Designated Digital Platform Corporations andDesignated Digital Platform Services is based on two factors: (i) there is asignificant bargaining power imbalance between the corporation and its relatedbodies corporate, and Australian news businesses; and (ii) whether the
corporation and its related bodies corporate have made a significant
contribution to the sustainability of the Australian news industry through81agreements relating to news content of Australian news businesses (including
agreements to remunerate those businesses for their news content).453
6.4.

The Bargaining Code imposes certain data-sharing and fairness obligations on
Responsible Digital Platform Corporations454 insofar as their DesignatedDigital Platform Services are concerned.455 456 Responsible Digital Platform
Corporations must prepare a proposal for the Designated Digital Platform
Service to recognise original covered news content during the distribution ofsuch content, and consult registered news business corporations whiledeveloping such proposal.457 The Bargaining Code also prohibits
differentiation by the Responsible Digital Platform Corporations among any
news business corporations in respect of any digital service it operates orcontrols.458 Penalties for violating the Bargaining Code are set out in the CCA.
Under the CCA, penalties for any violations of ex-ante standards are up to AUD
1,878,000 for body corporates459 and up to AUD 500,000 for persons who are
not body corporates460. A substantial penalty for violating the nondifferentiation standard is provided.461
B.

Proposed ex-ante framework under the 5th Digital Platform Services
Inquiry Report

6.5.

The 5th DPSI Report condenses the key learnings from the previous reports andproposes an ex-ante regulatory model to address the major issues in the digital
sector.462 It notes conducts such as self-preferencing, tying, exclusivity
agreements, impeding switching, denying interoperability, and withholding
access to important hardware, software, and data inputs by digital platforms,
which can hinder competition.463 It suggests a targeted ex-ante approach using
service-specific codes of conduct containing obligations that are madeapplicable to ‘designated digital platforms’. The obligations in these codes ofconduct can be designed based on principles to be included in the primarylegislation.464 Regarding market identification, the 5th DPSI Report
recommends that relevant services must be identified subject to appropriate
public and industry consultation during the development of any new proposed
legislation to apply to digital platforms in Australia.465

6.6.

The 5th DPSI report suggests having a quantitative threshold based on thefinancial strength (looking at both Australian revenue and global revenue) andthe reach of the platform (number of business users and end users) as theprimary criteria for Designated Digital Platforms. It also recommends a
qualitative threshold for when the quantitative thresholds are not suitable or82verifiable based on whether the platform occupies an important intermediary
position in at least one digital platform service, whether the platform has
substantial market power in at least one digital platform service it operates, andwhether the platform operates multiple services.466 467
6.7.

The 5th DPSI Report notes that exemptions to the ex-ante obligations imposedby the service-specific codes of conduct can be given on a case-by-case basis
taking into account likelihood and materiality of unintended consequences ofcompliance with such obligations.468 It recommends imposing significant
penalties under the proposed ex-ante framework equivalent to the largest
penalties under the CCA.469

7.

JAPAN

7.1.

Under the ex-post competition framework, the Act on Prohibition of Private
Monopolization and Maintenance of Fair Trade, 1947470 (the “Japan Antimonopoly Act”) has aimed to curb private monopolies, and unfair methods ofcompetition. The Japan Fair Trade Commission is empowered to conduct
market investigations upon receiving reports of violations471, and derives its
powers from the Japan Anti-monopoly Act.

7.2.

Noting recent developments in digital platforms, Japan has considered taking
cognisance of mitigating potential harms of the digital economy through exante measures. Recognising the rise of user access to digital platforms, the METI
proposed the TFDP Act472 and the SDP Guidelines473.
A.

Act on Improving Transparency and Fairness of Digital Platforms, 2020

7.3.

The TFDP Act, effective since February 1, 2021474, operates as an ex-ante
enforcement law with a limited goal of ensuring transparency and fairness inthe conduct of digital platforms. To effectively implement this, the METI
published the Japan Ministerial Ordinance / JMO,475 that elaborates on thedisclosure obligations of the specified digital platform provider towards user
providers and general users476. The METI also brings out cabinet orders thatare administrative orders to enforce a relevant law, like the Cabinet Order No.
17, for stipulating the business category and thresholds in Article 4(1) of the
TFDP Act.477

7.4.

The TFDP Act defines ‘digital platforms’ as digital platform forums that seek
to continuously display information pertaining to goods, services, or rights by83

a ‘provider’ to a ‘recipient’ via the internet or other such means, for platforms
where there are cross-side network effects and same-side network effects.478
The TFDP Act, however, does not specify a set of digital services it seeks toregulate.
7.5.

Further, the TFDP Act seeks to designate certain digital platforms as ‘Specified
Digital Platforms’.479 They will be designated based on the triggering
thresholds notified for specific types of digital platform services through METI
cabinet orders.480 The thresholds are qualitative in nature, based on the total
amount earned by providing the platform for the sale of goods and services,
number of users, or other indicators.481 The METI’s cabinet orders have set out
four business classifications along with thresholds,482 i.e. (i) e-commerce
platforms,483 (ii) app-store platforms,484 (iii) media-integrated digitalplatforms,485 and (iv) advertising intermediary digital platforms486.

7.6.

Specified Digital Platforms must make certain disclosures to user providers
and general users, like sharing the terms and conditions of access to theirplatform services to both in a clear, plain, and accessible manner.487 Specifically,for user providers, the Specified Digital Platform must disclose details relating
to fees charged by the digital platform provider for providing any goods orservices to the user providers,488 and the criteria used to determine rankings
where the information on the platform is displayed in a ranked manner alongwith disclosure regarding sponsored ranking489.

7.7.

For general users, the Specified Digital Platform must disclose the criteria used
to determine any ranked results, highlight sponsored ranking as well as share
the particulars and conditions relating to any acquisition of user providergenerated data.490 The JMO also imposes additional obligations. For instance,
the specified e-commerce platforms digital platform must disclose thereasoning behind requesting platform parity treatment.491

7.8.

Under the TFDP Act, the specified digital platform provider is exempt fromcertain disclosure obligations if those disclosures would harm the interests ofgeneral users.492 The disclosure obligations of Specified Digital Platforms
towards the user providers are exempted where (i) the user providers haveengaged in repeated violations of the terms of access, (ii) the user providers arelinked with an organised crime group, or (iii) the specified digital platform
provider can show a likelihood of harm to the legitimate interests of either theSpecified Digital Platform, user providers, or general users as a result of suchdisclosures.493
84

7.9.

If a Specified Digital Platform is found violating its obligations, the METI may
issue a recommendation and later an order, to undertake recommended
measures.494 If the Specified Digital Platform fails to comply with the orderissued by METI, it can be penalised by a fine up to JPY 1,000,000.495
B.

Guidelines on Measures to be Taken by Specified Digital Platform
Providers to Promote Mutual Understanding in Transactional
Relationships with User Providers of Goods, etc., 2021

7.10. The SDP Guidelines indicate a set of measures to be undertaken by thedesignated entities to improve fairness, transparency, dispute resolution, andlocal reporting norms.496 The SDP Guidelines expand on the obligations
imposed under the TFDP Act. It sets out obligations on Specified Digital
Platforms in terms of self-preferencing in the advertisement classifications, andcovers the use of user provider-generated data and conflicts of interest toensure fairness.497
7.11. The SDP Guidelines also provide that the Specified Digital Platform may
evolve mechanisms to consult user providers and general users prior tochanges in terms of access, ranking, display etc.498 Furthermore, the METI is
empowered to evaluate the transparency and fairness by the Specified Digital
Platform based on the SDP Guidelines and the reports submitted by theSpecified Digital Platforms.499 The SDP Guidelines further recommend
standardising and publishing decision-making criteria regarding treatment ofuser providers, and evolving business operations that take into accountinstances of conflict of interest and self-preferencing.500
8.

SOUTH KOREA

8.1.

In South Korea, the applicable laws pertaining to antitrust enforcement in thedigital market include the MRFTA,501 the App-Store Act,502 and the Review
Guidelines503.
A.

8.2.

Key policy and legislative reforms in digital markets

The KFTC has made active efforts to restore competition in digital markets
through diverse remedies. For instance, in 2021, Naver Shopping, a dominantsearch engine in South Korea, was found to be abusing its dominant positionin the comparison shopping services market.504 In another instance, the KFTC
also imposed corrective measures on seven platform operators for violating the85

Act on the Consumer Protection in Electronic Commerce.505 Furthermore,
Google was fined USD 177 million for restricting device manufacturers frommodifying Android operating system.506
8.3.

South Korea intends to strengthen its ex-post regulatory measures, and in thiscontext, the following legislations have been adopted.
B.

Review Guidelines for Regulations Against Abuse of Dominance andUnfair Trade Practice by Online Platform Businesses

8.4.

The MRFTA, enforced by KFTC, is the primary source of law governingcompetition matters in South Korea. The Review Guidelines 507 act as asupplement to the existing Guidelines on Review of the Abuse of Market
Dominant Position, 2009508 under the MRFTA to delineate the distinct
characteristics of online platform operators. The Review Guidelines areapplicable when examining whether the business activities of online platform
operators violate Article 5 of the MRFTA which provides for prohibition of
abuse of market dominance.509 The Review Guidelines also apply to cases
where a foreign business operator has an impact on the domestic market
through actions taken abroad. This is regardless of whether the foreignbusiness operator has a business base in South Korea or whether thecounterparty to the transaction is a domestic business operator or consumer.510

8.5.

The Review Guidelines define an ‘online platform operator’ as a person whosebusiness is to provide online platform services.511 ‘Online platform services’ aredefined as services that promote interactions such as transactions andinformation exchange between different groups of users through an online
platform and cover online platform mediation services, viz; 512 online searchengines; online social network services; digital content services such as video;
operating systems; online advertising service; and other services
corresponding to the above that promote interactions such as transactions andinformation exchange between users of different groups513.

8.6.

Further, the Review Guidelines lay down certain key characteristics of online
platforms that include multi-sided markets and cross-network effects,
economies of scale, data usage capabilities and nominally free services.514 They
also provide reviewing criteria for prohibited conduct of online platforms
including multi-homing, self-preferencing practices, and anti-competitive
tying, among others.515

86

C.

Amendments to the South Korean Telecommunications Business Act,
2011 (App-Store Act)

8.7.

The KCC amended the South Korean Telecommunications Business Act, 2011(“Telecommunications Business Act”) in September 2021 to include Article
50(1)(9-11) that bars dominant app market business operators516 from engaging
in certain anti-competitive conducts517. The App-Store Act prohibits certain app
market business entities from engaging in conducts that undermine or is likely
to undermine fair competition or users’ interests in the app market.518 Such
conduct includes compelling a mobile content supplier to use certain means of
payment by unduly leveraging their position in a transaction;519 unfairly
delaying the examination of mobile content; 520 and unfairly removing mobile
content from the app market521.

8.8.

The App-Store Act also stipulates that an app market business operator shallprevent any damage to users and protect their rights, by methods likestipulating matters concerning the settlement of payment and refund formobile contacts etc., in the app’s terms of use.522 Additionally, it empowers the
Ministry of Science and ICT or the KCC to conduct fact-finding surveys on theoperation of app markets for protection of mobile content providers.523

8.9.

Per the App-Store Act, if Article 50(1) is violated, the KCC may impose
measures including disclosure of information on telecommunication services,suspension of prohibited acts, and improvement of business processes, among
others.524 A telecommunications business operator may be penalised, on
commission of a prohibited act, with a surcharge of up to 3% of the sales
prescribed by Presidential Decree.525
D.

Other miscellaneous legislations and policy reforms

8.10. The KFTC has proposed an amendment to the Act on Consumer Protection inElectronic Commerce Act526 to reclassify current business models into platform
operators, platform-using business operators, and independent online mall
operators.527 Additionally, the KFTC has also proposed the Fair Intermediate
Transactions on Online Platforms Act which aims to curb unfair trade practices
by online platform operators.528 Moreover, the KCC has proposed an Online
Platform User Protection Act which focuses on protecting rights of online
platform users and prohibits online platform operators from engaging in anticompetitive practices.529 Apart from this, a pan-governmental body has been87

instituted in South Korea to create a self-regulation policy in respect of digitalplatforms and conduct a study into digital markets.530
9.

CHINA

9.1.

Over the last decade, China has seen the rise of large digital enterprises such as
Alibaba, Tencent, and ByteDance in its digital market.531 Noting thesedevelopments, it has strengthened competition enforcement in the digital
economy, where for instance, despite being home-grown, a fine of USD 2.75
billion was imposed on Alibaba for abusing its dominant position for several
years.532

9.2.

In addition to proactive enforcement under China’s AML,533 the AntiMonopoly Commission of the State Council brought out the Platform
Guidelines on 7th February 2021 which follow a primarily ex-post approach534.
This was followed by the State Administration for Market Regulation, China’s
top antitrust watchdog, publishing the Draft Classification Guidelines 535 andDraft Responsibility Guidelines536 in 2021, aiming to prevent anti-competitive
conduct through ex-ante mechanisms537.
A.

9.3.

The AML, China’s primary competition law, was amended in 2022 to address
monopolistic practices in China’s expanding digital markets.538 It prescribes
factors to determine a dominant entity and sets out thresholds for presuming
dominance.539 To address potential anti-competitive practices, recent
amendments to the AML prohibit undertakings from using data, algorithms orcapital advantages to engage in anti-competitive monopolistic practices orabuses of dominance.540 These prohibitions do not directly engage with theconduct of an undertaking, and instead seek to mitigate negative consequences.
B.

9.4.

Anti-Monopoly Law, 2007 (as amended in 2022)

Anti-Monopoly Guidelines for the Platform Economy, 2021541

The Platform Guidelines aim to prevent monopolistic practices in the platform
economy and promote fair competition.542 They identify factors to define therelevant product market.543 The Platform Guidelines also highlight thatconcerted monopoly agreements achieved by data, algorithms, or othermethods will be considered as anti-competitive.544 They further note the impact
of killer acquisitions on the platform economy, and further scrutinise
concentrations that may restrict competition below the notifiable value.545
88

C.

Proposed ex-ante measures

9.5.

China has proposed to introduce ex-ante obligations through the Draft
Classification Guidelines and Draft Responsibility Guidelines. 546 The Draft
Classification Guidelines provide for different categories of markets along withthe thresholds of internet platforms, graded by scale and impact. The Draft
Responsibility Guidelines principally provide for the obligations of platform
entities.

9.6.

Under the Draft Classification Guidelines, internet platforms have beenclassified based on functions, such as online sales, life service, social
entertainment, information, financial service, and network computing
application platforms.547

9.7.

The thresholds for designation of a super platform are (i) at least 500 million
annual active users in China in the preceding year, (ii) core business involves
at least two types of platform business, (iii) at least RMB 1 trillion market value
at the end of the previous year, and (iv) the platform has strong ability torestrict merchants from contacting the user.548 The thresholds for designationof a large platform are (i) at least 50 million annual active users in China in thepreceding year, (ii) outstanding performance of the main business, (iii) themarket value at the end of the previous year was at least RMB 100 billion, and(iv) a strong ability to restrict merchants from contacting consumers.549

9.8.

The Draft Responsibility Guidelines impose certain key ex-ante obligations on‘super-large internet platforms operators’.550 These include that super-large
internet platform operators are prohibited from using non-public data
generated or provided by operators and users that use the platform without
legitimate reasons,551 and that they must promote interoperability of services
amongst other platform operators552. They are also prohibited from using thetied-in services of a related platform when users on the platform access orregister the platform services they need553 and must abide by the principles offairness and prohibit any self-preferential treatment554.

9.9.

The Draft Responsibility Guidelines provide general obligations applicable toall internet platforms. For instance, internet platform operators must verify andregister relevant information of the operators who apply to enter theplatform.555 They must not engage in anti-monopoly behaviour556 and use
technical means to unfairly hinder the normal operation of other operators557.
89

They should strengthen the rectification of illegal and criminal activities on theplatform and seek to build a healthy online business environment.558
9.10. Under the Draft Responsibility Guidelines, the obligations can be modified on
the grounds of (i) damage to public interest and national security, (ii)compliance that exceeds their scope of control and technical capabilities, andseriously affects their normal business activities, and (iii) any other laws or
regulations that permit modifications stipulated in national laws.559

90

CHAPTER IV: A FIT-FOR-PURPOSE COMPETITION
REGIME FOR THE INDIAN DIGITAL ECONOMY
1.

THE NEED FOR EX-ANTE COMPETITION INTERVENTION IN DIGITAL MARKETS

1.1.

The Committee observed that competition jurisprudence has traditionallyfavoured ex-post models to ex-ante models of intervention, as the latter bears therisk of false positives (i.e., over-regulation) and a consequent chilling effect oninnovation. The Committee noted that this premise may require rethinking incase of Indian digital markets, for the following reasons.
A.

The complementary relationship between ex-ante and ex-post
enforcement

1.2.

First, the Committee took note of the abundant literature that underscores the
symbiotic relationship between ex-ante and ex-post models of intervention inpromoting fairness and contestability in markets.560 Ex-post competition
enforcement works best when complemented with and supported by ex-ante
regulation. Traditionally, sectoral regulators, through ex-ante regulation, ‘set
the rules of the game’ and competition authorities, through ex-post regulation,
act as ‘umpires of the game’.561 More simply put, sectoral regulators who havea broader mandate to ensure orderly growth in a given sector often stipulate
what should be done by enterprises, while competition authorities, in line with
their limited and sector-agnostic mandate of ‘promoting competition’ acrossmarkets, prescribe what should not be done. They have convergent roles inmaximising consumer welfare.562 The resultant enforcement from a
combination of ex-ante and ex-post approaches sets boundaries for market
players to operate within. In India, digital enterprises do not fall under thepurview of a specific sector or a statute, although aspects of their operations
are regulated in a fragmented manner by a host of different ministries andauthorities. The Committee evaluated two divergent views on whether the exante framework for digital enterprises should be subsumed within theCompetition Act or whether a de novo ex-ante competition legislation isrequired.

1.3.

In light of the above, the Committee first evaluated whether it is feasible toamend the Competition Act to incorporate a chapter specific to ex-ante
regulation in digital markets. The Committee felt that amending the inherent
91

framework of the Competition Act which primarily relies on an ex-post
enforcement model to intervene against large digital enterprises may result in
uncertainty and therefore protracted litigations as regards the scope of theCompetition Act. The Committee noted that the Competition Act is sectoragnostic by design, and as such the inclusion of a separate chapter containing
ex-ante provisions for the regulation of digital enterprises specifically may not
be feasible.
1.4.

The Committee also observed emerging international practice where separate
ex-ante laws for digital markets had been or were in the process of being
enacted in mature jurisdictions such as in the EU (DMA), UK (DMCC) and the
US (such as AICO, OAM, and EPM). Additionally, the Committee
acknowledged the Standing Committee Report’s recommendation that a new‘Digital Competition Act’ should be introduced to ensure a fair, transparent,
and contestable digital ecosystem.563

B.
1.5.

The time-consuming nature of ex-post investigations

Second, ex-post enforcement does not always lead to optimal restoration ofcompetition in evolving and fast-paced markets.564 Investigations into
incumbent players under the Competition Act, which begin after acontravention has occurred, are resource-intensive and time-consuming. In the
meanwhile, the market may irreversibly tip in favour of the incumbent andconsequently drive out competitors. The harm thus caused is irremediable expost facto. The Committee observed that the benefits of early detection andintervention in digital markets tend to outweigh the costs associated withover-regulation.565
C.

Narrow Remedies

1.6.

Third, ex-post competition investigations are limited to the narrow claims
made in each specific case.566 As such, they may not effectively address
repeated conducts by the same digital enterprise,567 or similar conducts bydifferent enterprises568. The Committee observed that addressing suchrecurring patterns of anti-competitive behaviour through an ex-ante digitalcompetition law will lead to significantly increased administrative efficiency.

1.7.

In light of the above discussions, the Committee recommends that a de novo
Digital Competition Act that enables the CCI to selectively regulate large
digital enterprises in an ex-ante manner be enacted. The Committee further
92notes that the proposed Digital Competition Act should complement andstrengthen the existing competition framework governing large digitalenterprises by ensuring timely detection, enforcement, and disposal ofproceedings in digital markets.
1.8.

Noting India’s thriving digital economy and the likelihood of an ex-anteframework to cause undue adverse effect upon innovation, the Committeeemphasises the need to strike a fine balance between increased regulationand enabling innovation. Therefore, the Committee urges that such a Digital
Competition Act may regulate only those enterprises that have a significant
presence and as such, the ability to influence the Indian digital market.

2.

TRADITIONAL MARKETSINTERVENTION

2.1.

The Committee deliberated on thresholds for intervention to be envisaged
under the Digital Competition Act, by discerning the rationale for imposing
asymmetrical obligations only upon ‘dominant’ enterprises under theCompetition Act. The Committee noted that under Section 4 of theCompetition Act, dominance indicates the power of an enterprise tounilaterally influence the market within which it operates.569 Section 19(4) of
the Competition Act lays down sources of such power, and includes factors
such as market share of the entity, its size, resources at its disposal and theeconomic power of such enterprises.

2.2.

The Committee noted many unique features at play in digital markets thatallow digital enterprises to swiftly gain such influence.
A.

VS.

DIGITAL

MARKETS:THRESHOLD

FOR

Data as a resource

The Committee noted that the role played by data is a defining feature of digitalmarkets. 570 Entities in digital markets routinely collect, store, and use large
amounts of data derived from users that transact upon them. 571 Thisaccumulated user-data is an invaluable resource for businesses that requirelarge data samples to study population-wide trends. The Committee also noted
the prevalence of ‘platform markets’ in the digital economy wherein entities
transact on multiple sides, where one side is subsidised by the other.572
Therefore, in case of ‘free’ services, what appears as a free service may not reallybe free - the implicit price is the data that the user parts with.573 The Committee
noted that such practices stand in contrast with traditional markets, wheremoney is the sole medium of exchange.
93

2.3.

The Committee was also cognisant of how data uniquely plays to theadvantage of large incumbents in their entry into related markets. For instance,
the search engine Google’s entry into comparison shopping or the emarketplace giant Amazon’s entry into retail through Amazon Basics areexamples of the consequential vertical integration due to data. 574 The
Committee has also taken note of the stakeholders’ fear575 that once such large
incumbents enter adjacent markets, the aggregated data at their disposal will
result in foreclosure of new entrants, who cannot compete as efficiently
without access to this critical input576.

2.4.

Additionally, the Committee noted that access to volumes of aggregated data
can present a distinct form of competitive advantage.577 A data-rich incumbent
is able to further bolster its market position through feedback loops. Feedback
loops manifest in two ways: a ‘user feedback loop,’ where an entity with alarge user base is able to collect more data to improve the quality of its service
and thereby acquire new users,578 and a ‘monetisation feedback loop,’ whereintermediaries are able to cash in on the aggregated user data to improvetargeted advertisements, which in turn brings in more revenue to invest in thequality of the service, thereby attracting more users579.
B.

Data-Driven Network effects

2.5.

‘Network effects’ refer to increased utility that a user derives from a service
when the number of other users consuming the service increases.580 For
instance, the utility of an e-marketplace increases for a consumer with aconcomitant increase in the number of sellers on the marketplace and viceversa. Similarly, the more users a social network has, the more utility it has toeach of its users.

2.6.

The Committee noted that this creates an effect wherein it is not only the
product, but also the network of its users that bears utility to the user. 581 As
such, the greater is the number of users of a digital service, the harder it
becomes to create a more attractive competitor. This grants an incumbent anenormous first-mover advantage.582 Consequently, for a new entrant offering
similar services as an incumbent, the entrant has to compete not only on thequality/price of service but also with the networks of users offered by theincumbent.
C.

Economies of scale
94

2.7.

Economies of scale refer to a reduction in the per-unit cost of production of agood/service with an increase in the amount produced. Economies of scope
arise when an increase in the number of goods/services produced by anenterprise reduces the total costs of production, as compared to a situation inwhich each one was to be produced by a separate enterprise. An enterprise canbenefit from these economies when it can spread its fixed costs583 over a larger
volume of output, or a larger range of goods/ services, respectively. While thisgenerally holds true for most industries, the Committee observed that thisphenomenon plays out in a more extreme manner in case of digital services.
Moreover, the incremental cost of production incurred to provide services toa newly acquired user, and to provide for greater usage by existing users, isnegligible in case of a digital service. A digital enterprise can collect a
subscription, usage fee, or commission from every user, without incurring any
significant additional cost towards the provision of such a service. Even if theservice is provided at no charge, the enterprise collects valuable digital dataon the user, which can be monetised or used to improve the service.

2.8.

The Committee discerned that these peculiarities also result in incumbents
having an enormous competitive advantage over new entrants in terms of theprice at which a digital service can be offered. Additionally, in order to growin size and reach economies of scale, large digital enterprises may defer theirprofits indefinitely by running at losses, which becomes an additional entry
barrier.584

2.9.

From the above, the Committee felt that the features of digital markets such as
consumer data feed-back loops, network effects, and economies of scale
quickly pivot the market in favour of incumbent enterprises, making suchmarkets inherently prone to concentration.585 The lack of a competitive market
structure also makes sellers/ business users dependent on the digital enterprise
to reach their consumers, making such enterprises gatekeepers to certain
segments of the digital economy.586

2.10.

Further, the conjoint effect of a first-mover advantage, which is amplified byreinforcing data-driven network effects and feedback loops, presents onerous
barriers of entry to competitors. Such markets are also known as Schumpeterianmarkets, where entities do not compete in the market, but compete for themarket,587 resulting in a winner-takes-most dynamic. This results in situations
where an entity, although not statutorily dominant per the Competition Act,may behave and influence markets in ways that dominant entities do.588
952.11.

The Committee concludes that given the unique and self-reinforcing
features at play in digital markets, pegging the CCI’s intervention to an expost facto demonstration of ‘dominance’ may result in situations wherelarge digital enterprises, despite having a significant presence and theability to influence markets, may escape timely scrutiny.

2.12.

Alluding to the recommendations of the Standing Committee Report, theCommittee suggests that a complementary threshold for ex-anteintervention for Systemically Significant Digital Enterprises (“SSDE”) beformulated in the Digital Competition Act. Additionally, cognisant of thetime-consuming and elaborate processes involved in assessing dominanceunder the Competition Act and of the tendency of digital markets toirreversibly tip in favour of the incumbents, the Committee also
recommends that the thresholds be formulated with objective parameters toempower the CCI with tools for early identification and intervention.

96

3.

KEY FEATURES OF THE PROPOSED DIGITAL COMPETITION ACT

3.1.

As elaborated above, the Committee recommends enacting a de novo Digital
Competition Act to selectively regulate Systemically Significant DigitalEnterprises / SSDEs by imposing ex-ante obligations upon them. The Draft
Digital Competition Bill, 2024 (“the Draft DCB”) as prepared and deliberated
by the Committee is attached as Annexure - IV. A schematic representation of
the key features of the Draft DCB and the accompanying deliberations of theCommittee are encapsulated below:

A.
3.2.

Scope and applicability of the Draft DCB

Noting the higher error costs that may be associated with an ex-antecompetition framework, the Committee discussed that the scope of the Draft
DCB should apply only to clearly identified digital services that are susceptible
to concentration to avoid unintended chilling effects. However, the Committee
97

also remained mindful of the pace at which digital markets are progressing,
and, therefore, felt the need to keep the scope of the Draft DCB inclusive andforward-looking. For instance, the Committee took note of the recent
revolutionary developments in Artificial Intelligence (“AI”): ChatGPT, an AIpowered language model, attracted close to 100 million subscribers within 2months of its launch.589 The Committee therefore emphasised the need for
agility in identification of digital services under the Draft DCB in order toenable swifter regulatory responses and minimise the need for repeatedamendments.
3.3.

The Committee took note of the two divergent approaches followedinternationally in determining the applicability of ex-ante competition
instruments: (a) service/market specific approach as adopted in the EU,
Australia, and South Korea; and (b) service/market agnostic approach as
proposed under the DMCC in UK, and as in force under the TFDP Act inJapan.

3.4.

For instance, the EC has identified a list of ten digital services as ‘core platform
services’590 for the purposes of ex-ante intervention under the DMA591.
Drawing from expert studies and enforcement practices in European andglobal digital markets, these services were identified as those with weakcontestability, a higher propensity for anti-competitive practices,592 and thepotential to impact a large number of end users and business users 593.
Similarly, in Australia594 and South Korea,595 the ex-ante instruments in force
are applicable only to pre-identified markets, i.e., digital news publishers andmobile app-stores, respectively. The Committee discerned that pre-identifying
markets/services fosters certainty for market players and regulators alike.
Such certainty is of particular importance especially when the obligation toself-assess and notify the regulator rests on the parties.596

3.5.

On the other hand, the UK, Japan, and Germany have refrained from preidentifying the specific markets/services that require ex-ante competition
scrutiny. The UK’s DMCC is proposed to be applicable to all ‘digital
activities’,597 while Japan’s TFDP Act is applicable to specified ‘digitalplatforms’ irrespective of the market the platform operates in or the services it
provides598. Similarly, in Germany, Section 19a of the ARC does not restrict theapplicability of ex-ante powers to any pre-determined markets/services.599 The
Committee observed that such an approach allows for greater adaptability andtherefore to respond swiftly to dynamism in digital markets.

98

3.6.

In order to strike a balance between certainty and flexibility, the Committee
recommends that the Draft DCB should apply to an inclusive and preidentified list of Core Digital Services that are susceptible to concentration
and anti-competitive behaviour.600 Such a list, the Committee recommends,
should be guided by CCI’s enforcement experience, market studies, as wellas emerging international practices. Additionally, recognising the dynamic
nature of digital markets, the Committee also suggests that the list of Core
Digital Services be provided as a Schedule to the Draft DCB in order toaccord flexibility for the Central Government to add new digital services
from time to time.601
B.

Thresholds and criteria for designation as an SSDE

3.7.

During the deliberations on the Draft DCB, the Committee emphasised that
this law should envisage thresholds to ‘catch’ those entities that have thepower to influence digital markets in a manner analogous to dominant entities.
Noting the difficulties associated with using traditional parameters to assess
dominance in digital markets, the Committee recommended that the criteria
for SSDEs be formulated expressly based on attributes that allow entities toestablish significant presence and influence in such markets. Concomitantly,
the Committee was also of the view that the effectiveness of an ex-ante model
will hinge on precise identification of SSDEs in digital markets and therefore
may require quantitative/objective thresholds.

3.8.

In this regard, the Committee sought to carry out a comparative study of theparameters envisaged under ex-ante competition instruments internationally.
The Committee observed that these parameters include both quantitative
thresholds (objective markers of significant presence that allow for swifter
identification) and qualitative criteria (subjective factors that are indicative ofan entity’s ability to influence the market).

99

Table: Parameters for intervention under ex-ante competition instruments ininternational jurisdictions602
S. No.

Jurisdiction

Applicable law

Nature of the factor
Quantitative
thresholds

Qualitative
criteria

✔

1.

EU

DMA

2.

UK

DMCC

✔
X603

3.

Germany

ARC

X

✔

4.

Australia

Bargaining CodeX✔

5th DPSI Report

✔

✔

AICO

✔

✔

EPM

✔

OAM

✔

✔
X

✔
X

✔

✔

✔

-

-

-

-

5.

USA

6.

Japan

TFDP Act

7.

China

AML (as amended
in 2022)
Draft
Classification
Guidelines
App-Store Act

8.

South
Korea604

Platform
Guidelines
I.

✔

X

QUANTITATIVE THRESHOLDS

3.9.

The Committee observed that providing quantitative thresholds, i.e. objective
markers that may be used as a ‘proxy’ to estimate an entity’s systemic
significance in digital markets, allows for swifter identification and earlyintervention.

3.10.

The Committee noted the manner in which the IT Rules, 2021 identifies
Significant Social Media Intermediaries. Under these rules, any social media
intermediary that has more than fifty lakh registered users is a Significant
Social Media Intermediary, which becomes subject to additional obligations.
The Committee considered whether the Draft DCB should also similarly
envisage thresholds linked to user numbers.
100

3.11.

However, upon further discussion, the Committee observed that certain
digital enterprises may have a significant spread in terms of users but may lack
the requisite financial muscle to foreclose competition. In order to avoid‘catching’ such enterprises under the ambit of the Draft DCB, the Committee
proposed that the objective markers should holistically account for the overall
strength of the enterprise, inclusive of the financial strength of its group
entities. This would ensure that only digital enterprises whose Core Digital
Service has significantly penetrated the market in India in terms of user base,and which are backed by significant economic strength (whether at theindividual or group level), would be designated as SSDEs.

3.12.

The Committee took note of the EU model wherein similar quantitative
thresholds are used to identify potential Gatekeepers based on size andinternal market impact (such as annual EU turnover, average market
capitalisation or the equivalent fair market value, and presence in various
Member States) and economic dependency (such as the number of end users
and business users).605 The Committee also observed the UK model wherein
the DMCC accords SMS status to undertakings if they meet certain qualitative
criteria, subject to them first satisfying the quantitative ‘turnover’ condition.606
In addition, the Committee examined the proposed legislative instruments in
the US where ‘Covered Platforms’ are designated based on objective indicators
relating to the number of end users and business users, net annual sales, andmarket capitalisation.607

3.13.

In light of the above, the Committee recommends including quantitative
thresholds for identifying and designating an enterprise as an SSDE under
the Draft DCB. The Committee further recommends that such a quantitative
threshold be based on a dual test which demonstrates significant presencein the context of competition concerns: (a) ‘the significant financial strength’
test which comprises quantitative thresholds serving as proxies for
economic power, i.e. an entity’s Indian turnover, global turnover, grossmerchandise value, and global market capitalisation or equivalent fairvalue, at an enterprise or group level, and which should be fulfilledconsistently for a period of three financial years, thereby demonstrating
persistent economic strength; and (b) the ‘significant spread’ test which
comprises metrics relating to the number of business users and end users of
the Core Digital Service in India, which should also be fulfilled consistently
for a period of three financial years. The Committee also recommends thatan enterprise should be deemed as an SSDE when it fulfils any of the several
thresholds of the ‘significant financial strength’ test along with fulfilling101

either the end/business users’ thresholds under the ‘significant spread’ test.
3.14.

The Committee further evaluated whether the thresholds should be stipulated
under the Draft DCB or through subordinate legislative instruments(regulations/rules/notifications). However, the Committee noted that theextant practice under the Competition Act wherein quantitative thresholds
were provided for upfront within the statute for notification of combinations608
is well-received by market participants609. The Committee also noted thatinternational practice also supports encoding the quantitative thresholds
within the statute itself.610 Therefore, the Committee recommends indicating
quantitative thresholds as base values for designation of SSDEs under the
Draft DCB.
a.

Thresholds under the ‘significant financial strength’ test
i.

3.15.

The Committee was in agreement that the turnover of an enterprise, as under
the Competition Act, serves as a valuable indicator of an enterprise’s financial
strength. As regards value of Indian turnover to be stipulated under the Draft
DCB, the Committee at first observed the turnover values that trigger
notifiability for combinations under Section 5 of the Competition Act.611
Presently, any combination transaction between two enterprises involving aturnover equal to or more than INR 6000 crore must be notified ex-ante to the
CCI. Similarly, the Committee took note of the fact that the Competition(Amendment) Act, 2023 has mandated notification of combinations where thevalue of transaction is equal to or exceeds INR 2000 crore. It was also notedthat the value of annual turnover to trigger notification under the DMA (forthe EU, comprising 27 countries) is EUR 7.5 billion. Noting these values, andbased on the turnover values of large digital enterprises that have come under
CCI’s scrutiny, the Committee recommends a base value of INR 4000 crore
for Indian turnover.
ii.

3.16.

Turnover in India

Global Turnover

The Committee remained cognisant of the difficulty faced by CCI in obtaining
accurate figures for the relevant India-based turnover of digital enterprises.
The Committee examined recent orders passed by the CCI under Section 27 of
the Competition Act wherein digital enterprises had submitted incomplete
and inconsistent data to the CCI in respect of India-based turnover, which was
further subject to multiple caveats and disclaimers.612 As such, the Committee
102

recommends incorporating global turnover as another criterion in line with
the UK’s DMCC. The Committee noted the UK figure for global turnover
which stands at GBP 25 billion (approximately USD 32 billion). The
Committee recommends that a similar base value, i.e. USD 30 billion,
should be encoded into the Draft DCB for the purposes of the global
turnover threshold.
iii.
3.17.

Further, based on the CCI’s extensive enforcement history in e-commercemarkets,613 the Committee has noted that for certain online intermediation
services such as e-marketplaces, the Gross Merchandise Value (“GMV”) of theenterprise is a more accurate indicator of the volume of commerce carried out
by or through the enterprise’s Core Digital Service.614 Accordingly, in addition
to turnover-based thresholds, the Committee recommends that a GMV withbase value of INR 16,000 crore (approximately USD 1.95 billion) be
envisaged as a distinct quantitative threshold.
iv.

3.18.

Global Market Capitalisation

The Committee, noting that market capitalisation often serves as an accurate
indicator of the value of a listed company,615 recommends the same as aquantitative threshold under the Draft DCB. As regards to the value of global
market capitalisation, the Committee noted that the value stipulated under the
DMA was arrived at based on the observed figures of market capitalisation of
the largest digital undertakings that have been scrutinised by the EC andnational competition authorities in recent years. Noting that the evaluation ofmarket capitalisation of a global entity remains unchanged whether calculated
in the EU or India, the Committee recommends adopting a base value of USD
75 billion, a figure similar to the EUR 75 billion as codified under the DMA.
The Committee opined that the manner of calculation / determination of thevalue of global market capitalisation should be specified throughregulations framed by the CCI. For unlisted companies, the Committee
recommends that a value equivalent to global market capitalization thatsimilarly indicates the financial position of unlisted companies becomputed in a manner as may be prescribed by the Central Government.
b.

3.19.

Gross Merchandise Value

Thresholds under the ‘significant spread’ test

While arriving at values related to end users and business users, theCommittee first noted the figures under the IT Rules for the purposes of103

identifying a ‘Significant Social Media Intermediary’, which currently stand at
fifty lakh registered users. However, the IT Rules do not distinguish between
end and business users.616 The Committee felt that for the purposes of the Draft
DCB, ‘end users’ and ‘business users’ should be defined separately. The
Committee also noted that under the DMA, an undertaking’s service ispresumed to be an ‘important gateway for business users to reach end users’
if in the last financial year, it has at least 45 million monthly active end users
and 10,000 yearly active business users in the EU.617 The Committee observedthat the respective figures for such criteria were based on a substantive
percentage of the entire population and of business users in the EU using coreplatform services.618 The Committee noted that the DMA’s threshold for activeend users had been calculated as 10% of the EU’s population, parallel to its
calculation for the Digital Services Act, 2022.619
3.20.

Unlike the EU, the Committee feels that quantitative figures relating to end
users and business users under the Draft DCB should not be solely based on
Indian population figures. The Committee took further note of the disparity
between the EU and India as regards digital literacy rates (54% in the EU620
compared to 38% in India621); average internet penetration (89% in the EU622
compared to 48.7% in India623 in 2022); and GDP per capita in terms ofpurchasing power parity (approx. USD 57,000 for the EU compared to approx.
USD 9000 for India)624. The Committee concluded that the thresholds for activeend users and business users under the Draft DCB would have to becontextualised against factors specific to India such as the number of active
internet users, linguistic and regional considerations, household earning,
spending power, gender, and rural – urban divide.625 Based on the above, theCommittee recommends that the Draft DCB incorporates ‘base values’ of atleast 1,00,00,000 (one crore) end users or at least 10,000 (ten thousand)business users in India for the purposes of the significant spread test.
c.

The need for quantitative thresholds specific to each Core Digital
Service

3.21.

The Committee considered whether separate quantitative thresholds (bothunder the significant financial test and under the significant spread test)
should be specified for each Core Digital Service given that financial strengthand spread metrics differ across different Core Digital Services depending on
the nature and size of their respective markets.

3.22.

For instance, the Committee noted the wide disparity in global turnover in theyear 2022 of Meta, the holding company of Facebook (the most popular social
104networking service), i.e. approximately USD 116.6 billion 626 vis-à-vis that ofUber (a renowned cab aggregator service, covered under ‘online
intermediation service under the Draft DCB), i.e. USD 32 billion627.
3.23.

The Committee also noted that the number of end users and business users
would differ for each Core Digital Service and business model. For instance, it
has been reported that while 60.72% of the Indian population used social
media in 2023,628 user penetration in the online food delivery market was only
16.2%629. In addition, while there is a negligible difference in the percentage ofactive internet users using social media in urban areas (73%) and rural areas(67%),630 the online food delivery market is mainly concentrated in Tier-I
cities631. The officers from CCI, based on the findings from the CCI’s Ecommerce market study and its enforcement practice, briefed the Committee
on the difference in the penetration of e-commerce activities such as fooddelivery and hotel booking services in rural versus urban areas.

3.24.

Taking the above into consideration, the Committee felt that, in theory, a casecould be made for specifying different quantitative thresholds for each Core
Digital Service under the Draft DCB. However, the Committee took note of theoperational difficulties in obtaining data for accurately setting different
thresholds for each Core Digital Service. The Committee also examined theEU, UK, and US models wherein separate thresholds for different platform
services were not provided. The Committee therefore recommends that theDraft DCB stipulate a uniform set of thresholds to identify and designate
SSDEs, irrespective of the Core Digital Service they provide. Obligations
may however be differentiated.632
d.

3.25.

Quantitative thresholds to be periodically revised

The Committee is aware that the base values are susceptible to change given
the rapid pace at which digital markets are growing and given that the numberof business and end users differ across the Core Digital Services. A view was
also expressed by certain Committee members that the base values
recommended for user-based thresholds may be too low and may cause achilling effect on innovation in case smaller digital enterprises are designatedas SSDEs and made to comply with prescriptive ex-ante obligations. As such,in order to provide certainty to market participants and simultaneously
introduce a measure of flexibility to account for changing market dynamics,
the Committee recommends that the base values should be reviewed every
three years. Concomitantly, the Committee also recommends that the CCI,
while framing regulations for a Core Digital Service, may consider whether105to adopt a graded approach of compliance by outlining differentiated setsof obligations based on factors such as nature of the market and number ofusers.633 This will ensure that all obligations under the Draft DCB are notnecessarily applicable uniformly to each enterprise designated as an SSDE.634
In addition, the Committee proposes that the CCI be empowered to frame
specific regulations detailing the manner of determination and calculationof the user-based thresholds.635
3.26.

In line with the view to model the ex-ante framework under the Draft DCB
in line with the extant combinations' regime, the Committee recommends
that the digital enterprises should self-assess their fulfilment of the above
quantitative thresholds and report the same to the CCI in such form andmanner as may be specified by regulations. The CCI may then proceed todesignate the enterprise as an SSDE. In the spirit of promoting ease of doing
business, the Committee further recommends that the procedure for selfnotification by SSDEs to the CCI should not be cumbersome and that the
CCI may consider instituting a self-reporting mechanism through an online
portal. Furthermore, the Committee recommends that upon designation as
an SSDE, such a designation should remain valid for a period of three years,
unless there is a significant change in market dynamics.
e.

Associate Digital Enterprises

3.27.

The Committee observed that the definition of ‘undertaking’ under the DMA
includes all linked / connected enterprises or undertakings forming a groupon account of direct / indirect control of one enterprise by the other. 636 The
Committee considered whether all entities in a group to which the SSDE
belongs need to necessarily fulfil the same obligations which are to becomplied with by the SSDE. It was also observed that within a large group,
many entities may have no direct or indirect role in the provision of the Core
Digital Services. The Committee noted that the corresponding definition of‘enterprise’ under the Competition Act or Draft DCB does not include group637
entities. Taking cognizance of the above, the Committee deliberated on apotential scenario wherein compliance may be required from multiple digitalenterprises within a group that are engaged in providing a Core Digital
Service. This could be on account of the holding company of the ‘group’controlling the management / affairs of such SSDE or holding ownership over
key intellectual property rights which enable the provision of the concernedCore Digital Service.

3.28.

The Committee examined the recent decisions issued by the EC for designation
106

of Gatekeepers under the DMA638 and observed that as regards designationsof enterprises that are part of a complexly structured group, the DMA accords
sufficient flexibility to the EC to designate the holding digital enterprise,
together with all legal entities directly or indirectly controlled by it in relation
to the provision of core platform service, as a ‘Gatekeeper’.639 The Committee
observed that in a similar manner, the FCO in Germany had determined thatthe holding company of a large digital enterprise, including its affiliates,640 isof paramount significance for competition across markets.641 The Committee
noted that in cases of enterprises which are part of a group, an approach
wherein the designation is not limited to one enterprise alone and is extended
to the whole group, is desirable to ensure effective compliance and anticircumvention of obligations under the Draft DCB.
3.29.

The Committee envisaged two scenarios in the context of SSDE designation incases of group enterprise(s). First, the holding digital enterprise, which has
control over the enterprise providing the Core Digital Service, may bedesignated as an SSDE. Its group entities which are also involved in theprovision of the Core Digital Service (whether directly or indirectly) may bedesignated as ‘Associate Digital Enterprises’ to the SSDE (“ADE”). The
Committee noted that designating the controlling entity as an SSDE would
prevent circumvention of obligations under the Draft DCB.642 Second, theCommittee noted that in certain cases, it may be beneficial to designate a nonholding digital enterprise most directly involved in providing the Core Digital
Service in India as an SSDE rather than the holding enterprise for ease ofcommunication and compliance reporting. In such case, the non-holding digitalenterprise may be designated as an SSDE and its holding enterprise and othergroup entities involved in the provision of the Core Digital Service may bedesignated as its ADEs.

3.30.

The Committee noted that it may be difficult for the CCI to identify eachenterprise which is involved in directly or indirectly providing a Core Digital
Service for the purposes of designating SSDEs or ADEs, especially in cases oflarge digital conglomerates with global operations.643 Concomitantly, theCommittee took note of the practice in the EU wherein the notifying
undertaking is required to provide the identity of the entities operating eachof its core platform services and the entities controlling644 the former entities(directly or indirectly), for the purposes of Gatekeeper designation645. In viewof the same, the Committee proposes that notifying enterprises should be
required to identify all other enterprises within its group which are directly
or indirectly involved in the provision of a Core Digital Service.
107

3.31.

The Committee further notes that it may be prudent in many cases that theholding digital enterprise exercising control over the enterprise providing
Core Digital Services be designated as the SSDE and its other group
enterprises which are directly or indirectly engaged in the provision of aCore Digital Service should be designated as ADEs. However, theCommittee also noted that the above may not be prudent in othercircumstances. Therefore, the Committee proposes that the CCI should beaccorded the flexibility to identify the most appropriate enterprise whose
compliance can be proactively monitored under the Draft DCB (for instance,
an enterprise directly involved in the provision of the Core Digital Service
in India). Such enterprise may then be designated as an SSDE and its group
enterprises (whether at the holding or subsidiary level) involved in theprovision of the Core Digital Services may be designated as ADEs. In casesof standalone enterprises, such enterprise itself should be designated as an
SSDE.
II.

QUALITATIVE CRITERIA

3.32.

The Committee was in general consensus on the need to identify specificparameters that indicate an entity’s ability to influence digital markets. Suchqualitative criteria are especially important in instances where the proxies
envisaged as quantitative thresholds may not suffice to encompass all digitalenterprises that have a position of significant presence in Indian digitalmarkets. The Committee therefore affirmed that the CCI should be
empowered to intervene where the enterprise does not meet the quantitative
thresholds, but the CCI has reason to believe that such an enterprise enjoys asignificant presence in respect of a Core Digital Service.

3.33.

Therefore, in line with the recommendations of the Standing Committee
Report, the CCI’s enforcement practice in digital markets, and emerging
global practices, the Committee recommends that the Draft DCB envisage aset of qualitative criteria for SSDE designation, which encompasses metrics
such as resources of the enterprise, volumes of data aggregated, direct andindirect network effects at play, and the entity’s bargaining position vis-àvis its business users and consumers. The Committee is of the view that suchfactors are indicative of the manner and extent of the enterprise’s ability to
set the rules of the ecosystem and influence the market.
C.

Obligations and exemptions

108

I.

OBLIGATIONS

3.34.

The Committee has deliberated on obligations for SSDEs by taking note of theten ACPs identified by the Standing Committee Report646 in December 2022.
One of the identified ACPs relates to practices concerning mergers andacquisitions, which the Committee felt has now been adequately dealt with
under the Competition (Amendment) Act, 2023.647 A key amendment
introduced pertains to ‘Deal Value Thresholds’,648 wherein any combination
whose transaction value exceeds INR 2000 crore, requires ex-ante approval by
the CCI. The Committee, cognisant of the ability of this amendment to target
killer acquisitions, felt that it would be prudent to leave out mergers andacquisitions while formulating ex-ante obligations under the Draft DCB.

3.35.

Of the nine other ACPs, the Committee deliberated at length as to whether
they should all be prohibited in a similar manner and extent under the Draft
DCB. In this line, the Committee noted that not all ACPs are anti-competitive
to the same degree and some ACPs may also have pro-competitive benefits.
For instance, the Committee extensively deliberated how large digitalenterprises that engage in self-preferencing practices almost always cause anticompetitive harm. They can unfairly divert traffic from rivals and increase thelatter’s costs, as observed by the CCI in one case.649 They can also discourage
entry and innovation by third-party suppliers, as pointed out by leading
economists and illustrated by several cases decided by the European
Commission and national competition authorities in Europe.650 However, theCommittee also considered as to how practices such as tying and bundlingwhich may be anti-competitive in certain circumstances, may also have procompetitive benefits such as reduced costs of manufacturing and distribution,and enhanced product quality in other circumstances.651

3.36.

The Committee noted that some ACPs may have some pro-competitive
benefits as well and then proceeded to deliberate on how the pro-competitiveeffects of these ACPs may be taken into consideration while formulating exante obligations under the Draft DCB.

3.37.

The Committee concurs that it is prudent to lay down ex-ante obligations in theform of broad principles in the Draft DCB.652 Taking into account thepeculiarities of different business models, the Committee recommends that the
specificities on the manner and procedure relating to the applicability of exante obligations653 are to be specified for each Core Digital Service throughsubordinate legislation654. The Committee was apprised of the model of109‘Participative Antitrust’655 which encourages collaboration between
governments, and industry and consumer representatives to create rules thatfurther innovation by market players of all sizes. The Committee
recommended a robust consultative process with all key stakeholders of thedigital economy to frame these regulations, borrowing from procedure from
Section 64A656 of the Competition Act in spirit. In particular, the Committee
observed that the Draft DCB, being an ex-ante law, should mandate
consultation with statutory authorities or government bodies before theframing of regulations.
3.38.

In light of the above deliberations, the Committee first recommends that outof the ten ACPs identified in the Standing Committee Report, the ACP
relating to mergers and acquisitions may not be included in the Draft DCB
given recent amendments to the Competition Act. Second, cognisant of thevarying degrees of anti-competitive harms that are likely to emanate fromdifferent ACPs, the Committee recommends that the Draft DCB incorporate
an agile principle-based framework that lays down the broad contours ofeach ACP. The Committee further opines that the particulars of such ex-ante
obligations should be stipulated through regulations for each Core Digital
Service.657 The CCI may even specify different conduct requirements fordifferent business models within a Core Digital Service, if applicable, in a
graduated manner.658 The Committee further recommends that theregulations should be made through a consultative process by taking theviews of all stakeholders involved, including market players of all sizes,
business users and end users, representatives of civil society and the various
ministries that regulate the Indian digital economy.

3.39.

The Committee also proposes that all SSDEs should be obligated to institutea transparent grievance redressal mechanism upon designation.659 The
specific operational modalities of setting up such a mechanism should beoutlined by the CCI by way of regulations.

3.40.

As regards the obligations for ADEs, the Committee proposes that bydefault, all the broad principle-based obligations under the Draft DCB
should apply to ADEs as well. However, in cases where ADEs are only
partly or indirectly involved in the provision of Core Digital Services, the
CCI should be empowered to specify differential obligations for ADEs so
as to reduce their compliance burden. In such cases, the CCI may specify alower degree of compliance with obligations by ADEs or outline certain
obligations which need not be complied with.

110

II.
3.41.

EXEMPTIONS

During the course of its deliberations, the Committee noted the need to
stipulate two kinds of exemptions, first, the CCI’s expert prerogative to exempt
the applicability of certain obligations through regulations; and second, theCentral Government’s power to exempt an enterprise from the purview of the
Draft DCB on grounds of public interest and national security.
a.

Exemptions from obligations through regulations

3.42.

During the Committee’s deliberations on obligations, the Committee also felt
the need to enable the CCI to stipulate exemptions from obligations on
grounds such as economic viability and protection of existing intellectual
property rights. The Committee noted that such power will allow CCI toformulate specific instances under which the conduct of SSDEs may bejustifiable.

3.43.

Noting that the obligations for SSDEs would differ from one Core Digital
Service to the other, the Committee opined exemptions from such obligations
would also consequently differ, and therefore recommended that exemptions
should not be hardwired in the Draft DCB. The Committee suggests CCI may
consider framing accompanying exemptions in the same set of regulations
relating to obligations. The Committee however felt legislative guidance on
the grounds for such exemptions should be laid down in the Draft DCB.

3.44. Furthermore, the Committee also deliberated if it would be prudent to have an
advance ruling mechanism where enterprises may avail a stipulated exemption
prior to fully complying with an obligation. The Committee however felt that
implementing a constrictive system of advance ruling, in practice, could
become akin to the Licence Raj regime where enterprises would need torepeatedly approach regulators for permission to innovate. The Committee
noted that such a mechanism would therefore stand at odds with objectives ofan innovation-driven ecosystem, 660 and therefore concluded against advanced
ruling to obtain exemptions.
3.45. The Committee recommends that grounds under which compliance from theex-ante obligations may be exempted should be statutorily encoded.
However, the attributes of such exemptions should be devised with regard
to the uniqueness of each Core Digital Service, and therefore is best left to
the CCI’s expertise. As such, the Committee feels that exemptions should be111

woven into the regulations on obligations, depending on the Core Digital
Service and related business models in question.
b. Exemptions by the Central Government
3.46. The Committee began its deliberations on exemption powers of the Central
Government by drawing from Section 54 of the Competition Act wherein theCentral Government has the power to specify in a notification the exemption
for “(a) any class of enterprise in the interest of security of state or public interest, (b)any practice or agreement arising out of any obligation under any treaty, or (c) any
enterprise that performs a sovereign function”.661
3.47. The Committee felt that a similar over-arching power to exempt certain
enterprises from the Draft DCB should be vested with the Central
Government.662 The Committee also deliberated if start-ups as a distinct class ofenterprises should be statutorily exempt from the Draft DCB. However, theCommittee concluded that blanket exemption for start-ups should not be
encoded as the legal criteria for start-ups is presently amorphous. Further, it isdoubtful that any enterprise which meets the financial thresholds stated in
Section 3(2)(a) of the Draft DCB would continue to be classified as a start-up.
3.48. In light of the above, the Committee recommends that the Draft DCB should
empower the Central Government to exempt certain enterprises or classes ofenterprises from the purview of the Draft DCB, in a manner analogous to
Section 54 of the Competition Act.
D.

Enforcement and Remedies

I.

ENFORCEMENT

3.49. A view was expressed with regard to the possibility of overlapping
jurisdictions between the Competition Act and the Draft DCB, which could
potentially lead to simultaneous or different proceedings under both thestatutes. The Committee noted the difference in approach followed under theCompetition Act which evaluates the anti-competitive effects of a particular
conduct on the market vis-à-vis the Draft DCB wherein the contravention ofpre-determined conduct requirements by SSDEs would be considered illegal
per se. The Committee considered two scenarios: first, where an SSDE may be
penalised for violating its obligations under the Draft DCB but may not befound to have abused its dominant position under the Competition Act; andsecond, where the CCI may return a finding of abuse of dominant position112

against an enterprise, but its behaviour may not contravene the particular
conduct requirements specified under the Draft DCB. The Committee further
noted that a single conduct could potentially be penalised twice under theCompetition Act itself.663
3.50. In view of the foregoing, the Committee thus opined that on account of the
distinct nature of regulatory intervention and proceedings under both theCompetition Act and the Draft DCB, CCI should not be disempowered toproceed against a digital enterprise in parallel under both statutes. However,in the event the CCI initiates two parallel proceedings under the two statutes
for the same conduct, there is a need to guard against the possibility that theresulting penalties upon the enterprise may be seen as being disproportionate.
3.51. The Committee remained cognisant that the enforcement of both competition
laws is entrusted with the CCI. The CCI is an expert body vested with thediscretion to rationalise penalties arising out of two different proceedings
examining the same/substantially similar conduct by an enterprise.664 It wasnoted that both under the Competition Act and the Draft DCB, CCI isempowered to issue suitable penalty guidelines. The Committee therefore
concluded that such overlaps in proceedings and penalties may be resolved ona case-by-case basis by the CCI.
3.52. In the same vein, given that the enforcement of the Draft DCB would be
entrusted with the CCI, the Committee was in general agreement to borrow theenforcement framework from the Competition Act. As such, the Committee
agreed that the powers of the CCI under the Competition Act including thepowers of the Director General,665 the right to claim compensation for harms
ensued by SSDEs’ conducts,666 the power to issue interim orders,667 and otherprovisions of such nature should apply mutatis mutandis subject to any specificmodifications that may be essential to give effect to the Draft DCB.
3.53. The Committee also took note of the Settlements and Commitments regime
introduced through the Competition (Amendment) Act, 2023 which allows fora shorter timeframe for investigations and resolution of cases. To this end, theCommittee sought it fit to borrow the settlements668 and commitments669
regime for the purposes of the Draft DCB whose enforcement hinges ontimelines. The Committee noted that the intent of the settlement andcommitment mechanisms is to enable swifter resolution of cases sinceapplications in both cases are accepted only after the CCI has formed a prima

113

facie opinion, thus eliminating the need for a fact-finding exercise andaccelerating an otherwise lengthy enforcement process.
3.54. The Committee took note of the observations of stakeholders for setting up a
Digital Markets Unit (“DMU”) under the aegis of the CCI. The Committee
deliberated at length on the importance of building CCI’s technical capacity tokeep pace with the dynamism of digital markets and proactively engage withall stakeholders involved.
3.55. The Committee took note of international practices wherein a special division
for enforcement of the competition regime pertaining to digital markets has
been established. For instance, the Committee noted that in the United
Kingdom, competition enforcement for digital markets was sought to be
entrusted to a separate entity named the ‘Digital Markets Unit’ (UK DMU),
housed within the Competition and Markets Authority, i.e., UK’s primary
regulator for competition enforcement. The Committee observed that the UK
DMU is envisaged to enforce UK’s pro-competition regime swiftly and has
been accorded powers such as granting the ‘Significant Market Status’ to digital
undertakings; enforcing codes of conduct; and monitoring the activities of SMS
entities.670 The Committee also observed that in the EU, the enforcement of the
DMA is to be shared between the EC’s departments for competition (DG
COMP) and technology policy (DG CONNECT).671 The Committee also
lauded the CCI’s initiative in setting up a Digital Markets and Data Unit(“DMDU”), a specialised interdisciplinary centre of expertise for digitalmarkets, housed within the CCI.672 As such, the Committee concluded that an
express provision to set up a DMU under the Draft DCB is not required.
3.56. The Committee noted that the DMDU was set up to enforce ex-post provisions
under the Competition Act and therefore it may be strengthened on an urgent
basis so that it gains enough experience by the time the Draft DCB is enacted.
Given the strategic importance of the DMDU, the Committee strongly
recommended that the DMDU should be staffed with experts on emerging
technologies to build practices that allow for early detection and disposal ofcases pertaining to digital markets. The Committee urged that such experts
perform advisory roles with respect to both enforcement and regulationmaking under the Draft DCB, especially given the highly technical nature of exante regulations. The Committee also observed that such technical capacity isalso required to allow for swifter identification of compliance breaches under
the Draft DCB.

114

3.57. For the purposes of enforcement of the Draft DCB, the Committee sees it fit
to borrow from the procedural framework of the Competition Act. The
Committee also urges that the CCI bolsters its technical capacity, including
within the Director General’s office, to ensure early detection and disposalof cases, dynamic regulation-making and all other ancillary regulatory
functions in digital markets by onboarding experts. The Committee further
recommends that a separate bench should be instituted within the NCLAT
for speedy disposal of appeals, particularly those relating to digital markets.
II.

REMEDIES

3.58. The Committee observed that competition authorities frequently categorise
remedies imposed against anti-competitive behaviour into two broad classes:
structural remedies such as divestment which focus on restoring competition
by altering market structure, and behavioural remedies such as commitments
which seek to modify the conduct of enterprises through orders or contractual
arrangements. Behavioural remedies typically require oversight by thecompetition regulator to ensure compliance. The Committee noted that somejurisdictions also allow criminal sanctions against competition
infringements.673
3.59. The Competition Act has primarily relied on behavioural remedies and highmonetary penalties that are deterring in nature in order to address anticompetitive behaviour in Indian markets.674 In this context, the Committee took
note of the recent efforts by the Central Government to promote ease of doing
business in India, which includes decriminalising of corporate offences.675
Therefore, in order to strike a balance between ease of doing business anddeterrence, the Committee recommended that contraventions of the Draft DCB
should be met with civil penalties.676
3.60. The table below contains a brief snapshot of the quantum of penalties ascontemplated under the ex-ante competition instruments in the EU, UK,
Germany, and USA.

115

Table: Penalties under ex-ante instruments in international jurisdictions
S. No.
1.

Jurisdiction
EU

2.

UK

Applicable Penalties
DMA• Systematic non-compliance: The EC may fine thegatekeeper up to 10% of its total worldwide
turnover in the preceding financial year if it
fails to carry out any measures imposed against
it for systematic non-compliance or if it fails tocarry out interim measures as ordered by the
EC.677• Repeated infringements: The EC may fine thegatekeeper up to 20% of its total worldwide
turnover in the preceding financial year if there
have been repeated infringements in the same
core platform service that have already been
subject to a non-compliance decision in theprevious 8 years.678• Minor contraventions: For minor contraventions
including failing to report, provide access to, or
share required information, the EC may fine agatekeeper up to 1% of total worldwide
turnover in the preceding financial year.679• Non-compliance: The EC may fine a gatekeeper
up to 5% of the average worldwide daily
turnover in the previous financial year per day
calculated from the date of the non-compliancedecision, to compel compliance with decisions
and measures under the DMA.680
DMCC• Failure to comply with the competition
requirements681
orwithinvestigative682
requirements
can attract penalties which
may be a: (i) fixed amount; (ii) amountcalculated by reference to a daily rate; or (iii) a
combination of the above683.
• Non-compliance: In case of failure to comply
with competition requirements, the maximum
amounts of a penalty that may be imposed are:(i) in the case of a fixed amount, 10% of the total
116

S. No.

3.

Jurisdiction

Germany

Applicable Penalties
turnover inside and outside the UK 684 of the
SMS entity or group that the SMS entity is partof;685 (ii) in the case of an amount calculated byreference to a daily rate, 5% of the daily
turnover inside and outside the UK 686 of the
SMS entity or group that the SMS entity is partof;687 or (iii) in case of a combination of theabove, the same rates as discussed above688. Incase the CMA considers that an SMS entity has
failed to comply with its conduct requirements
without any reasonable excuse, the amount ofpenalty imposed must be fixed.689• Minor contraventions: In case of failure tocomply with investigative requirements, i.e.
failure to submit information to the CMA orgive information which is false or misleading ina material particular,690 both undertakings andindividuals691 can be penalised692. The
maximum penalty that may be imposed on anundertaking are: (i) in the case of a fixedamount, 1% of the total value of its turnover(both inside and outside the United
Kingdom);693 (ii) in the case of an amountcalculated by reference to a daily rate, 5% of thetotal value of its daily turnover (both inside andoutside the United Kingdom) for eachday;694 and (iii) in case of a combination of theabove, the same rates as discussed
above695. The maximum penalty that may be
imposed on an individual are: (i) in the case of
a fixed amount, GBP 30,000;696 and (ii) in thecase of an amount calculated by reference toa daily rate, GBP 15,000 per day697. Apart from
this, the DMCC also provides for director
disqualification.698
ARC• Breach: Intentional or negligent acts that violate
an enforceable order amount to an
administrative offence which may amount to a117

S. No.

4.

Jurisdiction

USA

Applicable Penalties
fine of up to EUR 1 million.699 A fine exceeding
such an amount may be levied uponundertakings or an association of undertakings,
and it shall not exceed 10% of the total turnoverof the undertaking or association ofundertakings, generated in the year prior to thelaunch of the FCO decision.700
AICO• Breach: Covered Platform operators may facepenalties of up to 15% of their total US revenue
generated in the preceding calendar year or
30% of their US revenue in any affected ortargeted line of business during the period inwhich the unlawful conduct takes place,whichever is greater, for violation of theAICO.701• Repeat offences: If it is determined that a Covered
Platform operator has engaged in a pattern orpractice of violating the AICO, the Chief
Executive Officer, and any other corporate
officer may be ordered to forfeit any
compensation received by them during the 12months preceding or following the filing of acomplaint in this regard.702
EPM• Breach:
Any person operating a Covered
Platform or any individual who is an officer,
director, partner, or employee of such person,
may face penalties of up to 15% of its total
average daily US revenue in the preceding
calendar year or 30% of its total average daily
US revenue in any affected or targeted line ofbusiness during the period in which theunlawful conduct takes place, whichever isgreater, for violations of EPM within two yearsof designation of the Covered Platform.703

3.61. As demonstrated in the table above, penalties upon enterprises in relation to118

infringements of competition law are calculated as a percentage of theenterprise’s turnover. The Committee notes that such penal provisions have:(a) a ‘floor’ baseline value, which is the starting point for penalty
computation;704 and (b) a ‘ceiling’ or the amount at which a penalty is capped.
While the baseline value is often determined through penalty/fine guidelines,
the ceiling for such penalties is statutorily capped.
3.62. For the purposes of the Draft DCB, the Committee discussed as to whether theceiling should be set in relation to the SSDE’s Indian/local turnover, or its
global turnover, or its global relevant turnover705. The Committee noted thecomplexities involved in conclusively determining the local turnover of adigital enterprise,706 and therefore a resultant preference by global competition
authorities (as demonstrated in the table above) to impose ceiling on penalties
basis global/total turnover. The Committee noted that post amendment, theCompetition Act also envisages that the calculation of ceiling on penalty bebased on ‘global turnover’.707 Therefore, the Committee concludes that the
global turnover of enterprises should be considered as the basis forcalculating the ceiling on penalties under the Draft DCB.
3.63. As regards to penalties for SSDEs that are part of a group of enterprises, theCommittee took note of emerging jurisprudence, both domestically andinternationally. Under the Competition Act, the Committee noted that Section
27 enables the CCI to impose a penalty upon all members of the group that havecontributed to a contravention.708
3.64. The Committee also observed that fines on undertakings709 which infringe
Articles 101 and 102 of the TFEU710 under the ex-post competition framework
can reach up to 10% of the worldwide turnover of the corporate group to which
the infringing company belongs in the previous business year711. The
Committee noted the similarities in the provision for imposition of fines underthe ex-ante DMA model wherein ‘undertakings’ included ‘all linked enterprises
or connected undertakings that form a group through the direct or indirect control ofan enterprise or undertaking by another’712 and fines for non-compliance ofobligations by Gatekeeper undertakings could reach up to 10% of their total
worldwide turnover in the preceding financial year713.
3.65. In addition, the Committee took note of the UK DMCC wherein failure tocomply with conduct requirements without any reasonable excuse714 canattract penalties of amounts equal to 10% of the total turnover inside andoutside the UK of the SMS entity or group that the SMS entity is part of715. The
119

Committee also noted the manner in which the systemic significance of the
SSDE should be contextualised in relation to the group to which the SSDE
belongs to. 716
3.66. In view of the above, the Committee recommends that the Draft DCB caps
the penalty at 10% of the SSDE’s ‘global turnover’, in line with theCompetition Act. The Committee notes that such a cap also harmonises thepenalty regimes across the Competition Act and the Draft DCB, and therefore
minimises avenues for forum shopping. Additionally, in cases where theSSDE is part of a group of enterprises, the Committee recommends that the‘global turnover’ cap be calculated in relation to the turnover of the entire
group of enterprises. The Committee also recommends that the CCI
determines the appropriate quantum of penalty (of up to 10% of the global
turnover) on a case-by-case basis, with due regard to the penalty guidelines
to be framed under the Draft DCB.

120

ANNEXURE I – OVERVIEW OF ACPs
The following table summarises the features of the ACPs identified in the Standing
Committee Report717 along with examples and instances of ACPs investigated by the
CCI.
S.
No.
1.

2.

3.

ACP

Explanation

Anti-steering

A form of exclusionary conduct practised by large
digital enterprises, particularly in the app store market,
which prevents consumers and business users fromshifting to third-party service-providers which may
offer cheaper alternatives with better functionality.
Such practices suppress consumer choice and prevent
app developers from communicating with users and redirecting them to better substitutes outside the app
environment.
Platform neutrality In cases where large digital enterprises also play the role
/ Self-preferencing of retailers on their own platforms, such entities mayleverage their dominant market position to favour theirown products. They may do so by manipulating thesearch function to ensure that their products are listed
at the top of the search ranking, thus drawing moreusers. Such conduct undermines platform neutrality
which warrants the fair and non-discriminatory
treatment of all business users on a digital platform. It
also creates a conflict of interest between the dual rolesof an enterprise as a platform as well as a business user.
Adjacency /There is often an overlap between digital products andBundling and tying other related hardware or software applications which
may provide added functionality. Large digitalenterprises may choose to tie or bundle their main or‘must have’ product with complementary products andoffer the same as a package to their users, thereby
limiting consumer choice and simultaneously
foreclosing competition from smaller rival firms in themarket. This enables digital enterprises to expand andconsolidate their position in adjacent markets as well.
121

S.
No.
4.

5.

6.

7.

ACP

Explanation

Data usage (use of
non-public data)

Large digital enterprises have access to vast stores ofuser data which they use to innovate and improve theirown products, thereby entrenching their position in themarket. Network effects enable them to attract moreusers and generate and accumulate more data, thus
creating a profitable feedback loop. The personal datacollected by large digital enterprises may be used forprofiling consumers and may also be sold to advertisers
seeking to curate targeted online services and products,
leading to concerns surrounding data privacy. This
creates barriers to the entry of new players in digitalmarkets which do not have access to these enormous
repositories of data, thus distorting the level playing
field for smaller digital enterprises and restricting
competition in the market.
Pricing / Deep
Large digital enterprises are more prone to employ
discounting
predatory pricing tactics which involve setting prices
below cost so that competitors can be excluded from themarket, subsequent to which they raise prices to recoup
their losses.
Exclusive tie-ups
Large digital enterprises may enter into exclusive
arrangements with business users or sellers of products
and services to not deal with other enterprises, thus
denying them market access. Exclusive agreements can
be classified into two kinds: agreements which
exclusively launch a specific product on a platform or
under which a platform provides only one particularbrand in a specific product group.718
Search and ranking Consumers use keywords on search engines, i.e. terms
preferencing
used to match advertisements with the search queries ofconsumers. Large digital enterprises may use nontransparent search algorithms and tend to exercise
control over the search rankings in order to give
preference to sponsored / their own products so as toreduce the contestability of products favoured more by
consumers. They may also allow bidding on relevant
keywords (which may even be registered trademarks)
enabling advertisers to increase their consumer reach.
122

S.
No.

ACP

8.

Restricting thirdparty applications

9.

Advertising
policies

Explanation
This leads to dilution of the brand power of products
and services originally being searched for by consumers
and compels companies to spend considerably in orderto protect their own intellectual property and outrank
competitors on search pages.
Large digital enterprises tend to prevent users fromaccessing or using third-party applications other thantheir own. They may do so by using exclusionary antisteering policies (which have been discussed above)
including curbing the installation of third-party
applications.
Large digital enterprises appear to be dominant at eachstage of the advertising technology chain, i.e. demand,
supply and exchange and their revenue models areprimarily
basedonmonetisation
throughadvertisement revenue. There appears to be increasing
market concentration, consolidation and integration
across many levels in the ad-tech supply chain which
gives the incumbent platform an unfair edge over themarket. They may require advertisers to use ‘webcrawlers’, i.e. programs used by search engines to collectand extract large amounts of consumer activity anddata, on their websites which further allows them toprovide targeted advertising. Large digital enterprises
with dominant search engines or app stores reportedly
also tend to prevent third-party app stores / apps fromadvertising on their platform citing vague and arbitrary
concerns thereby limiting their consumer reach.

123

ANNEXURE II – ORDER CONSTITUTING THE
COMMITTEE

124

125

ANNEXURE III – SUMMARY OF STAKEHOLDERSUBMISSIONS
The following table summarises the key inputs and recommendations of each of the
stakeholders who provided written submissions to the Committee719 in respect of theneed to introduce an ex-ante competition framework for digital markets720.
S.
No
.

1.

2.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law
All
India Large digital enterprises engage in In favour of exGaming
issuing arbitrary app distribution ante regulation.
Federation
policies; imposition of unfair anddiscriminatory terms on app developers
through arbitrary app review guidelines;
mandatory use of native billing system
for in-app purchases; imposition of ahigh commission fee; advertising
restrictions; and infringement ofintellectual property enabling searchengines to bid on relevant keywords.
Allianceof • Large app stores engage in bundling In favour of exDigital Indiaof products; mandatory usage of ante regulation.
Foundation
native payment systems; datahoarding and use of third-party data
to improve own products; selfpreferencing; forcing app developers
to enter into arbitrary and unilateralagreements;
infringementoftrademarks; imposition of highcommissions on revenue; antisteering
provisions
includingdisplaying warnings when a user
attempts to install an app from asource other than the official app
stores; pre-installation of apps on app
126

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law

stores; non-transparent advertising
policies; lack of interoperability; andpredatory
pricinganddeep
discounting.
• SIDIs must be permitted to contest
theirdesignation
beforetheregulatory body.
• A special wing of the CCI withrequisite
manpower
shouldadjudicate complaints brought against
digital enterprises.

3.

Amazon• Amazon is already heavily regulated Not in favour ofby the FDI Policy which mandates that ex-ante regulation.
it can only act as an online
marketplace and not as a seller, andthat it should provide fair terms to allsellers.
• Ex-ante regulation for the e-commerce
sector may be untimely and excessive
and may lead to over-regulation.
There is a risk of increased compliancecosts and regulatory overlap.
• Ex-ante regulations in the EU remain
largely untested. In Japan, broad exante laws for the e-commerce sector
are not being pursued.
• CCI should consider alternative
regulatory models such as in Japan(focusingontransparency/
reporting), Singapore (self-regulatory
127

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

model), UK (sector-specific)
Australia (service-specific).

Observations onneed for a new
digitalcompetition law
or4.

Apple India • The establishment of a DMU by the Not in favour of a
Private
CCI would address any capacity regulatory
Limitedapproach
constraints.
modelled
after• CCI should also consider opening a the DMA. In
regional office in Bengaluru in order favour of a lightregime
to get easy access to the technology touch
which promotes
ecosystem of the country.
innovation.

5.

Artha Global

favourof• Large digital enterprises engage in Inofinter alia data collection and regulation
concentration which could lead to digital markets.
risks of privacy and security breaches;leveraging of user and seller data to
tailor their own products in line with
consumer preference; and compellingusers to share information in case theywish to continue interacting with aparticular app.
• Data protection considerations areimportant to assess consumer welfare
losses. Such considerations are alsoessential to inform mergers andacquisitions in digital markets.
• Regulatory overlap while regulating
digital markets will need to be
avoided.

6.

Asia
Travel •Technology

Ex-post competition regimes have In favour of exproven ineffective at maintaining a ante regulation.
128

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Industry
Associationlevel playing field for travel
technology platforms in theircompetition
withdominant
platforms, in the digital economy.
••

The focus of a new regulation should
be to address self-preferencing
concerns, including unfair use ofdata, in online search, app stores andother relevant areas.
Transposing foreign legal principles
and obligations like the EU DigitalMarkets Act (DMA) and Digital
Services Act (DSA) should be
conducted carefully.

•

Ex-ante competition regime should betargeted at only the strategic digitalplatforms,
toavoid
unfairlyburdening platforms that are simply
big. Arbitrary metrics for scope andthresholds should be avoided and thefocus should be on evaluating criteriasuch as whether a firm acts as a vital
conduit for other firms to reachconsumers.

•

A flexible approach is needed thatenables regulators to tailor remedies
specific to individual sectors,
products and activities within thedigital economy.

•

Speedy and effective enforcement isessential in any new ex-antecompetition regime.
129

Observations onneed for a new
digitalcompetition law

S.
No
.

Name of the
Stakeholder

7.

AZB
Partners

Submissions of Stakeholders& •Observations onneed for a new
digitalcompetition law

AZB & Partners understands that the In favour of exCommittee intends to introduce ante regulation.
reformsandtheappropriate
safeguards
toensurefair,transparent, and contestable digital
ecosystems without compromisingon innovation and growth.

•

It has thus proposed a hybrid modelof Digital Competition regulation for
India.

•

Conduct stakeholder consultationand invitation of public comments on
the thresholds. Prescription of
conjunctive quantitative entry level
threshold for each Targeted Digital
Service (“TDS”). When quantitative
thresholds are met, then required
platforms can self-report.

•

For qualitative assessment, the CCI
may come up with non-exhaustive
list of factors akin to S. 19(4) of theCompetition Act that lays down
criteria for assessing the platform’s
position in the concerned service.

•

The reasons given for the hybrid
model are that it would ensure
equilibrium, qualitative assessment
ensures that the principle of audi
alteram partem, is followed and thatthe mere quantitative thresholds
would restrict scaling.
130

S.
No
.

8.

Name of the
Stakeholder

Submissions of Stakeholders•

The code of conduct for SIDIs should
address the antitrust problems of therelevant Targeted Digital Service andfulfil broader competition law goals.
The code of conduct may be
determined by being service specificor service specific and SIDI specific.

•

The enforcement of the proposed
legislation includes setting up a
monitoring agency, interim measurestaken by the CCI, penalties, and anappellate mechanism.

Bundl• The size of the Indian digital economy
Technologies
is approximately 3% of the digital
Privateeconomy in Europe. Thus, an ex-ante
Limited andregime at this stage would cause a
Swiggychilling effect on the start-up industry.
• In case two legislations are present
simultaneouslyforalldigitalbusinesses, without any distinction, it
will increase a company’s regulatory
cost without necessarily tackling anticompetitive conduct.
• Ex-ante regulations may pose a risk ofincorrect / misplaced regulation ofsmaller home-grown players which
provide digital technology-enabled
products and services. The exact same
concerns cannot be mapped across all
digital businesses and platforms inpractice. Introduction of a legislation
131

Observations onneed for a new
digitalcompetition law

Not in favour of
ex-ante regulation
exceptunder
certain conditions
as outlined.

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

regulating all players with a broad
brush has the potential to hinder
innovation in the country.
• The CCI has imposed penalties on
multiple companies in the digitalspace. With the implementation of theCompetition (Amendment) Act, 2023,
the CCI’s powers will become morerobust wherein it can settle cases or
seek commitments to promptly
dispose of more cases in the digital
sector, prior to any harm that occurs in
the market.
• The establishment of the DigitalMarkets and Data Unit by the CCI
with subject matter experts would be
effective in correcting the potentiallydistortive conduct of large enterprises.
• In case an ex-ante regime is sought tobe introduced, the Committee should:(i) identify and assess the harm thatsuch regime seeks to address; (ii)identify and assess the relevant sectors/ services that would be subject tosuch regime after conducting adetailed market study in consultation
withstakeholders;
(iii)
apply
universally applicable thresholds for
identification of SIDIs or apply
separate thresholds to each specified
sector / service; (iv) identify the exante obligations that can be imposedon each of the identified services; and132

Observations onneed for a new
digitalcompetition law

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law(v) submit its report to the MCA
which should constantly monitor the
impact of ex-ante regulations on
identified sectors / services.
• Detailed studies within different
digital markets should be conducted
to identify (on a sector-specific basis):(i) nature of the entry barriers in asector / service; (ii) whether the stateof competition is sufficient to address
the harm; (iii) whether market forces
and state of competition only favour
significant digital enterprises; and (iv)the level of dependency of business
users and end users on the relevant
digital enterprises.

9.

Centre for the •Digital Future

Ex-ante is not context-specific and Not in favour of
therefore can be counter-productive. ex-ante regulation.

•

India needs to chart its own course by
setting up a regulatory system thatworks in its best interests, and it cangain
disproportionatelybyleveraging its potential as a large
potential market and a small, but
growing digital ecosystem.

•

Large firms have unprecedented
control over data and information
flows that are proposed to be
regulated through specialised dataprotection and digital safety laws inmost jurisdictions.

133

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders•

Digitalmarkets
willbeSchumpeterian markets – digital
players will drive others as well ininnovation and competition.

•

Innovation cannot be limited to aregulatory standpoint – it has to beensured that these new ideas haveaccess to adequate capital. The
current position is targeting larger
firms based on the presumption thatthey will remain in a position to keep
making large profits.

•

Regulatory action needs to ensure
contestability in markets.

•

Ex-ante regulations would specify
undesirable actions and trigger
regulatory behaviour.

•

All platforms are not the same andshould be treated the same by
regulators. If they are treated thesame, ex-ante will impose high costson all stakeholders.

•Should leave ex-ante to sector specificregulators and have competition
policy operate as an ex-post enforcer.

•

Outcomeindependent
ex-anteregulations as broad an area of
operations as digital markets willalmost certainly spur the discovery of

134

Observations onneed for a new
digitalcompetition law

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law

another area of weak regulatory
oversight.
•

10.

India has a history of being overly
protectionist and over-regulated.

Confederation • Large digital enterprises in the e- In favour of exof All India
commerce sector provide reduced ante regulation.
Traders
commission or discounts and morefavourable terms for preferred sellers;
do not follow platform neutrality;
influence
searchrankings
forpreferred
sellers;
enter
into
arrangements with brands for
exclusive launches; launch private
labels through preferred sellers; funddeep discounts themselves; andmisuse data to gain control over themarket, create private labels, etc.
• Ex-ante regulations are essential toaddress the irreversible market harmcaused by large digital enterprises,
especially due to the lengthy and timeconsuming
natureof
CCI
investigations.
• The DMA can be used as a reference
point
for
introducing
ex-anteregulation in India.

11.

Digital News • Large digital enterprises indulge in In favour of exPublishers
non-transparent data sharing and ante regulation.
Association
revenue-sharing policies721; searchand ranking preferencing; bundlingand tying; collecting user data to
135

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law

improve their own products; allowing
bidding on keywords leading to
infringementofregisteredtrademarks; and allow crawling of
publishers’ websites by search engines
and use such data to power their own
search results.
• CCI should have a pre-factum power
for checking abuse of dominantposition by large digital enterprises
before revenue sharing agreements
are entered into with news publishers.
• A pre-facto bargaining code should be
devised to ensure a level playing field
between large digital enterprises andnews publishers such as those in
France, Australia, and Canada.
• CCI should be established as a
statutory body with powers akin to
the Central Information Commission
and Election Commission of India.
• The Director General, CCI should be
appointed independently with a fixed
tenure and enhanced powers to
impose penalties.

12.

Esya Centre• ACPs identified include exclusion of In favour of excompetitor channels in base packs by ante regulation.
distribution
platform
operators
vertically integrated with telecom
service providers; arbitrary site-

136

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law

blocking; and unfair practices in the ecommerce sector.
• Ex-ante rules should be applied
uniformly to all sectors including to
the e-commerce sector which isregulated by the FDI Policy.
• Mandating interoperability should be
refrained from to lower barriers toentry in digital markets since it does
not incentivise switching and leads to
network vulnerabilities.
• Video-on-demand
andgamingindustries should be exempted fromthe ambit of ex-ante regulation.

13.

Federation of • OTAs and food service aggregators In favour of exHotel&indulge in inter alia cartelisation; ante regulation.
Restaurant
predatory
pricinganddeep
Associations
discounting; charging exorbitantof India
commissions
fromrestaurant
partners; non-transparent bookings;
imposition of arbitrary and unfair
terms in contracts; collection and useof consumer data; and lack oftransparency in search algorithms.
• A regulator like an ombudsman
should be established to regulate
digital markets and enforce ex-ante
regulations.

137

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law• SIDIs should be identified based on
their revenue, market capitalisationand number of active users.
• A DMU should be established.
• Similar to the ex-ante regime proposedin the EU and adopted in Japan,
companies may self-assess whether
they meet the qualitative andquantitative thresholds applicable togatekeeper entities and notify thecompetent regulatory authority.

14.

Flipkart• The existing ex-post regime in India is Not in favour ofwell-equipped to effectively regulate ex-ante regulation.
digital markets in India. A one-sizefits-all approach similar to the DMA
model would be unsuitable for
effective regulation of digital markets
since it remains untested.
• Subject-matter experts
appointed at the CCI.

shouldbe• A facility for obtaining principlebased guidance on the application ofexisting law for conducting selfassessment as well as for obtaining
informal guidance / clarifications
should be provided.
• The existing regime should work inharmony with other specialised
legislations governing distinct aspects
of digital markets such as data
138

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law

protection, privacy, interoperability,
etc.

15.

Google•There has been no global consensus
on a regulatory approach to govern
digital markets. Most regimes areuntested and provide for rigid rules
adversely
impactingproduct
innovation and benefits to consumers
or
are
based
on
extensiveengagementwithindustry
participants.

•

Changes to rules should be pursuant
to stakeholder consultation; there
should not be unfettered discretion tochange or add to such rules.

•

Any new regulation should be
implemented in a phased mannerthat considers regulatory overlaps.

•

SIDI designations should be applied
to identified activities in specificmarkets.

•

SIDI
designations
shouldbusiness-model agnostic.

•

•

be

Not in favour of
ex-ante regulation
exceptunder
certainconditions.
The new regime
should promotecompetition andinnovation;
provideforevidence-based
justifications (e.g.,
pro-competitive)
for conduct under
scrutiny; provide
for separation of
powers between
rule-making
bodies in chargeof designation of
SIDIs and bodies
inchargeofenforcement, etc.

Any new ex-ante
SIDI designations should be based on regulation ought
only to apply toclear criteria.
firms in markets
SIDI assessments should be reviewed where they arefound to haveperiodically.
‘SIDI’ power.

139

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law

16.

India Cellular • India’s digital enterprises are not as Not in favour ofandmature as EU’s and an identical ex-ante regulation.
Electronics
system as that of the EU will not work
Association
for an industry like India’s. It is
important for India to focus onpromotion of investment, economic
growth, and innovation.
• DMA-related regulation will have adebilitating effect on innovation andtechnological advancement since it
favours static competition overdynamic competition, and fairness
over disruption.
• The implementation of a DMA-likeregime would also discourage
growing companies which may not beable to cope with the increased
compliance burden.

17.

Indian• The current competition regime
Councilforintervenes only when harm is done
Research on
which is too late in the case of digital
International
markets. The current fines andEconomic
remedies are not enough of a
Relationsdeterrent. Constraints faced bycompetition authorities include: (i)difficulty in establishing dominanceand anti-competitive effects using
traditional theories of harm; (ii)difficulty in designing remedies for
rapidly changing markets; and (iii)capacity constraints.

140

In favour of exante
regulation
but only if it isintroduced withcaution.
There
must be tailoredgatekeeping andflexibility
forsector-specificbusiness models.

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law• The definition of ‘relevant market’ isalso important to be demarcated on acase-to-case basis.

18.

Internet and • The current regulatory framework Not in favour ofMobileallows the CCI to act swiftly when ex-ante regulation.
Association ofneeded without excessive regulationIndia
in the digital sector. Having two
legislations applicable parallelly to all
digital businesses would increase
regulatory costs for companies. Rigid
pre-emptive standards should not becreated under the law as it may
negatively
affectinvestments,
innovation, consumer choice, andwelfare.
• Additional regulation should not be
considered since there is no empiricalevidence suggesting any failure in theexisting regulatory framework. In
order to avoid false positives and typeI errors, it is crucial to conductdetailed market studies to identify
and analyse issues and concerns that
require regulatory intervention andresolution.
• The EU has recently implemented
new comprehensive regulations forcompetition in digital markets.
However, it is crucial to recognise thatIndia's market is distinct from that ofEurope's and directly adopting rules
from other markets, such as Europe,
without considering the local nexus,
141

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law

could potentially damage local
markets, hinder innovation, impedeeconomic
growth,andharm
consumers in India.
• After studying recent developments
regarding an ex-ante regime in nations
like EU, UK, USA, Singapore, Japan,
Australia, and Korea, it can be inferredthat there is currently no global
consensus among countries or experts
regarding which ex-ante approach toadopt or whether ex-ante regulation iseven necessary.
• Broader public consultations andsurveys should be carried out before
makingany
recommendations.
Additionally, there should be a briefround of public consultation on thedraft recommendations, following thestandard practice of other government
policy proposals.

19.

Meta
(Facebook)• The proposals of the Committee may
cut across the regulatory sphere ofextant legislation and run the risk ofinhibiting the growth and innovationof services and products in India due
to regulatory inconsistency.
• There is no evidence of enforcement
gaps in the extant framework. CCI isan effective regulator of competition
issues in digital markets. The length of
CCI proceedings is a procedural issue.
142

Not presently infavour of ex-ante
regulation.
A comprehensive
impactassessment of the
Indian economy
and clarity about
the policy goals
that
such
legislation
is

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law
slated to achieve• There has been no global consensus on is necessary.
whether ex-ante regulations areneeded, and there has been no Meta believes inandconvergence towards one particular observing
advancing further
model.
research before• There is a need to identify specific rushing to adopt
harms as has been done in other any variation ofjurisdictions such as the UK, Japan, the DMA (or anyof the other exAustralia and South Korea.
ante frameworks
being consideredpresently).

20.

MakeMyTrip• The criteria enforced in otherjurisdictions necessitating ex-ante
regulation cannot be applied to Indian
markets due to different economic andmarket conditions.
• Any
proposedthresholdsfordesignation of gatekeepers must be at
EU levels or higher to protect
domestic players who need tocompete with global leaders in the
Indian market.

In favour of exante
regulation
only to the extent
that they are
made applicable
to select large
horizontal
platforms
thathave
createdeconomy-wide
ecosystems.
Not in favour of
ex-ante regulationof the online
travel market.

21.

Newspaper
A digital competition law is required to In favour of a new
Association of prevent the spread of inaccurate digitalIndia
information in order to increase competition law.
143

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law

consumer reach across all digital media.

22.

National• Malpractices by dominant food In favour of exRestaurant
serviceaggregators
include ante regulation.
Association ofpreferential treatment to a few sellers
India
by providing them with better
commission rates, targeted platformfunded discounts and minimum
businessguarantees;
lackoftransparency in search rankings; deep
discounting; unfair contract terms;
exclusivity
agreements
withrestaurants for exclusive listing on theplatform; price parity; data masking
which is used to understand andpredict market and consumer
preferences without such data being
shared with the restaurant partners;
and exorbitant commissions, nontransparent listing practices andpotentially rigged search algorithms
for non-preferred sellers.
• Appropriate legislation to regulate
such enterprises and timely checks are
crucial due to time-consuming
investigations. Further, certain unfair
practices cannot be remedied bymarket regulators alone.
• Reference to DMA can be made.

23.

NASSCOM•

Designation of an entity for ex-ante In favour of exobligations should be based on a ante regulation.
combination of both quantitative andqualitative factors. They should
144

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law

neither be mutually exclusive nor
have an overriding effect.

24.

Oyo

•

Any ex-ante obligation imposed on adesignated entity should have
objective justification provided in the
primary law.

•

Ex-ante framework should focus oncompetition harms and not create
overlaps by imposing privacy/dataprotection related obligations.

•Ex-ante must provide for a
consultative mechanism where an
entity after getting designated canapproach the CCI to clarify how acertain type of conduct falls within
the purview of a given exemption.

•

The ex-ante framework must carry astatutory obligation for the CCI to
conduct market studies before
identifying a Core Digital Service or
specific conduct/obligation withrespect to the identified digital
service.

•

Digital technology is evolving, and it Not in favour ofis important that competition ex-ante regulation.
remains fair and transparent.
Regulations
shouldfocus
onpromoting competition, protecting
consumer rights, and ensuring fairand equitable access to digital
services.
145

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders•

A level playing field should becreated basis the nature of services
holistically rather than an offlineonline segment.

•

Regulation of technology markets
should not be a one-size fits all
approach. Broad based legislation
creating uniform categories &imposing uniform obligations may
have unintended consequences likeactually removing incentives toinnovate, create more efficient
products or user experiences. It canalso hinder India’s growing techsector/adversely affect investments
in homegrown tech companies andmake our economy less competitive
globally.

•

At present, CCI has institutional
expertise in regulating competition
and the latest Competition Bill, 2023
addresses the issues raised by growthof digital economies. The CCI is also
ramping capabilities on digitalmarkets through market studies.

•

There is no evidence of an
enforcement gap or market failurethat requires an ex-ante intervention.

•

Rule of reason approach allows
consideration of India-specific factors

146

Observations onneed for a new
digitalcompetition law

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law

and dynamic nature of competition in
the technology sphere.
•

25.

Paytm

This allows market to correct itself,
rather than imposing a top-down
approach that limits potential
growth.

• The dominance of large digitalenterprises is visible in the bundlingof services which create asymmetricpricing and binds developers into
taking all services from app store
operators; anti-steering provisions
which restrict choices for developers;
control of app review process andsearch algorithms that creates anavenue for stores to self-preference
their own apps at the expense ofothers; and high commissions which
affect business viability and increase
costs for customers.
• There is a need for a digital markets
regulator. The regulator must seek
submission of an annual compliancereport from large digital enterprises.
• Any foreign large digital enterprisedelivering services in India for at least
the last 3 years in the digital services
sector needs to be registered in India.
• A mandatory grievance redressal
office to be established.

147

In favour of exante regulation aslong as only large
digital enterprises
who
have
a
critical mass (forinstance, a certain
specified revenue
and a certain
number of users)
are subject to theregulations.

S.
No
.

Name of the
Stakeholder

26.

Twitter

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law• In order to implement an ex-ante In favour of exregulatory framework, regulatory ante regulation.
institutions need to be staffed byskilled academics who are trained intracking global / local technologicaldevelopments, and are able toreasonably
contextualise
thesedevelopments
andpotential
applications in the Indian market.
• The definition of ‘SIDIs’ needs to becarefully considered.
• Data collection by the SIDIs needs tobe as per norms mandated in the
proposed DPDP Bill, 2022.

27.

Uber

• Ex-ante regulatory interventions may Not in favour of
discourage innovation and restrict ex-ante regulation.
existing players from investing in
improving
quality,efficiency,
processes, etc. It might also change
market dynamics / incentives suchthat it reduces consumer benefit.
• The existing framework is alreadysufficient and it would not be apt tohave to introduce a fresh legislation toregulate digital markets.
• The CCI must be further empowered
to track changing market dynamics
across digital markets.

28.

USIBC

•

Ex-ante regulation targeting ‘big tech’ Not in favour ofis too broad. Such a regulation must ex-ante regulation.
148

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

not target companies but seek toregulate conduct unique to specificappropriately defined markets.
•

Incentivising competition will notserve as an ex-ante approach that only
captures the largest players in themarket but not all competitors. It
might create a disincentive for otherplatforms to compete unless they
offer the same benefits as those thatare regulated.

•

There will be an adverse impact on
existing players in the market that
includes both Indian and foreigncompanies as they will be restrictedin the improvement and evolution of
their products.

•

There will also be an adverse impact
on small digital market players inIndia.

•

Selective overly aggressive ex-ante
regulations could reduce competition
for Indian consumers. The additional
legislative burden would lead to
uncertainty for digital companies
globally and India may not remain
the ‘first market’.

•

Very few legal systems have adopted
aggressive ex-ante laws globally andmarking a paradigm shift this early149

Observations onneed for a new
digitalcompetition law

S.
No
.

Name of the
Stakeholder

Submissions of Stakeholders

Observations onneed for a new
digitalcompetition law

may have a detrimental impact onease of doing business in India.

29.

Zomato• Ex-ante regulation remains untested in
global markets. Unlike the matureeconomies of the EU, the Indian
economy is developing and needs
nimble regulation. India is a growing
economy with a diverse demographic
divide and blanket legislations
modelled after the DMA may impact
the Digital India Movement.
• The existing competition framework
in India appears to be sufficient. CCI
has wide-ranging powers and isalready addressing substantive issues
concerning digital markets. It has thepowers to issue interim orders tocorrect any egregious practices.

Not in favour of
ex-ante regulation.
However, if it issoughttobeintroduced,
itshould be tailoredto the Indian
ecosystem,
shouldbeconducive to thegrowthofstartups,
andshould not stifle
innovation and /orconsumerinterest.

It should operateconsonance• A new legislation along with existing inothersectoral regulations could potentially withresult in over-regulation for Indian proposed
regulatory laws instartups.
the digital market
space as well as
existing
laws.
SIDI thresholds
should not impact
smaller players.

150

ANNEXURE IV
DRAFT DIGITAL COMPETITION BILL, 2024

An Act, to identify systemically significant digital enterprises and their associate digitalenterprises, and to regulate their practices in the provision of core digital services, keeping inview the principles of contestability, fairness and transparency, with an objective to foster
innovation, promote competition, protect the interest of users of such services in India, and formatters connected herewith and incidental thereto.
CHAPTER IPRELIMINARY

1.

Short title, extent and commencement(1) This Act may be called the Digital Competition Act, [2024].
(2) It extends to the whole of India, and save as otherwise provided extends toacts outside India having an effect on obligations and conduct requirements
under this Act.
(3) It shall come into force on such date as the Central Government may, by
notification in the Official Gazette, appoint.
(4) The Central Government may appoint different dates for different
provisions of this Act and any reference in any such provision to thecommencement of this Act shall be construed as a reference to the coming
into force of that provision.

2.

Definitions
In this Act, unless the context otherwise requires:(1)“Act” means the Digital Competition Act, [2024];(2)“Associate digital enterprise” means an enterprise designated as such
under sub-section (9) of Section 4;

151

(3)

“Business user” means any natural or legal person supplying or providing
goods or services, including through Core Digital Services;(4)“Commission” means the Competition Commission of India establishedunder sub-section (1) of Section 7 of the Competition Act;

(5)“Competition Act” means the Competition Act, 2002 (12 of 2003) as
amended from time to time;(6)“Core Digital Service” means any service specified in Schedule I of the Act;

(7)

“Director General” shall have the same meaning assigned to it under theCompetition Act;

(8)“End user” means any natural or legal person using Core Digital Services
other than as a business user;(9)“Enterprise” means a person or department of the Government, including
units, divisions, subsidiaries, who or which is, or has been, engaged in any
economic activity, relating to the production, storage, supply, distribution,acquisition or control of articles or goods, or the provision of services, ofany kind, or in investment, or in the business of acquiring, holding,underwriting or dealing with shares, debentures or other securities of any
other body corporate, either directly or through one or more of its units ordivisions or subsidiaries, but does not include any activity of theGovernment relatable to the sovereign functions of the Government
including all activities carried on by the departments of the Central
Government dealing with atomic energy, currency, defence and space;
Explanation.— For the purposes of this clause, —(a) “activity” includes profession or occupation;(b) “article” includes a new article and “service” includes a new service;(c) “unit” or “division”, in relation to an enterprise, includes(i) a plant or factory established for the production, storage, supply,
distribution, acquisition or control of any article or goods;(ii) any branch or office established for the provision of any
service;(iii) any place of business of the enterprise.

152

(10) “Group” shall have the same meaning as assigned to it under theCompetition Act;
(11) “Person” shall have the same meaning as assigned to it under theCompetition Act;
(12) “Prescribed” means prescribed by rules made under this Act;
(13) “Regulations” means the regulations made by the Commission under
Section 49;(14) “Related party” shall have the same meaning as assigned to it in Section
2(76) of the Companies Act, 2013 (18 of 2013);(15) “Service” means service of any description which is or may be madeavailable to actual or potential users and includes the provision of services
in connection with business of any industrial or commercial matters suchas banking, communication, education, financing, insurance, chit funds,
real estate, transport, storage, material treatment, processing, supply ofelectrical or other energy, boarding, lodging, entertainment, amusement,
construction, repair, conveying of news or information, and advertising, fora consideration or otherwise;(16) “Specified” means specified by regulations made under this Act;
(17) “Systemically Significant Digital Enterprise” means an enterprise
designated as such by the Commission under Section 4 of the Act;
(18) “Trade” means any trade, business, industry, profession or occupation
relating to the production, supply, distribution, storage or control of goods
and includes the provision of any services; and(19) “Users” includes business users and end users.
(20) Any term not defined specifically in this Act shall have the same meaning
as assigned to it in the Competition Act.
CHAPTER II
DESIGNATION OF A SYSTEMICALLY SIGNIFICANT DIGITAL ENTERPRISE
153

3.

Systemically Significant Digital Enterprises(1)

An enterprise may be designated as a Systemically Significant DigitalEnterprise in accordance with Section 4, in respect of a Core Digital Service
if it has a significant presence in the provision of such Core Digital Service
in India.

(2)

An enterprise shall be deemed to be a Systemically Significant DigitalEnterprise in respect of a Core Digital Service, if:(a) it meets any of the following financial thresholds in each of theimmediately preceding three financial years:(i) turnover in India of not less than INR 4000 crore; OR(ii) global turnover of not less than USD 30 billion; OR(iii) gross merchandise value in India of not less than INR 16000 crore;OR(iv) global market capitalisation of not less than USD 75 billion, or its
equivalent fair value of not less than USD 75 billion calculated insuch manner as may be prescribed;AND(b) it meets any of the following user thresholds in each of theimmediately preceding three financial years in India:(i)the core digital service provided by the enterprise has at least
one crore end users; OR(ii)
the core digital service provided by the enterprise has at least
ten thousand business users.
Provided that if the enterprise does not maintain or fails to furnish data
mentioned in clause (a) or (b), it shall be deemed to be a SystemicallySignificant Digital Enterprise if it meets any of the thresholds stipulated inclause (a) or (b).

(3)

The Commission may designate an enterprise as a Systemically Significant
Digital Enterprise in respect of a Core Digital Service, even if it does notmeet the criteria set out under sub-section (2), if the Commission is of theopinion that such enterprise has significant presence in respect of such aCore Digital Service, based on an assessment of information available withit, and based on any or all of the following factors:(i) volume of commerce of the enterprise;(ii) size and resources of the enterprise;154

(iii) number of business users or end users of the enterprise;(iv) economic power of the enterprise;(v) integration or inter-linkages of the enterprise with regard to themultiple sides of market;(vi) dependence of end users or business users on the enterprise;(vii) monopoly position whether acquired as a result of any statute or by
virtue of being a Government company or a public sector undertaking
or otherwise;(viii) barriers to entry or expansion including regulatory barriers, financial
risk, high cost of entry, marketing costs, technical entry barriers,
barriers related to data leveraging, economies of scale and scope, highcost of substitutable goods or services for end users or business users;(ix) extent of business user or end user lock in, including switching costs
and behavioural bias impacting their ability to switch or multi-home;(x) network effects and data driven advantages;(xi) scale and scope of the activities of the enterprise;(xii) countervailing buying power;(xiii) structural business or service characteristics;(xiv) social obligations and social costs;(xv) market structure and size of the market; and(xvi) any other factor which the Commission may consider relevant for theassessment.
(4)

The Central Government shall, every three years from the date ofcommencement of this Act and in consultation with the Commission, by
notification, enhance or reduce, or keep at the same level, the thresholds
stipulated in sub-section (2).
Explanation.— For the purposes of this section,(1) “Turnover in India” includes revenue derived in India from the sale of
all goods and provision of all services, whether digital or otherwise, by theenterprise;(2) “Global turnover” includes revenue derived from the sale of all goods
and provision of all services, whether digital or otherwise, by the enterprise;(3) “Gross merchandise value” means the total value of goods or services,or both, sold by, or through the intermediation of, the enterprise throughall the Core Digital Services it provides;
155

(4) “Global market capitalisation” means market capitalisation of theenterprise calculated at the global level;(5) The values of “turnover in India”, “global turnover”, “grossmerchandise value” and “global market capitalisation” shall be calculated
in the manner as may be specified;(6) “End Users” and “Business Users” for each Core Digital Service shall beidentified and calculated in the manner as may be specified;(7) Where the enterprise is a part of a group, then the values of “turnoverin India”, “global turnover”, “gross merchandise value”, “global market
capitalisation”, “number of end users” and “number of business users”
shall be computed with reference to the entire group.

4.

Self-reporting obligation and designation(1)

An enterprise shall, within a period of ninety days of meeting thethresholds under sub-section (2) of Section 3, notify the Commission in theform as may be specified, that it fulfills the criteria to qualify as a
Systemically Significant Digital Enterprise in respect of one or more of its
Core Digital Services.
Provided that the enterprise shall also notify the Commission of such otherenterprises within the group the enterprise belongs to, which are directly
or indirectly involved in provision of the Core Digital Service, as Associate
Digital Enterprises.

(2)

Upon receipt of the information under sub-section (1), the Commission
may pass an order designating the enterprise as a Systemically Significant
Digital Enterprise and identifying its Core Digital Services, thereby
subjecting the enterprise to the obligations under Chapter III and the rules
and regulations framed thereunder.

(3)

The Commission may, at any time after the expiry of ninety days from thedate of Section 3 coming into force, and in a manner as may be specified,direct an enterprise to furnish such information as it deems necessary toascertain whether the said enterprise fulfills the criteria set out under subsection (2) or (3) of Section 3.
156

(4)

Upon consideration of the information received, if any, under sub-section(3) or any other information in its possession, if the Commission is of theview that the enterprise meets the thresholds set out under sub-section (2)of Section 3, the Commission may, after providing an opportunity of being
heard to the enterprise:(a)(b)

pass an order designating the enterprise as a Systemically Significant
Digital Enterprise in accordance with sub-section (2); anddirect the enterprise to show cause as to why a penalty may not be
imposed under sub-section (4) of Section 28.

(5)Upon consideration of the information received under sub-section (3) andany other information in its possession, if the Commission is of the viewthat the enterprise meets the factors set out under sub-section (3) of Section
3, the Commission shall issue a show cause notice to the enterprise callingupon it to provide reasons as to why it should not be designated as a
Systemically Significant Digital Enterprise.

(6)

Upon consideration of the response received pursuant to the show cause
notice issued under sub-section (5), the Commission after giving an
opportunity of being heard to the enterprise shall pass an order either:
(a)

(b)

(7)

designating the enterprise as a Systemically Significant DigitalEnterprise, if in the opinion of the Commission, the enterprise hassignificant presence in respect of a Core Digital Service in accordancewith sub-section (3) of Section 3; orclosing the proceedings if, in the opinion of the Commission, theenterprise does not have significant presence in respect of a Core
Digital Service in accordance with sub-section (3) of Section 3.

If an enterprise fails to comply with the Commission’s direction under subsection (3), or provides incomplete or incorrect information in response tothat direction, the Commission may, after giving an opportunity of being
heard to the enterprise and based on the information in its possession, passan order designating it as a Systemically Significant Digital Enterprise, if itmeets any of the thresholds under sub-section (2) of Section (3) or based on
any factors stipulated under sub-section (3) of Section 3.

157

5.

6.

(8)

An enterprise shall be designated as a Systemically Significant DigitalEnterprise for a period of three years.

(9)

Where an enterprise has been designated as a Systemically Significant
Digital Enterprise or the Commission is considering whether to designate
an enterprise as a Systemically Significant Digital Enterprise, and suchenterprise is a part of a group, and one or more other enterprises withinsuch group are directly or indirectly involved in the provision of the Core
Digital Service in India, the Commission may, after giving an opportunityof being heard to such other enterprises, pass an order designating them as
Associate Digital Enterprises, and such designation as Associate DigitalEnterprise shall continue for the period of designation of the enterprise as
Systemically Significant Digital Enterprise.

Anti-circumvention from designation(1)

An enterprise shall not directly or indirectly segment, divide, subdivide,fragment or split services through contractual, commercial, technical or any
other means in order to circumvent the thresholds stipulated under clause(a) or clause (b) of sub-section (2) of Section 3.

(2)

The Commission may, at any time, direct an enterprise to furnish any
information that the Commission deems necessary, to determine whether
the enterprise has contravened sub-section (1).

(3)

Without prejudice to the penalty which may be imposed under sub-section(2) of Section 28, if the Commission is of the opinion that an enterprise may
have contravened sub-section (1), the Commission may pass an order
designating the enterprise as a Systemically Significant Digital Enterprise.

Revocation or re-designation(1)

The Systemically Significant Digital Enterprise may, any time during thelast six months before the expiry of the period of designation under Section
4 or re-designation under sub-section (5), apply to the Commission in theform as may be specified, that it no longer meets the thresholds to be
designated as a Systemically Significant Digital Enterprise, for one or moreCore Digital Services, as specified in sub-section (2) of Section 3 or that it
no longer needs to be designated as a Systemically Significant DigitalEnterprise under sub-section (3) of Section 3.
158

(2)

At any time after one year of being designated or re-designated, theSystemically Significant Digital Enterprise may request the Commission, insuch form as maybe specified, to revoke the enterprise’s designation as a
Systemically Significant Digital Enterprise in respect of all or any Core
Digital Services if there has been a significant change in market dynamics.

(3)

The Commission shall, within ninety days of receipt of the application
under sub-section (1) or (2), pass an order:(a)(b)

revoking the enterprise’s designation as a Systemically Significant
Digital Enterprise in respect of all or any Core Digital Services; ordismissing the application.

Provided that such an enterprise shall continue as a SystemicallySignificant Digital Enterprise till the time of passing of the order under thissub-section;
Provided further that the time taken by such an enterprise to reply to theinformation sought by the Commission for the purposes of this sub-section
shall be excluded from the computation of ninety days as mentioned above.
(4)

The Commission shall provide an opportunity of being heard to the
Systemically Significant Digital Enterprise prior to passing an order undersub-section (3).

(5)

On the date of expiry of the designation or re-designation of a SystemicallySignificant Digital Enterprise it shall be deemed to have been re-designatedas a Systemically Significant Digital Enterprise for a further period of three
years, if no order has been passed under clause (a) of sub-section (3)revoking its designation as Systemically Significant Digital Enterprise.

CHAPTER III
OBLIGATIONS ON SYSTEMICALLY SIGNIFICANT DIGITALENTERPRISES AND THEIR ASSOCIATE DIGITAL ENTERPRISES

7.

Requirement for Systemically Significant Digital Enterprises and their
Associate Digital Enterprises to comply with obligations
159

(1)

Upon designation as a Systemically Significant Digital Enterprise, theenterprise shall comply with the obligations in this Chapter and the rules
and regulations framed thereunder with respect to the Core Digital
Services identified in the Commission’s order under Section 4.

(2)

The Associate Digital Enterprises shall comply with all the obligations that
the Systemically Significant Digital Enterprise is required to comply with,and non-compliance with such obligations shall be subject to the same
penalties that may be imposed on the Systemically Significant DigitalEnterprise.

(3)

The Commission shall specify, by regulations, separate conduct
requirements for each Core Digital Service in relation to the applicableobligations set out in this Chapter.
Provided that the Commission may, within each set of regulations
pertaining to a Core Digital Service, subject Systemically Significant DigitalEnterprises providing such a Core Digital Service to differential obligations
based on the nature of the market, the number of users in India, and suchother factors that the Commission may deem fit.
Provided further that the Commission may subject an Associate DigitalEnterprise to differential obligations than those applicable on the
Systemically Significant Digital Enterprise in such manner as may be
specified.
Explanation.— For the purposes of this sub-section, the term “conduct
requirements” includes the manner of complying with such requirements
and the timelines associated with such compliance.

(4)

A Systemically Significant Digital Enterprise and its Associate DigitalEnterprises, if any, that complies with the regulations for its identified Core
Digital Service shall be deemed to have complied with the obligations
under this Chapter.

(5)

The Commission may, while framing regulations, subject the conduct
requirements to one or more of the following factors which may impede
the Systemically Significant Digital Enterprise’s and its Associate DigitalEnterprise’s compliance with such conduct requirements:

160

(a)
(b)
(c)
(d)
(e)
(f)

economic viability of operations;prevention of fraud;cybersecurity;
prevention of unlawful infringement of pre-existing intellectual
property rights;
requirement of any other law in force; andsuch other factors as may be prescribed.

Explanation.— For these purposes of this sub-section, the term“cybersecurity” will have the same meaning as assigned to it under the
Information Technology Act, 2000 (21 of 2000).

8.

9.

10.

Anti-circumvention from obligations(1)

A Systemically Significant Digital Enterprise shall not engage in any
behaviour that undermines effective compliance with the obligations under
this Chapter and the rules and regulations framed hereunder, regardless ofwhether that behaviour is of a contractual, commercial or technical nature,
or of any other nature, or consists in the use of behavioural techniques orinterface design.

(2)

The Systemically Significant Digital Enterprise shall not directly or
indirectly prevent or restrict business users or end users from raising any
issue of non-compliance with the Systemically Significant DigitalEnterprise’s obligations under this Act.

Reporting and Compliance(1)

A Systemically Significant Digital Enterprise shall establish transparent
and effective complaint handling and compliance mechanisms as may be
specified.

(2)

A Systemically Significant Digital Enterprise shall report to theCommission on the measures taken to comply with the obligations in
Chapter III and the rules and regulations framed hereunder in such mannerand form, and after such period(s) of time as may be specified.

Fair and Transparent Dealing161

A Systemically Significant Digital Enterprise shall operate in a fair, nondiscriminatory, and transparent manner with end users and business users.

11.

Self-preferencing
A Systemically Significant Digital Enterprise shall not, directly or indirectly,
favour its own products, services, or lines of business, or those of:
(a)
(b)

12.

related parties; orthird-parties with whom the Systemically Significant Digital Enterprise hasarrangements for the manufacture and sale of products or provision ofservices over those offered by third party business users on the Core Digital
Service, in any manner.

Data usage(1)

A Systemically Significant Digital Enterprise shall not, directly or
indirectly, use or rely on non-public data of business users operating on its
Core Digital Service to compete with such business users on the identified
Core Digital Service of the Systemically Significant Digital Enterprise.
Explanation.— For the purposes of this sub-section, “non-public data” shall
include any aggregated and non-aggregated data generated by business
users that can be collected through the commercial activities of business
users or their end users, on the identified Core Digital Service of the
Systemically Significant Digital Enterprise.

(2)

A Systemically Significant Digital Enterprise shall not, without the consent
of the end users or business users:(a)(b)

intermix or cross use the personal data of end users or business users
collected from different services including its Core Digital Service; or
permit usage of such data by any third party.

Explanation.— For the purposes of this sub-section, “consent”:(1) For end users, shall have the same meaning as assigned to it in the
Digital Personal Data Protection Act, 2023 (22 of 2023);(2) For business users, shall have the same meaning as may be specified.
162

(3)

13.

A Systemically Significant Digital Enterprise shall allow business users andend users of its Core Digital Service to easily port their data, in a format
and manner as may be specified.

Restricting third-party applications
The Systemically Significant Digital Enterprise shall:
(a)

(b)

14.

not restrict or impede the ability of end users and business users to
download, install, operate or use third-party applications or other softwareon its Core Digital Services; andallow end users and business users to choose, set and change default
settings.

Anti-steering
A Systemically Significant Digital Enterprise shall not restrict business users
from, directly or indirectly, communicating with or promoting offers to their end
users, or directing their end users to their own or third party services, unlesssuch restrictions are integral to the provision of the Core Digital Service of the
Systemically Significant Digital Enterprise.
Explanation.— For the purpose of this section, the Commission may specify, byregulations, the nature of restrictions that may be considered “integral” to theprovision of a Core Digital Service.

15.

Tying and bundling
A Systemically Significant Digital Enterprise shall not require or incentivise
business users or end users of the identified Core Digital Service to use one ormore of the Systemically Significant Digital Enterprise’s other products orservices, or those of:(a)(b)

related parties; orthird parties with whom the Systemically Significant Digital Enterprise hasarrangements for the manufacture and sale of products or provision ofservicesalongside the use of the identified Core Digital Service, unless the use of suchproducts or services is integral to the provision of the Core Digital Service.
163

Explanation.— For the purpose of this section, the Commission may specify, byregulations, the nature of products or services that may be considered “integral”
to the provision of a Core Digital Service.

CHAPTER IV
POWER OF THE COMMISSION TO CONDUCT AN INQUIRY

16.

Power of the Commission to inquire into non-compliance of obligations by
Systemically Significant Digital Enterprises and Associate Digital Enterprises(1)

The Commission, if:(a)(b)

either on its own knowledge; oron receipt of an information in such manner and accompanied bysuch fee as may be specified from any person; or(c) through a reference made to it by the Central Government or a State
Government or a statutory authority
is of the opinion that there exists a prima facie case, it shall direct the Director
General to conduct an investigation for the purpose of examining whether
a Systemically Significant Digital Enterprise or an Associate DigitalEnterprise is in breach of the obligations in Chapter III or the regulations
framed thereunder.
Provided that if the subject matter of an information received is, in theopinion of the Commission, substantially the same as or has been coveredby any previous information received, then the new information may beclubbed with the previous information.
(2)

Where on receipt of a reference from the Central Government or a State
Government or a statutory authority or information received under subsection (1), the Commission is of the opinion that there exists no prima faciecase, it shall close the matter forthwith and pass such orders as it deems fit
and send a copy of its order to the Central Government or the State
Government or the statutory authority or the parties concerned, as the casemay be.

164

(3)The Commission may not inquire into conduct if the same or substantiallythe same facts and issues raised in the information or reference from theCentral Government or a State Government or a statutory authority,
received under this Section has already been decided by the Commissionin its previous order.

(4)

The Director General shall, on receipt of direction under sub-section (1),submit a report on his findings within such period as may be specified by
the Commission.

(5)

If, after consideration of the report of the Director General referred to in
sub-section (4), the Commission is of the opinion that further investigationis required, it may direct the Director General to investigate further into thematter.

(6)

The Director General shall, on receipt of direction under sub-section (5),investigate the matter and submit a supplementary report on his findings
within such period as may be specified by the Commission.

(7)

The Commission may forward a copy of the report referred to in subsections (4) and (6) to the parties concerned.

(8)

In case the investigation is caused to be made based on reference received
from the Central Government or the State Government or the statutory
authority, the Commission shall forward a copy of the report referred to in
sub-sections (4) and (6) to the Central Government or the State Governmentor the statutory authority, as the case may be.

(9)

If the report of the Director General referred to in sub-sections (4) and (6)recommends that there is no contravention of the provisions of this Act,
the Commission shall invite objections or suggestions from the Central
Government or the State Government or the statutory authority or theparties concerned, as the case may be, on such report of the Director
General.

(10) If, after consideration of the objections and suggestions referred to in
sub- section (9), if any, the Commission agrees with the recommendationof the Director General, it shall close the matter forthwith and pass suchorders as it deems fit and communicate its order to the Central

165

Government or the State Government or the statutory authority or theparties concerned, as the case may be.
(11) If, after consideration of the objections or suggestions referred to in sub
section (9), if any, the Commission is of the opinion that further
investigation is called for, it may direct further investigation in thematter by the Director General or cause further inquiry to be made by inthe matter or itself proceed with further inquiry in the matter inaccordance with the provisions of this Act.
(12) If the report of the Director General referred to in sub-sections (4) and (6)recommends that there is contravention of any of the provisions of this Act,and the Commission is of the opinion that further inquiry is called for, it
shall inquire into such contravention in accordance with the provisions of
this Act.
(13) Upon completion of the investigation or inquiry under sub-section (11) or
sub-section (12), as the case may be, the Commission may pass an orderclosing the matter or pass an order under Section 17 of this Act and send a
copy of its order to the Central Government or the State Government or the
statutory authority or the parties concerned, as the case may be.
(14) Before passing an order under sub-section (13), the Commission shall issue
a show-cause notice indicating the contraventions alleged to have beencommitted and such other details as may be specified and give a reasonable
opportunity of being heard to the parties concerned.

17.

Orders of the Commission after inquiry(1)

Where after inquiry the Commission finds that a Systemically Significant
Digital Enterprise or its Associate Digital Enterprise is in contravention of
one or more of the obligations under Chapter III and the rules andregulations framed thereunder, it may pass all or any of the following
orders:(a)(b)

directing any enterprise to discontinue and not to resume suchconduct, as the case may be;
imposing such penalty, as it may deem fit under Section 28;

166

(c)

(d)

directing that the conduct of the enterprise shall stand modified to theextent and in the manner as may be specified in the order by theCommission; or
passing such other order or issue such directions as it may deem fit.

Provided that while passing orders under this Section, if the Commission
comes to a finding, that the Systemically Significant Digital Enterprise is amember of a group and that the other members of such a group are also
responsible for, or have contributed to, such a contravention, then it may
pass orders, under this Section, against such members of the group.
(2)

18.

The Systemically Significant Digital Enterprise, its Associate DigitalEnterprises, and any other party against whom an order under sub-section(1) has been passed, shall provide the Commission with the description of
the measures, in a manner as may be specified, that they have taken to
ensure compliance with the order under sub-section (1) within such time
period and in such manner as may be specified.

Settlement(1)

Any enterprise, against whom any inquiry has been initiated under subsection (1) of Section 16 for contravention of this Act, may for settlement of
the proceeding initiated for the alleged contraventions, submit anapplication in writing to the Commission in such form and upon paymentof such fee as may be specified.

(2)

An application under sub-section (1) may be submitted at any time, in amanner as may be specified, after the receipt of the report of the Director
General under sub-section (7) of Section 16 but prior to the passing of anorder under sub-section (1) of Section 17.

(3)

The Commission may, after taking into consideration the nature, gravity
and impact of the contraventions, agree to the proposal for settlement, on
payment of such amount by the applicant or on such other terms andmanner of implementation of settlement and monitoring as may be
specified.

(4)

While considering the proposal for settlement, the Commission shallprovide an opportunity to the party concerned, the Director General, or any
other party to submit their objections and suggestions, if any.
167

19.

(5)

If the Commission is of the opinion that the settlement offered under subsection (1) is not appropriate in the circumstances or if the Commission andthe party concerned do not reach an agreement on the terms of thesettlement within such time as may be specified, it shall, by order, reject thesettlement application and proceed with its inquiry under Section 16.

(6)

The procedure for conducting the settlement proceedings under thissection shall be such as may be specified.

(7)

No appeal shall lie under Section 34 against any order passed by theCommission under this section.

Commitment(1)

Any enterprise, against whom any inquiry has been initiated under subsection (1) of Section 16 for contravention of Chapter III and the rules andregulations framed thereunder, may submit an application in writing to theCommission, in such form and on payment of such fee as may be specified,offering commitments in respect of the alleged contraventions stated in theCommission's order initiating an inquiry under sub-section (1) of Section
16.

(2)

An offer for commitments under sub-section (1) may be submitted at any
time, in a manner as may be specified, after an order initiating an inquiry
under sub-section (1) of Section 16 has been passed by the Commission but
within such time prior to the receipt by the party of the report of the
Director General under sub-section (7) of Section 16.

(3)

The Commission may, after taking into consideration the nature, gravity
and impact of the alleged contraventions and effectiveness of the proposedcommitments, accept the commitments offered on such terms and themanner of implementation and monitoring as may be specified.

(4)

While considering the proposal for commitment, the Commission shallprovide an opportunity to the party concerned, the Director General, or any
other party to submit their objections and suggestions, if any.

(5)

If the Commission is of the opinion that the commitment offered under subsection (1) is not appropriate in the circumstances or if the Commission and168

the party concerned do not reach an agreement on the terms of thecommitment, it shall pass an order rejecting the commitment applicationand proceed with its inquiry under Section 16.

20.

(6)

The procedure for commitments offered under this section shall be such as
may be specified.

(7)

No appeal shall lie under Section 34 against any order passed by theCommission under this section.

Revocation of orders on settlements and commitments
If an applicant fails to comply with the order passed under Section 18 or Section
19 or it comes to the notice of the Commission that the applicant has not madefull and true disclosure or there has been a material change in the facts, the order
passed under Section 18 or Section 19, as the case may be, shall stand revoked
and withdrawn and such enterprise shall be liable to pay legal costs incurred by
the Commission which may extend to rupees one crore and the Commission may
restore or initiate the inquiry in respect of which the order under Section 18 or
Section 19 was passed.
CHAPTER V
POWERS OF THE COMMISSION AND DIRECTOR GENERAL

21.

Power of the Commission to regulate its own procedure and conduct studies(1)

In the discharge of its functions, the Commission shall be guided by theprinciples of natural justice, and subject to the other provisions of this Act
and of any rules made by the Central Government, the Commission shallhave the powers to regulate its own procedure.

(2)

The Commission shall have, for the purposes of discharging its functions
under this Act, the same powers as are vested in a Civil Court under the
Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respectof the following matters:(a)(b)

summoning and enforcing
theattendance of any person andexamining him on oath;requiring the discovery and production of documents;
169

(c)
(d)
(e)

receiving evidence on affidavit;
issuing commissions for the examination of witnesses or documents;
requisitioning, subject to the provisions of sections 123 and 124 of the
Indian Evidence Act, 1872 (1 of 1872), any public record or document
or copy of such record or document from any office.

(3)

The Commission may call upon such experts, from the fields of
economics, law, technology, regulation, accountancy, commerce,
international trade, or from any other discipline or conduct such studies
as it deems necessary to assist the Commission in the discharge of its
functions under this Act, including for specifying regulations with regard
to obligations under Section 7.

(4)

The Commission may direct any person:(a) to produce before the Director General or the Secretary or an officer
authorised by it, such books, or other documents in the custody or
under the control of such person so directed as may be specified or
described in the direction, being documents relating to any trade, theexamination of which may be required for the purposes of this Act;(b) to furnish to the Director General or the Secretary or any other officer
authorized by it, any relevant information relating to their products
or services or areas of expertise, as may be required for the purposesof this Act.
Explanation.— For the purposes of this section, the term “document”
includes information in the possession of a Systemically Significant DigitalEnterprise and its Associate Digital Enterprise whether stored
electronically or otherwise.

(5)

22.

Subject to the provisions of this Act, Sections 7, 8, 9, 10, 11, 12, 13, 14, 15, 16,
17 22 and 35 of the Competition Act, and the regulations framed
thereunder, shall apply mutatis mutandis to the Commission’s powers andactivities under this Act.

Reference by Statutory Authority(1)

Where in the course of a proceeding before any statutory authority an issue
is raised by any party that any decision which such statutory authority hastaken or proposes to take, is or would be, contrary to any of the provisions170

of this Act, then such statutory authority may make a reference in respectof such issue to the Commission:
Provided that any statutory authority, may, suo motu, make a reference to
the Commission on any issue that involves any provision of this Act or isrelated to promoting the objectives of this Act, as the case may be.
(2)

23.

On receipt of a reference under sub-section (1), the Commission shall giveits opinion, within sixty days of receipt of such reference, to such statutory
authority which shall consider the opinion of the Commission andthereafter, give its findings recording reasons therefor on the issues
referred to in the said opinion.

Reference by Commission(1)

Where in the course of a proceeding before the Commission an issue israised by any party that any decision which, the Commission has taken
during such proceeding or proposes to take, is or would be contrary to any
provision of an Act whose implementation is entrusted to a statutory
authority, then the Commission may make a reference in respect of such
issue to the statutory authority:
Provided that the Commission, may, suo motu, make a reference to astatutory authority on any issue that involves provisions of an Act whose
implementation is entrusted to that statutory authority.

(2)

24.

On receipt of a reference under sub-section (1), the statutory authority shallgive its opinion, within sixty days of receipt of such reference, to theCommission which shall consider the opinion of the statutory authority,and thereafter give its findings recording reasons therefor on the issues
referred to in the said opinion.

Director General to Investigate Contraventions(1)

The Director General shall, when so directed by the Commission, assist theCommission in investigating into any contravention of the provisions of
this Act or any rules or regulations made thereunder.

(2)

The Director General shall have all the powers as are conferred upon theCommission under subsection (2) of Section 21.
171

(3)

Without prejudice to sub-section (2), it shall be the duty of all officers, other
employees and agents of a party which are under investigation:
(a)

(b)

to preserve and to produce all information, books, papers, otherdocuments and records of, or relating to, the party which are in theircustody or power to the Director General, or any person authorisedby it in this behalf; andto give all assistance in connection with the investigation to the
Director General.

(4)

The Director General may require any person other than a party referred toin sub-section (3) to furnish such information or produce such books,
papers, other documents or records before it or any person authorised by
it in this behalf if furnishing of such information or the production of suchbooks, papers, other documents or records is relevant or necessary for the
purposes of its investigation.

(5)

The Director General may keep in his custody any information, books,
papers, other documents or records produced under sub-section (3) or subsection (4) for a period of one hundred and eighty days and thereafter shallreturn the same to the person by whom or on whose behalf the information,
books, papers, other documents or records were produced:
Provided that the information, books, papers, other documents or records
may be called for by the Director General if they are needed again for afurther period of one hundred and eighty days by an order in writing:
Provided further that the certified copies of the information, books, papers,
other documents or records, as may be applicable, produced before the
Director General may be provided to the party or person on whose behalf
the information, books, papers, other documents or records are produced
at their own cost.

(6)

On receipt of any books, or other documents, or any relevant informationfrom the Systemically Significant Digital Enterprise and its Associate
Digital Enterprise, the Director General may enter the premises of such a
Systemically Significant Digital Enterprise and its Associate DigitalEnterprise to verify such information.

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(7)

The Director General may examine on oath:(a)(b)

any of the officers and other employees and agents of the party being
investigated; andwith the previous approval of the Commission, any other person, in
relation to the affairs of the party being investigated and may
administer an oath accordingly and for that purpose may require anyof those persons to appear before it personally.

(8)

The examination under sub-section (7) shall be recorded in writing andshall be read over to or by, and signed by, the person examined and may
thereafter be used in evidence against it.

(9)

Where in the course of investigation, the Director General has reasonablegrounds to believe that information, books, papers, other documents orrecords of, or relating to, any party or person, may be destroyed, mutilated,altered, falsified or secreted, the Director General may make an application
to the Chief Metropolitan Magistrate, Delhi for an order for seizure of suchinformation, books, papers, other documents or records.

(10) The Director General may make requisition of the services of any police
officer or any officer of the Central Government to assist him for all or anyof the purposes specified in sub-section (11) and it shall be the duty of every
such officer to comply with such requisition.
(11) The Chief Metropolitan Magistrate, Delhi may, after considering theapplication and hearing from the Director General, by order, authorise the
Director General:
(a)

(b)
(c)

to enter, with such assistance, as may be required, the place or places
where such information, books, papers, other documents or records
are kept;
to search that place or places in the manner specified in the order; andto seize information, books, papers, other documents or records as it
considers necessary for the purpose of the investigation:

Provided that certified copies of the seized information, books, papers,
other documents or records, as the case may be, may be provided to theparty or person from whose place or places such documents have been
seized at its cost.
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(12) The Director General shall keep in his custody such information, books,
papers, other documents or records seized under this section for such
period not later than the conclusion of the investigation as it considers
necessary and thereafter shall return the same to the party or person from
whose custody or power they were seized and inform the Chief
Metropolitan Magistrate, of such return:
Provided that the Director General may, before returning such information,
books, papers, other documents or records take copies of, or extracts
thereof or place identification marks on them or any part thereof.
(13) Save as otherwise provided in this section, every search or seizure madeunder this section shall be carried out in accordance with the provisions of
the Code of Criminal Procedure, 1973, (2 of 1974) relating to search or
seizure made under that Code.
Explanation.— For the purposes of this section,—
(a)

(b)
(c)

25.

“agent”, in relation to any person, means, any one acting or
purporting to act for or on behalf of such person, and includes thebankers and persons employed as auditors and legal advisers, by such
person;“officers”, in relation to any company or body corporate, includes any
trustee for the debenture holders of such company or body corporate;
any reference to officers and other employees or agents shall be
construed as a reference to past as well as present officers and other
employees or agents, as the case may be.

Interim order
Where during an inquiry, the Commission is satisfied that an act incontravention of the provisions of this Act or rules or regulations framed
thereunder has been committed and continues to be committed or that such act
is about to be committed, the Commission may, by order, temporarily restrain
any party from carrying on such act until the conclusion of such inquiry or until
further orders, without giving notice to such party, where it deems it necessary.

26.

Acts taking place outside India

174

The Commission shall, notwithstanding that,(a) an enterprise is outside India; or(b) any other matter or practice or action arising out of an enterprise’s conduct is
outside India
have power to cause an inquiry against such enterprise for non-compliance of thisAct or rules or regulations framed thereunder, in India, and pass such orders as it
may deem fit in accordance with the provisions of this Act.
CHAPTER VIPENALTIES

27. Contravention of orders of Commission(1)

The Commission may cause an inquiry to be made into compliance of its
orders or directions made in exercise of its powers under the Act.

(2)

If any person, without reasonable cause, fails to comply with the orders ordirections of the Commission issued under Section 17, Section 25, Section
26 or Section 28 he shall be liable to a penalty which may extend to rupees
one lakh for each day during which such non-compliance occurs, subject toa maximum of rupees ten crore, as the Commission may determine.

(3)

If any person does not comply with the orders or directions issued, or fails
to pay the penalty imposed under sub-section (2), he shall, without
prejudice to any proceeding under Section 33, be punishable withimprisonment for a term which may extend to three years, or with finewhich may extend to rupees twenty-five crore, or with both, as the Chief
Metropolitan Magistrate, Delhi may deem fit:
Provided that the Chief Metropolitan Magistrate, Delhi shall not takecognizance of any offence under this Section save on a complaint filed by
the Commission or any of its officers authorised by it.

28. Penalties(1)

In an order finding a contravention under sub-section (1) of Section 17, theCommission may impose on a Systemically Significant Digital Enterprise175

or its Associate Digital Enterprise, penalties not exceeding ten per cent of
its global turnover, in the preceding financial year where it finds that the
Systemically Significant Digital Enterprise or its Associate DigitalEnterprise, fails to comply with any of the obligations laid down in Chapter
III and the rules and regulations framed thereunder.
(2)

In an order finding a contravention under sub-section (3) of Section 5, theCommission may impose on a Systemically Significant Digital Enterpriseor its Associate Digital Enterprise, penalties not exceeding ten per cent of
its global turnover, in the preceding financial year where it finds that the
Systemically Significant Digital Enterprise or its Associate DigitalEnterprise, fails to comply with the obligation under sub-section (1) of
Section 5.

(3)

The Commission may pass an order, imposing on an enterprise a penalty
where applicable which shall not exceed one percent of the global turnoverof such an enterprise where they fail to notify the Commission that theymeet the criteria specified in sub-section (2) of Section 3 and thenotifications issued thereunder.

(4)

The Commission may pass an order, imposing on an enterprise a penalty,
which shall not exceed one per cent of the global turnover of the enterprise,
where it:
(a)
(b)

(c)
(d)

(e)

provides incorrect, incomplete or misleading information or no
information under sub-section (1) or sub-section (3) of Section 4;
fails to provide information, or supplies incorrect, incomplete or
misleading information that is required pursuant to a show cause
notice under Section 4 or Section 16;
provides or supplies incorrect, incomplete or misleading information
under sub-section (1) of Section 6;
fails to provide information, or provides or supplies incorrect,
incomplete or misleading information under sub-section (2) of Section
9;
provides incorrect, incomplete or misleading information, or fails toor refuses to provide complete information or cooperate pursuant to
the powers of the Commission under Section 21 or the Director
General under Section 24.

176

(5)

The Commission shall, prior to passing an order imposing a penalty under
this section, provide the enterprise a reasonable opportunity of being
heard.

Explanation.— For the purposes of this section:(1) "Global turnover" shall include revenue of the enterprise derived from thesale of all goods and provision of all services, whether digital or otherwise, andwhen an enterprise is part of a group, shall include the revenue derived from thesale of all goods and provision of all services, whether digital or otherwise, ofsuch group.
(2) The value of “global turnover” shall be calculated in the manner as may be
specified.

29.

Contravention by Companies(1)

Where a contravention of any of the provisions of this Act or of any rule,
regulation, order made or direction issued thereunder is establishedagainst the Systemically Significant Digital Enterprise or its Associate
Digital Enterprise, every person who, at the time the contravention wascommitted, was in charge of, and was responsible to the SystemicallySignificant Digital Enterprise or its Associate Digital Enterprise for the
conduct of its business, shall be deemed to be in contravention of this Act
and unless otherwise provided in this Act, the Commission may impose
such penalty on such persons, as it may deem fit which shall not be morethan ten per cent of the average of the income for the last three preceding
financial years.

(2)

Nothing contained in sub-section (1) shall render any such person liable toany penalty if he proves that the contravention was committed without his
knowledge or that he had exercised all due diligence to prevent thecommission of such contravention.

(3)

Notwithstanding anything contained in sub-section (1), where acontravention of any of the provisions of this Act or of any rule, regulation,order made or direction issued thereunder has been committed by a
Systemically Significant Digital Enterprise or its Associate DigitalEnterprise and it is proved that the contravention has taken place with the177consent or connivance of, or is attributable to any neglect on the part of, any
director, manager, secretary or other officers of the company, such director,
manager, secretary or other officers shall also be deemed to be incontravention of the provisions of this Act and unless otherwise provided
in this Act, the Commission may impose such penalty on such persons, as
it may deem fit which shall not be more than ten per cent. of the average ofthe income for the last three preceding financial years.
Explanation.—For the purposes of this section,—(a) “company” means a body corporate and includes a firm or otherassociation of individuals;(b) “director”, in relation to a firm, means a partner in the firm;(c) “income”, in relation to a person, shall be determined in such manner as
may be specified.

30. Limitation Period for initiation of inquiry(1)

The Commission shall not entertain any information or reference under
Section 16 unless it is filed within three years from the date on which thecause of action has arisen.

(2)

An information or reference may be entertained after the period specified
in sub-section (1) if the Commission is satisfied that there had been
sufficient cause for not filing the information or reference within such
period after recording its reasons for condoning such delay.

31. Crediting sums realised by way of penalties to Consolidated Fund of India
All sums realised by way of penalties, settlement, and recovery of legal costs by
the Commission under this Act shall be credited to the Consolidated Fund of
India.

32. Rectification of orders(1)

With a view to rectifying any mistake apparent from the record, theCommission may amend any order passed by it under the provisions of
this Act.

(2)

Subject to the other provisions of this Act, the Commission may make:

178

(a)
(b)

an amendment under sub-section (1) of its own motion;
an amendment for rectifying any such mistake which has beenbrought to its notice by any party to the order.

Explanation.— For the removal of doubts, it is hereby declared that theCommission shall not, while rectifying any mistake apparent from record,
amend substantive part of its order passed under the provisions of this Act.

33. Execution of orders of Commission imposing monetary penalty(1)

If an enterprise or a person fails to pay any monetary penalty imposed on
him under this Act, the Commission shall proceed to recover such penalty,
in such manner as may be specified.

(2)

In a case where the Commission is of the opinion that it would be expedient
to recover the penalty imposed under this Act in accordance with theprovisions of the Income Tax Act, 1961 (43 of 1961), it may make a reference
to this effect to the concerned income-tax authority under that Act forrecovery of the penalty as tax due under the said Act.

(3)

Where a reference has been made by the Commission under sub-section (2)for recovery of penalty, the person upon whom the penalty has been
imposed shall be deemed to be the assessee in default under the Income
Tax Act, 1961 (43 of 1961) and the provisions contained in sections 221 to
227, 228A, 229, 231 and 232 of the said Act and the Second Schedule to that
Act and any rules made there under shall, in so far as may be, apply as if
the said provisions were the provisions of this Act and referred to sums by
way of penalty imposed under this Act instead of to income tax and sums
imposed by way of penalty, fine, and interest under the Income Tax Act,
1961 (43 of 1961) and to the Commission instead of the Assessing Officer.

Explanation 1. – Any reference to sub-section (2) or sub-section (6) of section 220of the Income Tax Act, 1961 (43 of 1961), in the said provisions of that Act or therules made thereunder shall be construed as references to Section 28 of this Act.
Explanation 2. – The Tax Recovery Commissioner and the Tax Recovery Officer
referred to in the Income Tax Act, 1961 (43 of 1961) shall be deemed to be the Tax
Recovery Commissioner and the Tax Recovery Officer for the purposes ofrecovery of sums imposed by way of penalty under this Act and reference madeby the Commission under sub-section (2) would amount to drawing of a179certificate by the Tax Recovery Officer as far as demand relating to penalty under
this Act.
Explanation 3. – Any reference to appeal in Chapter XVIID and the Second
Schedule to the Income Tax Act, 1961 (43 of 1961), shall be construed as areference to appeal before the National Company Law Appellate Tribunal under
Section 34 of this Act.
CHAPTER VII
APPEALS AND POWERS OF APPELLATE TRIBUNAL

34. Appeal to Appellate Tribunal(1)

The National Company Law Appellate Tribunal constituted under section
410 of the Companies Act, 2013 (18 of 2013) shall be the Appellate Tribunal
for the purpose of this Act and the said Appellate Tribunal shall havejurisdiction to hear and dispose of appeals against directions issued ordecision made or order passed by the Commission under the following:(a) Clause (a) of sub-section (4) of Section 4;(b) Clause (a) of sub-section (6) of Section 4;(c) Sub-sections (7) or (9) of Section 4;(d) Sub-section (3) of Section 5;(e) Sub-sections (3) of Section 6;(f) Sub-sections (2), (10) and (13) of Section 16;(g) Sub-section (1) of Section 17;(h) Section 25;(i) Section 26;(j) Section 27;(k) Section 28;(l) Section 29;(m) Section 32;(n) Section 33.

(2)

The Central Government, or the State Government or a local authority, or
an enterprise or any person, aggrieved by any direction, decision or orderreferred to in sub-section (1) may prefer an appeal to the Appellate
Tribunal.

(3)

Every appeal under sub-section (2) shall be filed within a period of sixty
days from the date on which a copy of the direction or decision or order180

made by the Commission is received by the Central Government, or theState Government or a local authority, or an enterprise or any personreferred to in that sub-section and it shall be in such form and beaccompanied by such fee as may be prescribed.
(4)

The Appellate Tribunal may entertain an appeal after the expiry of the said
period of sixty days if it is satisfied that there was sufficient cause for not
filing it within that period.

(5)

No appeal by a person, who is required to pay any amount in terms of anorder of the Commission, shall be entertained by the Appellate Tribunal
unless the appellant has deposited twenty-five per cent of that amount in
the manner as directed by the Appellate Tribunal.

(6)

On receipt of an appeal under sub-section (2), the Appellate Tribunal may,after giving the parties to the appeal, an opportunity of being heard, passsuch orders thereon as it thinks fit, confirming, modifying or setting aside
the direction, decision or order appealed against.

(7)

The Appellate Tribunal shall send a copy of every order made by it to theCommission and the parties to the appeal.

(8)

The appeal filed before the Appellate Tribunal under sub-section (2) shallbe dealt with by it as expeditiously as possible and endeavour shall bemade by it to dispose of the appeal within six months from the date ofreceipt of the appeal.

35. Awarding Compensation
Any person aggrieved by non-compliance of obligations imposed under this Act,by a Systemically Significant Digital Enterprise or its Associate Digital Enterpriseas determined by the Commission, may approach the Appellate Tribunal or theSupreme Court for compensation in accordance with Section 53N of theCompetition Act.

36. Procedures and powers of Appellate Tribunal
Sections 53N, 53O, 53P, 53Q(1), 53S, and 53U of the Competition Act shall apply
mutatis mutandis to the power and procedures of the Appellate Tribunal under
this Act.
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37. Appeal to Supreme Court(1)

The Central Government or any State Government or the Commission or
any statutory authority or any local authority or any enterprise or any
person aggrieved by any decision or order of the Appellate Tribunal may
file an appeal to the Supreme Court within sixty days from the date ofcommunication of the decision or order of the Appellate Tribunal to them.

(2)

The Supreme Court may, if it is satisfied that the applicant was prevented
by sufficient cause from filing the appeal within the said period, allow it tobe filed after the expiry of the said period of sixty days.

CHAPTER VIIIMISCELLANEOUS

38. Power of the Central Government to exempt enterprises
The Central Government may, by notification, exempt an enterprise from theapplication of one or more provisions of this Act, the rules or regulations framed
thereunder, or any provision thereof, and for such period as it may specify insuch notification:
(a)
(b)
(c)

in the interest of security of the State or public interest;in accordance with any obligation assumed by India under any treaty,
agreement or convention with any other country or countries.
if it performs a sovereign function on behalf of the Central Government ora State Government, only in respect of activities relatable to the dischargeof the sovereign functions.

39. Power of Central Government to issue directions(1)

Without prejudice to the foregoing provisions of this Act, the Commission
shall, in exercise of its powers or the performance of its functions under
this Act, be bound by such directions on questions of policy as the Central
Government may give in writing to it from time to time:
Provided that the Commission shall, as far as practicable, be given
an opportunity to express its views before any direction is given under182

this sub-section.
(2)

The decision of the Central Government whether a question is one ofpolicy or not shall be final.

40. Power of Central Government to supersede Commission(1)

If at any time the Central Government is of the opinion:(a)that on account of circumstances beyond the control of theCommission, it is unable to discharge the functions or perform theduties imposed on it by or under the provisions of this Act; or(b) that the Commission has persistently made default in complying
with any direction given by the Central Government under thisAct or in the discharge of the functions or performance of the duties
imposed on it by or under the provisions of this Act and as a result ofsuch default the financial position of the Commission or theadministration of the Commission has suffered; or(c) that circumstances exist which render it necessary in the public
interest so to do,
the Central Government may, by notification and for reasons to be
specified therein, supersede the Commission for such period, notexceeding six months, as may be specified in the notification:
Provided that before issuing any such notification, the Central
Government shall give a reasonable opportunity to the Commission to
make representations against the proposed supersession and shallconsider representations, if any, of the Commission.
(2)

Upon the publication of a notification under sub-section (1) superseding
the Commission—(a)(b)

the Chairperson and other Members shall as from the date ofsupersession, vacate their offices as such;
all the powers, functions and duties which may, by or under theprovisions of this Act, be exercised or discharged by or on behalf of
the Commission shall, until the Commission is reconstituted undersub-section (3), be exercised and discharged by the Central
Government or such authority as the Central Government may
specify in this behalf;
183

(c)

all properties owned or controlled by the Commission shall, until
the Commission is reconstituted under sub-section (3), vest in theCentral Government.

(3)

On or before the expiration of the period of supersession specified
in the notification issued under subsection (1), the Central Government
shall reconstitute the Commission by a fresh appointment of its
Chairperson and other Members and in such case any person who hadvacated his office under clause (a) of sub-section (2) shall not be deemed tobe disqualified for re-appointment.

(4)

The Central Government shall cause a notification issued under subsection (1) and a full report of any action taken under this section andthe circumstances leading to such action to be laid before each House of
Parliament at the earliest.

41. Restriction on disclosure of information
No information relating to any enterprise or person, being information which has
been obtained by or on behalf of the Commission or the Appellate Tribunal forthe purposes of this Act, shall, without the previous permission in writing of theconcerned enterprise or person, be disclosed otherwise than in compliance withor for the purposes of this Act or any other law for the time being in force.

42. Chairperson, Members, Director General, Secretary, officers and other
employees, etc., to be public servants
The Chairperson and other Members and the Director General, Additional,
Joint, Deputy or Assistant Directors General and Secretary and officers andother employees of the Commission and the Chairperson, Members, officers andother employees of the Appellate Tribunal shall be deemed, while acting or
purporting to act in pursuance of any of the provisions of this Act, to be public
servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).

43. Protection of action taken in good faithNo suit, prosecution or other legal proceedings shall lie against theCentral Government or Commission or any officer of the Central Governmentor the Chairperson or any Member or the Director- General, Additional, Joint,
Deputy or Assistant Directors General or the Secretary or officers or other184employees of the Commission or the Chairperson, Members, officers and other
employees of the Appellate Tribunal for anything which is in good faith doneor intended to be done under this Act or the rules or regulations madethereunder.

44. Act to have overriding effect
The provisions of this Act shall have effect notwithstanding anythinginconsistent therewith contained in any other law for the time being in force.

45. Application of other laws not barred
The provisions of this Act shall be in addition to, and not in derogation of, theprovisions of any other law for the time being in force.

46. Exclusion of jurisdiction of civil courts
No civil court shall have jurisdiction to entertain any suit or proceeding in respectof any matter which the Commission or the Appellate Tribunal is empowered byor under this Act to determine and no injunction shall be granted by any court
or other authority in respect of any action taken or to be taken in pursuance ofany power conferred by or under this Act.

47. Power to seek recommendations
The Central Government may request the Commission to examine and makerecommendations including on whether one or more services should be addedor removed from the list of Core Digital Services.

48. Power to make rules(1)

The Central Government may, by notification, make rules to carry out theprovisions of this Act.

(2)

In particular, and without prejudice to the generality of the foregoingpower, such rules may provide for all or any of the following matters,
namely:(a) the manner of calculating equivalent fair value under clause (iv) of subsection (2) of Section 3;
185

(b) other factors to which conduct requirements may be subjected to underclause (f) of sub-section (5) of Section 7;(c) the form in which an appeal may be filed before the Appellate Tribunal
under sub-section (3) of Section 34 and the fees payable in respect ofsuch appeal;(d) the form of publication of guidelines under sub-section (5) of Section 50;
and(e) any other matter which is to be, or may be, prescribed, or in respect ofwhich provision is to be, or may be, made by rules.
(3)

Every rule made under this Act by the Central Government shall be laid,
as soon as may be after it is made, before each House of Parliament,
while it is in session, for a total period of thirty days which may becomprised in one session, or in two or more successive sessions, and if,
before the expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any
modification in the notification or rule, or both Houses agree that the
notification should not be issued or rule should not be made, thenotification or rule shall thereafter have effect only in such modified formor be of no effect, as the case may be; so, however, that any suchmodification or annulment shall be without prejudice to the validity ofanything previously done under that notification or rule, as the case maybe.

49. Power to make regulations and process of issuing regulations(1)

The Commission may, by notification, make regulations consistent withthis Act and the rules or notifications made thereunder to carry out the
purposes of this Act.

(2)

In particular, and without prejudice to the generality of the foregoingprovisions, such regulations may provide for all or any of the following
matters, namely:(a) the manner of calculating turnover in India, global turnover, grossmerchandise value and global market capitalisation under explanation(5) to sub-section 2 to Section 3;(b) the manner of calculating number of end users and business users
under explanation (6) to sub-section 2 to Section 3;

186

(c) the form and manner for an enterprise notifying the Commission that it
fulfils the criteria to qualify as a Systemically Significant DigitalEnterprise under sub-section (1) of Section 4;(d) the form and manner for an enterprise furnishing information to theCommission that it fulfils the criteria to qualify as a SystemicallySignificant Digital Enterprise under sub-section (3) of Section 4;(e) the form and manner of application by an enterprise that it no longer
fulfils the criteria to qualify as a Systemically Significant DigitalEnterprise under sub-section (1) of section 6;(f) the form and manner of application by an enterprise for revocation ofdesignation under sub-section (2) of section 6;(g) the separate conduct requirements for each Core Digital Service undersub-section (3) of Section 7;(h) the differential obligations for Associate Digital Enterprises under theproviso to sub-section (3) of Section 7;(i) the manner of establishing complaint handing and compliancemechanisms under sub-section (1) of Section 9;(j) the form and manner of reporting of measures undertaken by anenterprise under sub-section (2) of Section 9;(k) the meaning of the term consent for business users under explanation 2of under sub-section (2) of Section 12;(l) the manner of allowing users to port data under sub-section (3) ofSection 12;(m)
the nature of restrictions considered integral for compliance with
anti-steering obligations under Section 14;(n) the nature of restrictions considered integral for compliance with tying
and bundling obligations under Section 15;(o) the manner and fee for receipt of information under clause (b) of subsection (1) of Section 16;(p) the time period within which the report of the Director General may besubmitted under sub-section (4) and sub-section (6) of Section 16;(q) other details to be indicated in the show cause notice under sub-section(14) of Section 16;(r) the manner and form of providing description of measures undertaken
by an enterprise and the time period under sub-section (2) of Section 17;(s) the form of application and fee under sub-section (1), the time undersub-section (2), the terms and manner of implementations andmonitoring under sub-section (3) and the procedure for conducting
settlement proceedings under subsection (6) of Section 18;

187

(t) the form of application and fee under sub-section (1), the time undersub-section (2), the terms and manner of implementations andmonitoring under sub-section (3) and the procedure for commitments
offered under sub-section (6) of Section 19;(u) the manner of calculating global turnover under explanation 2 toSection 28;(v) the manner of determining income under explanation (c) of Section 29;(w)the manner in which penalty shall be recovered under sub-section (1) of
Section 33;(x) the other details to be published along with draft regulations and theperiod for inviting public comments under clause (a) of sub-section (5)of this Section; and(y) any other matter in respect of which provision is to be, or may be, madeby regulations.
(3)

While framing regulations under Chapter III, the Commission may specify
conduct requirements with due regard to factors such as the nature of theCore Digital Service(s), including online intermediation services, the end
users or business users, the nature of the industry or service, and any otherfactor that the Commission may deem fit.

(4)

In exercise of its powers to make regulations under sub-section (1), theCommission may consult any statutory authority, government body orother entity as the Commission may deem fit.

(5)

The Commission shall ensure transparency while making regulations
under this Act, by:
(a)

(b)
(c)

publishing draft regulations along with such other details as may be
specified on its website and inviting public comments for a specified
period prior to issuing regulations;publishing a general statement of its response to the public comments,
not later than the date of notification of the regulations; andperiodically reviewing such regulations.

Provided that if the Commission is of the opinion that certain regulations
are required to be made or existing regulations are required to be amended
urgently in public interest or the subject matter of the regulation relates
solely to the internal functioning of the Commission, it may makeregulations or amend the existing regulations, as the case may be, without
188

following the provisions stated in this section recording the reason, fordoing so.
(6)

Every regulation made under this Act shall be laid, as soon as may be after
it is made, before each House of Parliament, while it is in session, for a total
period of thirty days which may be comprised in one session or in two or
more successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions aforesaid,
both Houses agree in making any modification in the regulation, or bothHouses agree that the regulation should not be made, the regulation shallthereafter have effect only in such modified form or be of no effect, as thecase may be; so, however, that any such modification or annulment shallbe without prejudice to the validity of anything previously done under that
regulation.

50. Power to issue guidelines(1)

The Commission may publish guidelines on the provisions of this Act or
the rules and regulations made thereunder either on a request made by aperson or on its own motion.

(2)

Guidelines issued under sub-section (1) shall not be construed asdetermination of any question of fact or law by the Commission, its
Members or officers and shall not be binding on the Commission, its
Members or officers.

(3)

Without prejudice to anything contained in sub-section (1), theCommission shall publish guidelines as to the appropriate amount of any
penalty for any contravention of provision of this Act.

(4)

While imposing a penalty under Section 28 or under Section 29 for any
contravention of provision of this Act, the Commission shall consider theguidelines under sub-section (3) and provide reasons in case of any
divergence from such guidelines.

(5)

The guidelines under sub-sections (1) and (3) shall be published in suchform as may be prescribed.

51. Power of the Central Government to notify and amend Schedules

189

(1)

The Central Government in consultation with the Commission, may by
amendment, notify new services, or alter or delete services mentioned in
Schedule I to this Act.

(2)

Any amendment notified under sub-section (1) shall have effect as if
enacted in this Act and shall come into force on the date of the notification
unless the notification otherwise directs.

(3)

Every alteration made by the Central Government under sub-section (1)shall be laid as soon as may be after it is made before each House of
Parliament while it is in session for a total period of thirty days which may
be comprised in one session or in two or more successive sessions, and if,
before the expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any
modification in the alteration, or both Houses agree that the alteration
should not be made, the alteration shall thereafter have effect only in suchmodified form or be of no effect, as the case may be; so, however, that any
such modification or annulment shall be without prejudice to the validityof anything previously done in pursuance of that alteration.

52. Finance, Accounts and Audit
Provisions of Chapter VIII of the Competition Act shall have application for the
purpose of implementation of this Act.

53. Power to remove difficulties(1)

If any difficulty arises in giving effect to the provisions of this Act, theCentral Government may, by order published in the Official Gazette, makesuch provisions, not inconsistent with the provisions of this Act as may
appear to it to be necessary for removing the difficulty.

(2)

No such order shall be made under this Section after the expiry of a periodof five years from the commencement of this Act.

(3)

Every order made under this Section shall be laid, as soon as may after it ismade before each House of Parliament.

190

SCHEDULE I
1. A “Core Digital Service” includes any of the following:(a) online search engines;(b) online social networking services;(c) video-sharing platform services;(d) interpersonal communications services;(e) operating systems;(f) web browsers;(g) cloud services;(h) advertising services; and(i) online intermediation services.
For the purposes of paragraph 1, the following terms shall mean:(a) “Online search engine” includes a digital service that allows users to input
queries in order to perform searches of, in principle, all websites, or all
websites in a particular language, on the basis of a query on any subject in theform of a keyword, voice request, phrase or other input, and returns results inany format in which information related to the requested content can be found;(b) “Online social networking services” includes a digital service that enables one
or more users to connect, communicate or interact with other users, create,
upload, disseminate electronic information and discover other users andelectronic information across multiple devices and, in particular, via
messages, posts, videos, and recommendations;(c) “Video-sharing platform services” includes a digital service, whose provider
performs a significant role in determining the online curated content being
made available, and makes available to users a computer resource that enables
such users to access online curated content over the internet or computer
networks, and such other entity called by whatever name, which isfunctionally similar to publishers of online curated content but does notinclude any individual or user who is not transmitting online curated content
in the course of systematic business, professional or commercial activity;(d) “Interpersonal communications service” includes an interpersonalcommunications digital service which does not connect with publicly assigned
numbering resources, namely, a number or numbers in national orinternational numbering plans, or which does not enable communication with191

a number or numbers in national or international numbering plans, including
providing end-to-end to voice call or messaging between individual users or
between group of users and individual end users;(e) “Operating system” includes a system software that controls the basic
functions of the hardware or software and enables software applications to
run on the computer resource;(f) “Advertising service” means a digital service in relation to anything published(in any form) for the purpose of promoting a product or service to the public
or a section of the public, and includes a catalogue, a circular or a price list
published in any format and in any accessible medium and includes any
advertising networks, advertising exchanges and any other advertisingintermediation services;(g) “Web browser” includes a software application that enables end users toaccess and interact with information hosted on computer resources that may
be connected to networks such as the Internet, including standalone webbrowsers as well as web browsers integrated to or embedded in software orsimilar applications;(h) “Cloud service” includes a digital service that enables access to a scalable andelastic pool of computer resources; and(i) “Online intermediation service” includes any other digital service, notexpressly covered under clauses (a) to (h) of Schedule I, which on behalf of an
end user or a business user, receives, stores or transmits electronic record orprovides any service with respect to that record and includes web-hosting
service providers, payment sites, auction sites, online application stores, online
marketplaces and aggregators providing services such as mobility aggregation,
food ordering, food delivery services and match-making.

192

ENDNOTES
RaghavanCommittee
Report(2000)<https://theindiancompetitionlaw.files.wordpress.com/2013/02/report_of_high_level_committee_on_competition_policy_law_svs_raghavan_committee.pdf> accessed 30 May 2023.
1

2 Competition Act, Preamble.
3 An ex-post regulatory approach envisages intervention in a market after the occurrence of an anti-

competitive conduct. Such an approach is fact-specific and relies on available market information forevidence of abuse. See OECD, ‘Ex-Ante Regulation and Competition in Digital Markets – Note by
BIAC’,
p.
10(24
November
2021)<https://one.oecd.org/document/DAF/COMP/WD(2021)79/en/pdf> accessed 20 June 2023.
Dr. Tilottama Raychaudhuri, ‘Abuse of Dominance in Digital Platforms: An Analysis of Indian
Competition Jurisprudence’ (2020) Competition Commission of India Journal on Competition Law and Policy
1, p. 4 <https://ccijournal.in/index.php/ccijoclp/article/view/5> accessed 4 June 2023.
45 Competition Act, Sections 5 and 6.

Ex-ante regulation aims to identify and regulate specific areas / issues in a market before theoccurrence of any anti-competitive conduct. They may specify codes of conduct for market participants
and seek to guide stakeholder behaviour through regulatory intervention. See OECD, ‘Ex AnteRegulation and Competition in Digital Markets’ (2021) <https://www.oecd.org/daf/competition/exante-regulation-and-competition-in-digital-markets-2021.pdf> accessed on 23 June 2023.
6

7 CLRC Report (2019), p. 149 – 160.
8 CLRC Report (2019), p. 157 – 158.
9 Competition (Amendment) Act, 2023 <https://www.cci.gov.in/images/legalframeworkact/en/the-competition-amendment-act-20231681363446.pdf> accessed on 30 May 2023.
10 CLRC Report (2019), p. 64.
11 Competition Act, Section 3(4).
12 CLRC Report (2019), p. 129.
13 CLRC Report (2019), p. 133.
14 Competition Act, Section 5(d).
15 Competition Act, Sections 19(6) and 19(7). See also CLRC Report (2019), p. 71 – 72.
16 The CCI has investigated several large digital enterprises for abusing their dominant position in themarket by engaging in ACPs such as inter alia anti-steering, self-preferencing, tying and bundling,
predatory pricing and restricting third party applications in the recent past. The CCI has also passed
orders under Section 27 of the Competition Act and imposed large monetary penalties on digitalenterprises in three instances since 2019. Chapter II (The Competition Act, 2002) contains discussion
on the enforcement practice of the CCI.
Special Correspondent, ‘Define unfair trade practice for e-com’ (The Hindu, 24 March 2021)<https://www.thehindu.com/business/define-unfair-trade-practice-for-e-com/article34154056.ece>
accessed 4 June 2023; Business Today Desk, ‘Government warns Ed-tech companies against unfair trade17

193

practices’(Business
Today,
1
July
2022)<https://www.businesstoday.in/latest/corporate/story/government-warns-ed-tech-companiesagainst-unfair-trade-practices-340028-2022-07-01> accessed 4 June 2023; Gireesh Chandra Prasad, ‘Ola,
Uber get CCPA notices for ‘unfair trade practices’’ (LiveMint, 20 May 2022)<https://www.livemint.com/news/india/central-consumer-protection-authority-issues-noticesagainst-ola-uber-for-unfair-practices-11653058167113.html> accessed 4 June 2023.
Standing
Committee
Report(2022)<https://loksabhadocs.nic.in/lsscommittee/Finance/17_Finance_53.pdf> accessed on 30 May 2023.
18

19 Standing Committee Report (2022), p. 1.
20 Standing Committee Report (2022), p. 1.
21 Standing Committee Report (2022), p. 31.
22 Standing Committee Report (2022), p. 4.
23 Competition Act, Section 5(d).
24 Standing Committee Report (2022), p. 31.
25 Standing Committee Report (2022), p. 38.
26 Standing Committee Report (2022), p. 39.
27 Shubhangi Heda, ‘Contours of Competition Policy in the Digital Economy’ in Pradeep S. Mehta,

Ujjwal Kumar and Garima Sodhi, Competition and Regulation in India, 2021: Towards Inclusive Digital
Economy in a post-COVID era, Chapter 3 (CUTS, 2021) < https://cuts-ccier.org/pdf/ReportICRR2021.pdf> accessed on 30 May 2023; Dr. Tilottama Raychaudhuri, ‘Predatory Pricing and Market
Determination in Non-Traditional Markets: An Analysis of Recent Cases Decided by the Competition
Commission of India’ (2020) Indian Journal of Law and Justice 11; Alok Prasanna Kumar and ManjushreeRM, ‘Data, Democracy and Dominance: Exploring a new antitrust framework for digital platforms’ inCentre for Communication Governance, The Future of Democracy in the Shadow of Big and Emerging Tech(National
Law
University
Delhi
Press,
2021)<https://ccgdelhi.s3.ap-south1.amazonaws.com/uploads/the-future-of-democracy-in-the-shadow-of-big-and-emerging-tech-ccg248.pdf> accessed 30 May 2023; Geeta Gouri and Kalyani Pandya, ‘The Indian competition law
experience – its history and its (digital) future’ (2020) Indian Law Review 4.
28 Ankita Sharma, ‘Covid-19 has accelerated India’s digital reset’ (World Economic Forum, August 2020)<https://www.weforum.org/agenda/2020/08/covid-19-has-accelerated-india-s-digital-reset/>
accessed 24 July 2023.
29 NITI Aayog, ‘India’s Booming Gig and Platform Economy: Perspectives and Recommendations on

theFuture
of
Work’
(June
2022)
<https://www.niti.gov.in/sites/default/files/202206/25th_June_Final_Report_27062022.pdf> accessed 24 July 2023.
30 UNCTAD, ‘How Covid-19 triggered the digital and e-commerce turning point’ (15 March 2021)<https://unctad.org/news/how-covid-19-triggered-digital-and-e-commerce-turning-point> accessed
24 July 2023.
31 PTI, ‘Over 50% Indians are active internet users now; base to reach 900 million by 2025: report’ (The

Hindu, 4 May 2023) <https://www.thehindu.com/news/national/over-50-indians-are-activeinternet-users-now-base-to-reach-900-million-by-2025-report/article66809522.ece> accessed 24 July
2023.

194

Statista, ‘Number of internet users in India from 2010 to 2023, with estimates until 2050’<https://www.statista.com/statistics/255146/number-of-internet-users-in-india/> accessed 24 July
2023.
32

33 Jibu Elias, ‘AI for all: How India is carving its own path in the global AI race’ (OECD, January 2023)<https://oecd.ai/en/wonk/india> accessed 24 July 2023.
Department for Promotion of Industry and Internal Trade, “DPIIT Recognized Startups”<https://www.startupindia.gov.in/> accessed 29 January 2024.
34

35 Beena Parmar, ‘Indian tech industry to grow slower at 3.8%, crosses $250 billion: Nasscom’ (The

Economic Times, 16 February 2024) <https://economictimes.indiatimes.com/tech/technology/techindustry-revenue-to-touch-254-billion-this-fiscal-nasscom/articleshow/107754547.cms?from=mdr>
accessed 7 March 2024.
36 CCI, ‘Market Study on E-commerce in India: Key Findings and Observations’ (8 January 2020), para

50, p. 17 <https://www.cci.gov.in/economics-research/market-studies/details/18/6> accessed 10
August 2023. (“CCI E-commerce Market Study”)
37 The term of the Committee was extended from time to time. The Committee held various meetingson different dates to discuss and deliberate various issues and then proceeded to write the Report.
38 Competition Act, Preamble.
39 Competition Act, Section 4.
40 Competition Act, Sections 5 and 6.
41 Competition Act, Section 4, Explanation (a).
42 Competition Act, Section 19(5).
43 Competition Act, Section 19(4).
44 Competition Act, Section 26.
45 Competition Act, Section 26.
46 Competition Act, Section 27.
47 CLRC Report (2019), p. 40.
48 Mr. Umar Javeed v. Google LLC, CCI order dated 20 October 2022 in Case No. 39 of 2018.
49 Mr. Umar Javeed v. Google LLC, CCI order dated 20 October 2022 in Case No. 39 of 2018, paras 9 and

10.
50 Competition Act, Section 27.
51 Mr. Umar Javeed v. Google LLC, CCI order dated 20 October 2022 in Case No. 39 of 2018.
52 Google LLC v. Competition Commission of India, Civil Appeal No. 4098 / 2023.
53 Matrimony.com Limited v. Google LLC, CCI order dated 8 February 2018 in Case Nos. 7 and 30 of 2012.
54 Matrimony. Com Limited v. CCI, Competition Appeal (AT)/17/2018.

195

55 For instance: In Re: Updated Terms of Service and Privacy Policy for WhatsApp Users, CCI order dated 24

March 2021 in Suo Moto Case No. 01 of 2021; Kshitiz Arya v. Google LLC, CCI order dated 22 June 2021
in Case No. 19 of 2020; Together We Fight Society v. Apple Inc. & Ors., CCI order dated 31 December 2021
in Case No. 24 of 2021; Digital News Publishers v. Alphabet Inc., CCI order dated 7 January 2022 in Case
No. 41 of 2021; National Restaurant Association of India (‘NRAI’) v. Zomato Limited (‘Zomato’), CCI order
dated 4 April 2022 in Case No. 16 of 2021; and Vijay Gopal v. Big Tree Entertainment Pvt. Ltd.
(BookMyShow), CCI order dated 16 June 2022 in Case No. 46 of 2021.
56 XYZ v. Alphabet Inc. & Ors., CCI order dated 25 October 2022 in Case No. 07 of 2020; Mr. Umar Javeed

v. Google LLC, CCI order dated 20 October 2022 in Case No. 39 of 2018; and Federation of Hotel &Restaurant Associations of India (FHRAI) v. MakeMyTrip India Pvt. Ltd. (MMT), CCI order dated 19
October 2022 in Case No. 14 of 2019.
57 Google LLC v. Competition Commission of India, Civil Appeal No. 4098 / 2023.
58Alphabet Inc v. CCI, NCLAT, Competition Appeal (AT) No. 4 of 2023 and Oravel Stays v. CCI, NCLAT,

Competition App. (AT) No. 55 of 2022.
Dr. Tilottama Raychaudhuri and Ramya Chandrashekhar, ‘The Growing Necessity of Interim
Measures to Preserve Competition in Rapidly Changing Digital Markets’ (2021) Indian Journal of Law
and Technology 17, p. 16 - 17.
59

60 Competition Act, Sections 2(t), 2(r), 2(s).
61 Sebastian Wismer & Arno Rasek, ‘Market definition in multi-sided markets’ (OECD, 15 November

2017)<https://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DAF/COMP/WD%2
82017%2933/FINAL&docLanguage=En#:~:text=As%20multi%2Dsided%20markets%20involve,impor
tant%20in%20multi%2Dsided%20markets> accessed 18 July 2023.
62 Alok Prasanna Kumar and Manjushree RM, ‘Data, Democracy and Dominance: Exploring a newantitrust framework for digital platforms’ in Centre for Communication Governance, The Future of
Democracy in the Shadow of Big and Emerging Tech (National Law University Delhi Press, 2021), p. 32<https://ccgdelhi.s3.ap-south-1.amazonaws.com/uploads/the-future-of-democracy-in-the-shadowof-big-and-emerging-tech-ccg-248.pdf> accessed 30 May 2023.
63 Matrimony.com Limited v. Google LLC, CCI order dated 8 February 2018 in Case Nos. 7 and 30 of 2012,

para 84.
64 Matrimony.com Limited v. Google LLC, CCI order dated 8 February 2018 in Case Nos. 7 and 30 of 2012,

para 199.
65 Jasper lnfotech Private Limited (Snapdeal) v. KAFF Appliances (India) Pvt. Ltd. (Kaff), CCI order dated 15

January 2019 in Case No. 61 of 2014; National Restaurant Association of India (‘NRAI’) v. Zomato Limited(‘Zomato’), CCI order dated 4 April 2022 in Case No. 16 of 2021.
66 FDI Policy, para 5.2.15.2.1.
67 FDI Policy, para 5.2.15.2.3.
68 FDI Policy, para 5.2.15.2.4 (iv). Inventory of a vendor is deemed to be controlled by an e-commercemarketplace entity if more than 25% of the purchases of such vendor are from the marketplace entity
or its group companies.
69 FDI Policy, para 5.2.15.2.4 (ix).

196

70 FDI Policy, para 5.2.15.2.4 (v).
71 FDI Policy, para 5.2.15.2.4 (ix).
72 FDI Policy, para 5.2.15.2.4 (xi).
73 FF Bureau, ‘DIPP formulates policies on FDI, but can’t enforce them’ (Financial Express, 12 May 2016)<https://www.financialexpress.com/economy/dipp-formulates-policies-on-fdi-but-cant-enforcethem/253327/> accessed on 5 June 2023.
74 Ministry of Electronics and Information Technology Notification No. S.O. 942(E) dated 25 February

2021. A social media intermediary with fifty lakh registered users is considered to be a significant social
media intermediary.
75 IT Rules, Rule 3(1)(k).
76 DPDP Act<https://www.meity.gov.in/writereaddata/files/Digital%20Personal%20Data%20Protection%20Act%202023.pdf> accessed 18 August 2023.
77 ‘Data principal’ refers to individuals to whom the personal data relates; DPDP Act, Section 2(j).
78 DPDP Act, Sections 3(a) and (b).
79 DPDP Act, Section 3(c).
80 DPDP Act, Preamble.
81 Beatriz Kira, Vikram Sinha, Sharmadha Srinivasan, ‘Regulating digital ecosystems: bridging the gap

between competition policy and data protection’ in Industrial and Corporate Change 30 (Oxford
University Press, 2021) <https://academic.oup.com/icc/article/30/5/1337/6356942> accessed 11
August 2023.
82 Standing Committee Report (2022), p. 7.
83 Draft NDGFP, para 6.10.
84 Draft NDGFP, para 6.13.
85 Draft NDGFP, para 6.11.

MeitY,‘Proposed
Digital
India
Act,
2023’
(9
March
2023)
<https://www.meity.gov.in/writereaddata/files/DIA_Presentation%2009.03.2023%20Final.pdf>
accessed 1 August 2023.
86

87 CPA 2019, Section 2(47). Unfair trade practices include making false and misleading representations

regarding goods and services, manufacturing of spurious goods, etc.
88 CPA 2019, Section 2(41)(ii).
89 CPA 2019, Section 2(47)(ix). Such disclosure would be an unfair trade practice except if it is done inaccordance with the provisions of any law.
90 E-commerce Rules, 2020, Rule 4(11)(a).

197

91 E-commerce Rules, 2020, Rule 5(4).
92 E-commerce Rules, 2020, Rule 5(3)(f).

E-commerce Rules, 2020, Rule 6(1) read with CPA 2019, Section 2(47). This would include thedisclosure of a user’s personal information to a third party (except in accordance with the provisions of
any law).
93

94 CPA 2019, Section 2(13).
95 Direct Selling Rules, 2021, Rule 10.
96 Direct Selling Rules, 2021, Rule 5(3).
97 Direct Selling Rules, 2021, Rule 5(5).
98 The Committee was informed that the Ministry of Commerce and Industry is in the process ofrevising the Draft E-Commerce Policy.
99 RBI PPI Master Direction, para 11.4.4.
100 RBI PPI Master Direction, para 11.4.5.
101 NPCI, ‘About Us’ <https://www.npci.org.in/who-we-are/about-us> accessed on 31 May 2023.
102 NPCI, ‘Unified Payments Interface (UPI) Product Overview’ <https://www.npci.org.in/what-we-

do/upi/product-overview> accessed on 31 May 2023.
103 ‘NPCI in talks with RBI on 30% UPI volume cap deadline, to consider industry request for extension’(ET
Government,
22
November2022)<https://government.economictimes.indiatimes.com/news/governance/npci-in-talks-with-rbi-on30-upi-volume-cap-deadline-to-consider-industry-request-for-extension/95683059> accessed 4 June
2023.
NPCI
UPI
Guidelines(5
November
2020)<https://www.npci.org.in/PDF/npci/upi/circular/2022/UPI-OC-159-Guidelines-on-volume-capfor-Third-Party-App-Providers-(TPAPs)-in-UPI.pdf> accessed on 31 May 2023.
104

105 A PSP is a bank which connects to the UPI platform for availing the UPI payment facility. It engages

TPAPs to make their UPI payment app available to end users and merchants. It is also responsible forauthenticating end-users through its own app or the TPAP’s app. NPCI, ‘UPI Roles & Responsibilities’<https://www.npci.org.in/what-we-do/upi/roles-responsibilities> accessed on 31 May 2023.
106 A TPAP is a service provider which provides the app for facilitation of UPI-based payments by end

users. NPCI, ‘UPI Roles & Responsibilities’ <https://www.npci.org.in/what-we-do/upi/rolesresponsibilities> accessed on 31 May 2023.
107 NPCI UPI Guidelines.

NPCI, ‘Standard Operating Procedure (SOP) – Market Share Cap for Third Party Application
Providers(TPAP)’
(25
March
2021)
<https://www.npci.org.in/PDF/npci/upi/circular/2021/standard-operating-procedure-sop–
market-share-cap-for-third-party-application-providers-tpap.pdf> accessed on 31 May 2023.
108

109 Standing Committee Report (2022), p. 40 – 54.

198

110 Amber Darr has comparatively analysed policy diffusion for South Asian emerging countries onmodern competition law. See Amber Darr, Competition Law in South Asia, (Cambridge University Press,
February 2023).
111 Please note that while the information presented in Chapter 3 is comprehensive and up-to-date as of

19th July 2023, significant developments have occurred since. Specifically, the sections covering theDigital Markets, Competition and Consumers Bill (DMCC) in the UK, the 11 th Amendment to the Act
on Restraint of Competition (ARC) in Germany, and the Digital Platforms Services Inquiry (DPSI) in
Australia have been updated to incorporate key changes that have taken place until 5 th February 2024.
112 Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 oncontestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU)2020/1828(DigitalMarkets
Act)<https://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=CELEX:32022R1925> accessed 3 June 2023.
European Commission, ‘About the Digital Markets Act’ <https://digital-marketsact.ec.europa.eu/aboutdma_en#:~:text=The%20DMA%20entered%20into%20force,and%20provide%20all%20relevant%20inf
ormation.> accessed 9 February 2024.
113

The Digital Competition Expert Panel, ‘Unlocking Digital Competition: Report of the Digital
Competition
ExpertPanel’(March2019)<https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/785547/unlocking_digital_competition_furman_review_web.pdf> accessed 5 June 2023.
114

CMA, ‘Online platforms and digital advertising: Market study final report’ (1 July 2020) p. 5
<https://assets.publishing.service.gov.uk/media/5fa557668fa8f5788db46efc/Final_report_Digital_A
LT_TEXT.pdf> accessed 5 June 2023.
115

Draft DMCC <https://bills.parliament.uk/publications/53073/documents/4037> accessed 5
February 2024.
116

117 UK Parliament, “Parliamentary Bills: Digital Markets, Competition and Consumers Bill - Committee

stage” <https://bills.parliament.uk/bills/3453/stages/18121> accessed 6 February 2024.
118 FCO Press Release, ‘Amendment of the German Act against Restraints of Competition’ (19 January2021)<https://www.bundeskartellamt.de/SharedDocs/Publikation/EN/Pressemitteilungen/2021/19_01_2021_GWB_Novelle.pdf;jsessionid=FFA0A376F5113E10543FB440B523C653.2_cid362?__blob=publica
tionFile&v=3> accessed 5 June 2023. (“FCO Press Release”)
119 ARC, Section 32f.
120 ‘New Epoch in German Antitrust Law: Far-reaching New Powers of Intervention for the Federal

Cartel Office’ (Norton Rose Fulbright, November 2023) <https://www.nortonrosefulbright.com/enau/knowledge/publications/baffeb04/new-epoch-in-german-antitrust-law-far-reaching-newpowers-of-intervention-for-the-federal> accessed 5 February 2024. (“Norton Rose Fulbright – 11th
Amendment”)
121 ARC, Section 32g.
122 For a more detailed overview of these twelve Bills, refer to the subchapter on United States.
123 AICO <https://www.congress.gov/bill/117th-congress/house-bill/3816/text> accessed 21 June

2023.

199

EPM <http://www.congress.gov/bill/117th-congress/house-bill/3825/text> accessed 23 June
2023.
124

125 OAM <http://www.congress.gov/bill/117th-congress/senate-bill/2710/text> accessed 23 June2023.
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126

127 White House Executive Order (9 July 2021) <www.whitehouse.gov/briefing-room/presidential-

actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy> accessedon 23 June 2023.
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SDP
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ms/pdf/1012_001d.pdf> accessed 3 June 2023.
129

Japan
Ministerial
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130

131 Cabinet Order No. 17 - Cabinet Order for Stipulating the Business Category and Scale under in

Article 4, paragraph (1) of the Act on Improving Transparency and Fairness of Digital Platforms (1August2022)<https://www.meti.go.jp/english/policy/mono_info_service/information_economy/digital_platfor
ms/pdf/1012_001b.pdf> accessed 3 June 2023. (“Cabinet Order No. 17”)132 CCA <https://www.legislation.gov.au/Details/C2021C00151> accessed 15 July 2023.

CCA,
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uses.pdf> accessed 15 July 2023.
133

134 Australian Government, Federal Register of Legislation, Treasury Laws Amendment (News Media

andDigitalPlatforms
Mandatory
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ACCC,
Interim
ReportNo.
5–Regulatory
reform’(September<https://www.accc.gov.au/system/files/Digital%20platform%20services%20inquiry%20%20September%202022%20interim%20report.pdf> accessed 15 July 2023.
135

2

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ACCC, “Digital platform services inquiry 2020-25” <https://www.accc.gov.au/inquiries-andconsultations/digital-platform-services-inquiry-2020-25> accessed 5 February 2024.
136

AML
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137

at

138 State Council, People’s Republic of China, ‘Draft rules aim to curb monopolistic behavior of internet

platforms’(14

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200

2020)

<http://english.www.gov.cn/policies/policywatch/202011/14/content_WS5faf2a06c6d0f7257693fb9
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Draft Classification Guidelines; unofficial translated version is available at:<https://www.ianbrown.tech/2021/11/01/chinas-new-platform-guidelines/> accessed 19 July 2023.
139

Draft Responsibility Guidelines; unofficial translated version is available at:https://www.ianbrown.tech/2021/11/01/chinas-new-platform-guidelines/> accessed 19 July 2023.
140

141 MRFTA <https://elaw.klri.re.kr/eng_service/lawView.do?hseq=61424&lang=ENG> accessed 23

June 2023.
App-Store
Act<https://www.law.go.kr/LSW/eng/engLsSc.do?query=TELECOMMUNICATIONS+BUSINESS+A
CT#liBgcolor1> accessed 23 June 2023.
142

Review
Guidelines<https://www.ftc.go.kr/solution/skin/doc.html?fn=1970be9e561a08552bc21061944be980fcc066254c99af9eb3e272e25a802d4c&rs=/fileupload/data/result//news/report/2023/> accessed 23 June 2023.
The
unofficialtranslated
versionisavailableat:<https://competition.tistory.com/entry/platformguidelines20230112> accessed 17 July 2023.
143

144 Kim & Chang, ‘KFTC Releases its Proposed Amendments to the E-Commerce Act’ (9 March 2021)<https://www.kimchang.com/en/insights/detail.kc?sch_section=4&amp;idx=22891> accessed on 15
July 2023.
145 European Parliament, Committee on the Internal Market and Consumer Protection, ‘Mission Report’(26 January 2023) p. 4 <https://www.europarl.europa.eu/doceo/document/IMCO-CR739571_EN.pdf> accessed 23 June 2023. (“Mission Report – South Korea”)
146 Henry Mostyn and Bianca Buzatu, ‘Digital Markets Regulation Handbook: South Korea’ (Cleary

Gottlieb,
December2022)<https://www.clearygottlieb.com//media/files/rostrum/south%20korea/22092308%20digital%20markets%20regulation%20handbook
r16south%20korea> accessed 23 June 2023.
The Competition Act R.S.C., 1985, c. C-34 <https://laws-lois.justice.gc.ca/eng/acts/c-34/page1.html#h-87829> accessed 23 June 2023.
147

Bill C-19, The Online Streaming Act <https://www.parl.ca/DocumentViewer/en/44-1/bill/C19/royal-assent> accessed 9 February 2024.
148

149 Canada Bureau, ‘Important amendments to the Competition Act come into effect’ (24 June 2022)<https://www.canada.ca/en/competition-bureau/news/2022/06/important-amendments-to-thecompetition-act-come-into-effect.html> accessed 19 July 2023.
Government of Canada, ‘Online Streaming Act’ <https://www.canada.ca/en/canadianheritage/services/modernization-broadcasting-act.html> accessed 19 July 2023.
150

151 Bill C-18, the Online News Act <https://www.parl.ca/DocumentViewer/en/44-1/bill/C-18/royal-

assent> accessed 9 February 2024.
Government of Canada, “Online Streaming Act” <https://www.canada.ca/en/canadianheritage/services/modernization-broadcasting-act.html> accessed 19 July 2023.
152

Government of Canada, ‘The Online News Act’ <https://www.canada.ca/en/canadianheritage/services/online-news.html> accessed 9 February 2024.
153

201

154 Bill C-18, the Online News Act, Section 93.

Canada Bureau, ‘The Competition Bureau’s Strategic Vision for 2020-2024’ (11 February 2020)<https://ised-isde.canada.ca/site/competition-bureau-canada/en/how-we-fostercompetition/education-and-outreach/publications/competition-digital-age> accessed 19 July 2023.
155

156 Canada Bureau, ‘Our Structure’ <https://ised-isde.canada.ca/site/competition-bureau-

canada/en/how-we-foster-competition/our-organization/our-structure> accessed 19 July 2023.
157 Canada Bureau, ‘Canada Needs More Competition: takeaways from the Competition and Growth

Summit’ (2021) <https://ised-isde.canada.ca/site/competition-bureau-canada/en/how-we-fostercompetition/education-and-outreach/publications/canada-needs-more-competition-takeawayscompetition-and-growth-summit> accessed 19 July 2023.
158 The Honourable Howard Wetston, Senator (Ontario), ‘Re: Consultation Invitation - Examining theCanadianCompetition
Act
in
the
DigitalEra’(27<https://sencanada.ca/media/368379/letter-pdf.pdf> accessed 19 July 2023.

October2021)

159 Edward M. Iacobucci, ‘Examining the Canadian Competition Act in the Digital Era’ (27 September2021) <https://sencanada.ca/media/368377/examining-the-canadian-competition-act-in-the-digitalera-en-pdf.pdf> accessed 19 July 2023.
160 Canada Bureau, “Examining the Canadian Competition Act in the Digital Era: Submission by theCompetition Bureau” (8 February 2022) <https://ised-isde.canada.ca/site/competition-bureaucanada/en/how-we-foster-competition/promotion-and-advocacy/regulatory-adviceinterventionscompetition-bureau/examining-canadian-competition-act-digital-era> accessed 19 July 2023.
161 Canada Bureau, ‘The Future of Competition Policy in Canada: Submission by the Competition

Bureau’ (15 March 2023) <https://ised-isde.canada.ca/site/competition-bureau-canada/en/how-wefoster-competition/promotion-and-advocacy/regulatory-adviceinterventions-competitionbureau/future-competition-policy-canada#wb-tphp> accessed 19 July 2023.
Department of Industry, ‘The Future of Competition Policy in Canada’ (2022) <https://isedisde.canada.ca/site/strategic-policy-sector/en/marketplace-framework-policy/competitionpolicy/future-competition-policy-canada> accessed 19 July 2023.
162

The
Fair
Trade
Act
<https://www.ftc.gov.tw/internet/english/doc/docDetail.aspx?uid=644&docid=15182> accessed 19
July 2023.
163

TFTC, ‘The TFTC released the "White Paper on Competition Policy in the Digital Economy’<https://www.ftc.gov.tw/internet/english/doc/docDetail.aspx?uid=1942&docid=17352> accessed
19 July 2023.
164

165 CA-04 <https://sso.agc.gov.sg/Act/CA2004?WholeDoc=1> accessed 19 July 2023.
166 CCCS, ‘Competition Act and Guidelines’ <https://www.cccs.gov.sg/legislation/competition-act>

accessed 19 July 2023.
167 CCCS, ‘CCCS Revises Competition Guidelines for Greater Clarity and Guidance’ (31 December 2021)<https://www.cccs.gov.sg/media-and-consultation/newsroom/media-releases/cccs-revisescompetition-guidelines-for-greater-clarity-and-guidance> accessed 19 July 2023.

202168 Committee on the Future

Economy, ‘Report of the Committee on the Future Economy’ (2017)<https://sustainabledevelopment.un.org/content/documents/1529Committee_on_the_Future_Econ
omy_Report.pdf> accessed 19 July 2023.
169 CCCS, ‘CCCS proposes Guidelines on Price Transparency after Online Travel Study raises Consumer

Protection
Concerns’(30
September
2019)<https://www.cccs.gov.sg/media-andconsultation/newsroom/media-releases/otb-and-price-transparency-guidelines-30-sept-19> accessed
19 July 2023; CCCS, ‘Online Travel Booking Sector in Singapore: Findings and Recommendations’(2019)<https://www.cccs.gov.sg/-/media/custom/ccs/files/media-andpublications/publications/market-studies/cccs-market-study-report-online-travel-booking-30-sep2019.ashx> accessed 19 July 2023.
CCCS, ‘CCCS Market Study on E-commerce Platforms Recommends Update to Competition
Guidelines’(10
September
2020)<https://www.cccs.gov.sg/media-andconsultation/newsroom/media-releases/cccs-market-study-on-e-commerce-platforms-recommendsupdate-to-competition-guidelines> accessed 19 July 2023.
170

171 Personal Data Protection Commission in collaboration with the CCCS, ‘Discussion Paper on Data

Portability: Personal Data Protection Commission In collaboration with Competition and Consumer
CommissionofSingapore’(25
February
2019)<https://www.cccs.gov.sg/resources/publications/occasional-research-papers/pdpc-cccs-dataportability> accessed 19 July 2023.
172 Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 oncontestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU)2020/1828(DigitalMarkets
Act)<https://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=CELEX:32022R1925> accessed 3 June 2023.
173 The Digital Services Act Package, introduced in December 2020, comprises of the Digital Services

Act and the DMA. Together, these laws seek to create a coherent regulatory framework governing
digital enterprises and digital services. The Digital Services Act aims to create a safe online environment
for users and companies by setting rules on countering illegal content, ensuring fundamental rights ofdigital users, prescribing transparency measures for recommendatory algorithms, and additional
compliance standards for platforms. In contrast, the DMA aims to create a level playing field forparticipants in the digital market. To this end, it sets out criteria to identify Gatekeepers and imposes
obligations on Gatekeepers to prevent anti-competitive practices such as self-preferencing, tying andbundling, pre-installations, and to encourage conduct such as interoperability, access to non-publicdata generated by business users and choice screens. See European Council, ‘Digital Services Package’(26 October 2022) <https://www.consilium.europa.eu/en/policies/digital-services-package/>accessed 23 June 2023.
174 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on theprotection of natural persons with regard to the processing of personal data and on the free movementof such data, and repealing Directive 95/46/EC (General Data Protection Regulation) <https://eurlex.europa.eu/eli/reg/2016/679/oj> accessed 3 June 2023.
175 Regulation (EU) 2019/1150 of the European Parliament and of the Council of 20 June 2019 on

promoting fairness and transparency for business users of online intermediation services <https://eurlex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32019R1150> accessed 3 June 2023.
176 Consolidated Version of the Treaty on the Functioning of the European Union (2012/C 326/01), C

326/47,(26
October
2012)<https://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2012:326:FULL:EN:PDF> accessed 3 June 2023.

203

Case
AT.39740Google
Search(Shopping)
(27
June
2017)
<https://ec.europa.eu/competition/antitrust/cases/dec_docs/39740/39740_14996_3.pdf> accessed 3
June 2023.
177

Case
AT.40099Google
Android
(18
July
2018)
<https://ec.europa.eu/competition/antitrust/cases/dec_docs/40099/40099_9993_3.pdf> accessed 3
June 2023.
178

Case
AT.40411Google
Search(AdSense)
(20
March
2019)
<https://ec.europa.eu/competition/antitrust/cases/dec_docs/40411/40411_1619_11.pdf> accessed 3
June 2023.
179

Case AT.40462- Amazon Marketplace and AT 40703 – Amazon Buy Box (20 December 2022)<https://ec.europa.eu/competition/antitrust/cases1/202310/AT_40462_8990760_8322_4.pdf>
accessed 3 June 2023.
180

Case
AT.40684Facebook
Marketplace(19
December2022)<https://ec.europa.eu/commission/presscorner/detail/en/ip_22_7728> accessed 3 June 2023.
181

182 EC, Commission Decision on setting up the High-Level Group for the Digital Markets Act, Article 4

(23
March
2023)
<https://competition-policy.ec.europa.eu/system/files/202303/High_Level_Group_on_the_DMA_0.pdf> accessed 3 June 2023.
183 DMA, Article 54.
184 DMA, Article 2(2).
185 DMA, Article 19(1).
186 DMA, Article 3(3). Requires undertakings that meet the thresholds to self-assess and notify the EC

upon meeting such thresholds.
187 DMA, Article 3(8). The EC takes into account some or all of the following elements while exercising

its residuary powers in designating an undertaking as a ‘Gatekeeper’: (i) size, including turnover andmarket capitalisation, operations and position of the undertaking; (ii) number of business users using
the core platform service to reach end users and the number of end users; (iii) network effects and data
driven advantages; (iv) any scale and scope effects from which the undertaking benefits, including withregard to data, and, where relevant, to its activities outside the EU; (iv) business user or end user lockin; (v) conglomerate corporate structure or vertical integration of that undertaking which may enablecross-subsidisation, combining data from different sources or leveraging of its position; or (g)otherstructural business or service characteristics.
188 DMA, Article 3(1).
189 DMA, Article 3(2)(a).
190 DMA, Article 3(2)(b).
191 Tambiama Madiega, ‘Briefing: EU Legislation in Progress- Digital Services Act’ (November 2022)

EuropeanParliamentary
Research
Service,p.
8<https://www.europarl.europa.eu/RegData/etudes/BRIE/2021/689357/EPRS_BRI(2021)689357_E
N.pdf> accessed 3 June 2023.
192 DMA, Article 3(2)(c).
193 DMA, Article 13(1).

204194 DMA, Article 3(3).
195 DMA, Article 3(5). The quantitative threshold must be seen as an aid to facilitate interpretation of

the qualitative threshold, and sets out a rebuttable presumption which the entity may argue against.
196 DMA, Article 3(4).
197 DMA, Article 3(9).
198 DMA, Article 4(2).
199 DMA, Article 4(1).
200 DMA, Articles 5(7) and 5(8).
201 DMA, Article 6(6).
202 DMA, Article 6(4).
203 DMA, Article 5(3).
204 DMA, Article 6(5).
205 DMA, Article 5(2).
206 DMA, Article 6(2).
207 DMA, Article 6(4).
208 DMA, Article 6(7).
209 DMA, Article 6(5).
210 DMA, Article 6(3).
211 DMA, Article 6(9).
212 DMA, Article 6(10).
213 DMA, Article 6(11).
214 DMA, Article 7(1).
215 DMA, Article 7(2).
216 DMA, Article 9(1).
217 DMA, Article 10.
218 DMA, Articles 9(2) and 10(2).
219 DMA, Article 18(1). Article 18(3) clarifies that an entity can be said to engage in systematic non-compliance if the EC has given 3 non-compliance decisions against the Gatekeeper regarding any of its
core platform services in the past 8 years prior to commencement of this market investigation.

205

220 DMA, Article 18(1).
221 DMA, Article 19(1).
222 DMA, Article 28(1).
223 DMA, Article 28.
224 DMA, Article 21.
225 DMA, Article 21.
226 DMA, Article 23.
227 EC, ‘Sneak peek: how the Commission will enforce the DSA & DMA - Blog of Commissioner Thierry

Breton’ (5 July 2022) <https://ec.europa.eu/commission/presscorner/detail/en/statement_22_4327>
accessed 3 June 2023.
228 EC, ‘Sneak peek: how the Commission will enforce the DSA & DMA - Blog of Commissioner Thierry

Breton’ (5 July 2022) <https://ec.europa.eu/commission/presscorner/detail/en/statement_22_4327>
accessed 3 June 2023.
229 DMA, Article 16(5) and Article 37(2).
230 DMA, Article 29(1)(a).
231 DMA, Article 29(1)(c) and (d).
232 DMA, Article 30(1).
233 DMA, Article 18.
234 DMA, Article 18(3).
235 DMA, Article 18(1).
236 DMA, Article 18(2).
237 DMA, Article 30(2).
238 DMA, Article 30(3).
239 DMA, Article 31(1).
240 Council Regulation (EC) No. 139/2004 of 20 January 2004 on the control of concentrations between

undertakings(The
EC
MergerRegulation)<https://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=CELEX:32004R0139&qid=1687531982403> accessed 23 June 2023.
241 DMA, Article 14.
242 DMA, Article 30(3)(c).
243 DMA, Article 18(2).
244 CA-98 <https://www.legislation.gov.uk/ukpga/1998/41/contents> accessed 5 June 2023.

206

CMA, ‘How the CMA investigates competition and consumer issues’ (September 2014)<https://www.gov.uk/government/collections/how-the-cma-investigates-competition-andconsumer-issues> accessed 5 June 2023.
245

CA-98,
Section<https://www.legislation.gov.uk/ukpga/1998/41/part/I/chapter/II/crossheading/theprohibition> accessed 5 June 2023.
246

18(1)

HM
Treasury,‘DigitalCompetition
ExpertPanel’
(13
March
2019)
<https://www.gov.uk/government/collections/digital-competition-expert-panel> accessed 5 June
2023.
247

HM
Treasury,‘DigitalCompetition
ExpertPanel’
(13
March
2019)
<https://www.gov.uk/government/collections/digital-competition-expert-panel> accessed 5 June
2023.
248

The Digital Competition Expert Panel, ‘Unlocking Digital Competition: Report of the Digital
Competition
ExpertPanel’(March2019),
p.
84<https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/785547/unlocking_digital_competition_furman_review_web.pdf> accessed 5 June 2023.
249

250 Government of UK, ‘Guidance - Digital markets taskforce: terms of reference’ (11 March 2020) <https://www.gov.uk/government/publications/digital-markets-taskforce-terms-ofreference/digital-markets-taskforce-terms-of-reference--3> accessed 5 June 2023.
251 Government of UK, ‘Digital Markets Taskforce’ (3 April 2020) <https://www.gov.uk/cma-cases/digital-markets-taskforce> accessed 10 July 2023.
252 Though the UK DMU has been established under the CMA in shadow form in 2021, the DMCC does

not specifically mention its role in the new competition regime.
CMA, ‘Online platforms and digital advertising: Market study final report’ (1 July 2020) p. 5
<https://assets.publishing.service.gov.uk/media/5fa557668fa8f5788db46efc/Final_report_Digital_A
LT_TEXT.pdf> accessed 5 June 2023.
253

Department for Digital Culture Media and Sport and the Department for Business, Energy andIndustrial Strategy, ‘A new pro-competition regime for digital markets’ (July 2021)<https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1003913/Digital_Competition_Consultation_v2.pdf> accessed 5 June 2023.
254

255 The Government of UK, ‘Government response to the consultation on a new pro-competition regime

for
digitalmarkets’(May2022)<https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1073164/E02740688_CP_657_Gov_Resp_Consultation_on_procomp_digital_markets_Accessible.pdf> accessed 5 June 2023.
256 DMCC <https://bills.parliament.uk/publications/53073/documents/4037> accessed 5 February

2024.
257 DMCC, Section 2(1)(a).
258 DMCC, Section 4.
259 DMCC, Section 3(1).
260 DMCC, Section 2(1).

207

261 DMCC, Section 2(1)(a) read with Section 4.
262 DMCC, Section 2(1)(b) and Section 2(2)(a) read with Section 5.
263 DMCC, Section 2(1)(b) and Section 2(2)(b) read with Section 6.
264 DMCC, Section 2(3) read with Section 7.
265 DMCC, Section 7(2).
266 DMCC, Section 7(1).
267 DMCC, Section 5.
268 DMCC, Sections 5(a) and (b).
269 DMCC, Section 6(1).
270 DMCC, Section 9.
271 DMCC, Section 9(2).
272 DMCC, Section 9(1).
273 DMCC, Section 18(1).
274 DMCC, Section 10.
275 DMCC, Section 10(1). The CMA must begin a further SMS investigation in relation to the designationof an SMS entity in respect of a relevant digital activity not later than 9 months before the end of thedesignation period, if it is not already carrying one out at that time; DMCC, Section 10(2).
276 DMCC, Section 10(3).
277 DMCC, Section 10(3).
278 DMCC, Section 10(3).
279 DMCC, Section 10(4).
280 DMCC, Section 17(1).
281 DMCC, Section 19.
282 DMCC, Section 19(9) read with Section 20.
283 DMCC, Section 19(5).
284 DMCC, Section 19(6).
285 DMCC, Section 19(7).
286 DMCC, Section 19(8)(a).
287 DMCC, Section 19(8)(b).

208

288 DMCC, Sections 20(2) and 20(3).
289 DMCC, Section 20(2).
290 DMCC, Section 20(2)(a).
291 DMCC, Section 20(2)(b).
292 DMCC, Section 20(2)(c).
293 DMCC, Section 20(2)(d).
294 DMCC, Section 20(2)(e).
295 DMCC, Section 20(3).
296 DMCC, Section 20(3)(a).
297 DMCC, Section 20(3)(b).
298 DMCC, Section 20(3)(c).
299 DMCC, Section 20(3)(d).
300 DMCC, Section 20(3)(e).
301 DMCC, Section 20(3)(g).
302 DMCC, Section 20(3)(f).
303 DMCC, Section 20(3)(h).
304 DMCC, Section 29(1).
305 DMCC, Sections 29(2)(a) and (b).
306 DMCC, Sections 29(2)(c) and (d).
307 DMCC, Section 26(1).
308 DMCC, Section 26(3).
309 DMCC, Section 57.
310 DMCC, Section 84(1) read with Section 83(3)(a).
311 DMCC, Sections 46 and 47.
312 DMCC, Section 46(1).
313 DMCC, Section 56(1).
314 DMCC, Section 85.
315 DMCC, Section 87.

209316 DMCC, Sections 86(2) and 88(2).
317 DMCC, Section 86(5).
318 DMCC, Section 86(4)(a).
319 DMCC, Section 86(5).
320 DMCC, Section 86(4)(b).
321 DMCC, Section 86(4)(c).
322 DMCC, Section 86(3).
323 DMCC, Section 87(1).
324 DMCC, Sections 87(2) and 87(3). ‘Individual’ may refer to senior manager or nominated officer of anundertaking.
325 DMCC, Section 88.
326 DMCC, Section 88(3)(a).
327 DMCC, Section 88(3)(b).
328 DMCC, Section 88(3)(c).
329 DMCC, Section 88(5)(a).
330 DMCC, Section 88(5)(b).

DMCC, Section 99. Failure to comply with the conduct requirement or the pro-competitioninterventions may result in the directors of the undertaking being disqualified.
331

332 DMCC, Section 46(1).
333 DMCC, Section 46(3).
334 DMCC, Section 51(3).
335 DMCC, Section 51(4).
336 ARC <https://www.gesetze-im-internet.de/englisch_gwb/englisch_gwb.html#p0026> accessed 5

June 2023.
337 Federal Ministry for Economic Affairs and Climate Action, ‘Bundeskartellamt (Federal Cartel Office)(BKartA)’<https://www.bmwk.de/Redaktion/EN/Artikel/Ministry/bundeskartellamt-bkarta.html> accessed
5 June 2023.
338 ARC, Sections 18(1) and (5) read with Section 19(1).
339 ARC, Sections 20(1) and 20(3).
340 ARC, Section 20.

210

341 ARC, Section 20(1).
342 Think Tank Internet, Bundeskartellamt, ‘Working paper - Market power of platforms and networks’(6
September
2016)<https://www.bundeskartellamt.de/SharedDocs/Publikation/DE/Berichte/Think-TankBericht.html;jsessionid=78759BAE7A757AF16DCE980D73DF000C.2_cid362?nn=10321672> accessed 5
June 2023; Autorité de la concurrence and the FCO, ‘Competition Law and Data’ (10 May 2016)<https://www.bundeskartellamt.de/SharedDocs/Publikation/DE/Berichte/Big%20Data%20Papier.
pdf?__blob=publicationFile&v=2> accessed 5 June 2023; Autorité de la concurrence and the FCO,
‘Algorithms
andCompetition’(November
2019)<https://www.bundeskartellamt.de/SharedDocs/Publikation/EN/Berichte/Algorithms_and_Com
petition_Working-Paper.pdf?__blob=publicationFile&v=5> accessed 5 June 2023.
343 Norton Rose Fulbright, “German competition law update: New revised act against restraints ofcompetition
enteredinto
force”(June
2018)<https://www.nortonrosefulbright.com/en/knowledge/publications/d11d3849/germancompetition-law-update-new-revised-act-against-restraints-of-competition-entered-intoforce#:~:text=On%209%20June%202017%2C%20the,by%20EU%20Damages%20Directive%20(No.>accessed 18 July 2023.
344 ARC, Section 18(2a).
345 ARC, Section 18(3a).
346 FCO Press Release.
347 Federal Ministry for Economic Affairs and Energy, ‘A new competition framework for the digital

economy: Report by the Commission ‘Competition Law 4.0’’ (September 2019)<https://www.bmwk.de/Redaktion/EN/Publikationen/Wirtschaft/a-new-competition-frameworkfor-the-digital-economy.pdf?__blob=publicationFile&v=1> accessed 5 June 2023.
348 FCO Press Release.
349 FCO Press Release.
350 FCO Press Release.
351 ARC, Section 19a(1) read with Section 18(3a).
352 ARC, Section 19a(1).
353 ARC, Section 19a(1).
354 ARC, Section 19a(1).
355 ARC, Section 19a(2) no.1.
356 ARC, Section 19a(2) no. 2.
357 ARC, Section 19a(2) no. 3.
358 ARC, Section 19a (2) no. 4.
359 ARC, Section 19a(2) no. 5.

211360 ARC, Section 19a(2) no. 6.
361 ARC, Section 19a(2) no. 7.
362 ARC, Section 19a(2).
363 ARC, Section 19a(2).
364 ARC, Section 32a(1). See also FCO Press Release.
365 ARC, Section 32a(1).
366 ARC, Section 73(5). See also FCO Press Release.
367 ARC, Section 81(2) no. 2a).
368 ARC, Section 81c(1).
369 ARC, Section 81c(2).
370 ARC, Sections 32(1) and 32(2).
371 ARC, Section 32(2).
372 ARC, Section 32(2a).
373 ARC, Section 32f.
374 Norton Rose Fulbright – 11th Amendment.
375 ARC, Section 32g.
376 Norton Rose Fulbright – 11th Amendment.
377 Sherman Act, Section 1 (15 U.S.C. §1).
378 Sherman Act, Section 2 (15 U.S.C. §2).
379 Clayton Act, Section 7 (15 U.S.C. §18).
380 FTCA, Section 1 (15 U.S.C. §41).

FTC, “The Enforcers” <https://www.ftc.gov/advice-guidance/competition-guidance/guideantitrust-laws/enforcers> accessed 21 June 2023.
381

382 The US Supreme Court has defined monopoly power as “the power to control prices or exclude

competition”. See United States v. E. I. du Pont de Nemours & Co. (Cellophane), 351 U.S. 377, 391 (1956)<https://supreme.justia.com/cases/federal/us/351/377/#F18> accessed 21 June 2023.
383

FTC
v.
Facebook,Inc.,No.
1:20-cv-03590-JEB(8September<https://www.ftc.gov/system/files/documents/cases/2021-0908_redacted_substitute_amended_complaint_ecf_no._82.pdf> accessed 21 June 2023.

2021)

FTC
v.
Facebook,Inc.,No.
1:20-cv-03590-JEB(8September<https://www.ftc.gov/system/files/documents/cases/2021-0908_redacted_substitute_amended_complaint_ecf_no._82.pdf> accessed 21 June 2023.

2021)

384

212

UnitedStatesv.
GoogleLLC,
No.
1:20-cv-03010-APM(15January2021)<https://www.justice.gov/atr/case-document/file/1428271/download> accessed 21 June 2023.
385

386 Complaint, District of Columbia v. Amazon.com, Inc. (In the Superior Court of the District ofColumbia, Civil Division, 25 May 2021) <https://oag.dc.gov/sites/default/files/2021-05/AmazonComplaint-.pdf> accessed 21 June 2023.
387 HJC Subcommittee Investigation (2022).
388 The US Supreme Court clarified the meaning of market power and stated that it is “the ability toraise prices above those that would be charged in a competitive market”. See NCAA v. Bd. of Regents
of
the
Univ.
of
Okla.,
468
U.S.
85,
109
n.38
(1984)<https://supreme.justia.com/cases/federal/us/468/85/> accessed 21 June 2023.
These recommendations include prohibiting dominant entities from abusing their superiorbargaining power, facilitating data access through interoperability and portability measures,
implementing non-discrimination rules to prevent self-preferencing, and considering structural
separations in certain businesses to reduce conflicts of interest and predatory practices. See HJC
Subcommittee Investigation (2022).
389

390 The 12 legislative proposals are still at the draft stage. They are under review by the House Judiciary

Committee or the Houses of Congress and are subject to frequent revisions. The versions of the Bills as
on 20 June 2023 have been considered for the purposes of this Report.
AICO <https://www.congress.gov/bill/117th-congress/house-bill/3816/text> accessed on 21
June 2023.
391

392 AICO, Sections 2(d) and 2(g)(4). A ‘Covered Platform’ is an online platform that has been designatedas such or:(a) has at least 50 million US-based monthly active users or 100,000 US-based monthly active
business users at any given time during the 12 months preceding a designation or filing of acomplaint for alleged violation under the AICO;(b) is owned or controlled by a person with US net annual sales or market capitalisation greaterthan USD 600,000,000,000 at any given time during the 2 years preceding a designation or filingof a complaint for alleged violation under the AICO; and(c) is a critical trading partner for sale or provision of any product or service offered on or directly
related to the online platform.
393 AICO, Preamble.
394 AICO, Sections 2(a) read with 2(f)(2)(D).
395 AICO, Section S 2(b)(2).
396 AICO, Section 2(b)(3).
397 AICO, Section 2(b)(4).
398 AICO, Section 2(b)(5).
399 AICO, Section 2(d)(3).
400 AICO, Section 2(c)(1) – (3).

213401 The term ‘Covered Platform operators’ has not been defined in AICO, but it has been defined in EPM

as a person that, directly or indirectly, owns or controls a Covered Platform. See EPM, Section 5(6).
402 AICO, Sections 2(f)(1)(A) and (B).

Such penalties will be calculated on the basis of a Covered
Platform operator’s revenue, and not the Covered Platform’s revenue.
403 AICO, Section 2(f)(2)(d).
404 AICO, Section 4(a).

EPM <http://www.congress.gov/bill/117th-congress/house-bill/3825/text> accessed 23 June
2023.
405

406 EPM, Section 5(5). A ‘Covered Platform’ is an online platform that has been designated as such or

a.
b.
c.

it has at least 50 million US-based monthly active users or 100,000 US-based monthly active
business users at the time of, or in any of the 12 months preceding a designation, or in any of
the 12 months preceding filing of a complaint for alleged violation under the EPM;
it is owned or controlled by a person with net annual sales or market capitalisation greater than
USD 600 billion at the time of, or in any of the 2 years preceding a designation, or in any of the
2 years preceding filing of a complaint for alleged violation under the EPM;
is a critical trading partner for sale or provision of any product or service offered on or directly
related to the online platform.

407 EPM, Preamble.
408 EPM, Section 5(6).
409 EPM, Section 2. A designated Covered Platform is not permitted to own, control, or have a beneficial

interest in a line of business other than the covered platform that (i) utilises the Covered Platform forthe sale or provision of products or services; (ii) offers a product or service that the Covered Platform
requires a business user to purchase or utilise as a condition for access to the Covered Platform, or as acondition for preferred status or placement of a business user’s product or services on the Covered
Platform; or (iii) gives rise to a conflict of interest.
410 EPM, Section 2.
411 EPM, Section 6(a).
412 EPM, Section 6(a)(1)(C). See EPM, Section 6(b)(1); The FTC or DOJ may consider removing the

Covered Platform designation before the lapse of that period if the covered platform operator showsthat it has ceased to be a ‘critical trading partner’. See also EPM, Section 5(7); An entity can be termed asa ‘critical trading partner’ when it can restrict a business user's ability to reach its users or customers,
or limit access to essential tools or services needed to effectively serve its users or customers.
413 EPM, Section 7(a). The petition for review of designation or order should be filed within 30 days of

issuance of such designation or order.
414 EPM, Section 3(b).
415 EPM, Sections 3(c)(1) and (2).
416 EPM, Section 3(d).
417 S. 2710, OAM <http://www.congress.gov/bill/117th-congress/senate-bill/2710/text> accessed 23

June 2023.

214

418 OAM, Section 2(3).
419 OAM, Section 3(a)(1).
420 OAM, Section 3(a)(2).
421 OAM, Section 3(a)(3).
422 OAM, Section 3(f).

Such access should be on terms that are functionally equivalent to the terms ofaccess by similar apps or functions provided by the Covered Company or to its business partners.
423 OAM, Section 4(a)(1).
424 OAM, Section 4(b).
425 OAM, Section 5(b)(1).
426 OAM, Section 5(b)(2).
427 See OAM, Section 5(3). This provision does not apply to developers of apps owned by, or under thecontrol of, a foreign state.
428 OAM, Section 5(a)(2).
429 Mark R. Warner, ‘Lawmakers Reintroduce Bipartisan Legislation to Encourage Competition in Social

Media’(PressRelease,
25
May
2022)
availableat<https://www.warner.senate.gov/public/index.cfm/2022/5/lawmakers-reintroduce-bipartisanlegislation-to-encourage-competition-in-social-media> accessed 20 June 2023; The ACCESS Act of 2022
<https://www.warner.senate.gov/public/_cache/files/f/a/fa171ce7-0ffe-4c4e-97e42119c22a7926/1F8A55612935322C453C41FB62CB8E5E.access-act-of-2022.pdf> accessed 20 June 2023.
430 ACCESS, Sections 2(7) and 2(8).
431

S.225
Competition
andAntitrust
Law
Enforcement
Reform<http://www.congress.gov/bill/117th-congress/senate-bill/225/text> accessed 23 June 2023.

Act

432

S.4258Competition
andTransparency
inDigitalAdvertising<http://www.congress.gov/bill/117th-congress/senate-bill/4258/text> accessed 23 June 2023.

Act

S.3267
Consolidation
Prevention
andCompetition
Promotion<http://www.congress.gov/bill/117th-congress/senate-bill/3267> accessed 23 June 2023.

Act

433

434 S.4201 - Digital Platform Commission Act <http://www.congress.gov/bill/117th-congress/senate-bill/4201/text> accessed 23 June 2023.
S.228 - Merger Filing Fee Modernization Act
congress/senate-bill/228/text> accessed 23 June 2023.
435<http://www.congress.gov/bill/117th-

S.3197 - Platform Competition and Opportunity Act <http://www.congress.gov/bill/117thcongress/senate-bill/3197/text> accessed 23 June 2023.
436

S.3847 - Prohibiting Anticompetitive Mergers Act <http://www.congress.gov/bill/117thcongress/senate-bill/3847/text> accessed 23 June 2023.
437

438 S.1074 - Trust-Busting for the Twenty-First Century Act <http://www.congress.gov/bill/117th-

congress/senate-bill/1074/text> accessed 23 June 2023.

215

439 White House Executive Order (2021).
440 White House Executive Order (2021).
441 White House Executive Order (2021), Section 4(a).
442 2010 Horizontal Merger Guidelines <https://www.justice.gov/atr/horizontal-merger-guidelines-

08192010>
accessed
23
June
2023;
and
2020
VerticalMergerGuidelines<https://www.ftc.gov/system/files/documents/reports/us-department-justice-federal-tradecommission-vertical-merger-guidelines/vertical_merger_guidelines_6-30-20.pdf> accessed 23 June
2023.
DOJ and FTC, ‘Request for Information on Merger Enforcement’ (18 January 2022)<https://downloads.regulations.gov/FTC-2022-0003-0001/content.pdf> accessed 23 June 2023; FTC,
‘Federal Trade Commission and Justice Department Seek to Strengthen Enforcement Against Illegal
Mergers’ (Press Release, 18 January 2022) <https://www.ftc.gov/news-events/news/pressreleases/2022/01/federal-trade-commission-justice-department-seek-strengthen-enforcementagainst-illegal-mergers> accessed 23 June 2023.
443

444 CCA <https://www.legislation.gov.au/Details/C2021C00151> accessed 15 July 2023.

CCA,
Bargaining
Code<https://www.accc.gov.au/system/files/Final%20legislation%20as%20passed%20by%20both%20ho
uses.pdf> accessed 15 July 2023. The Bargaining Code has been included as Part IVBA of the CCA.
445

Australian Government, Federal Register of Legislation, Treasury Laws Amendment (News Media
andDigitalPlatforms
Mandatory
Bargaining
Code)
Act,
2021,
Section2<https://www.legislation.gov.au/C2021A00021/asmade/text> accessed 5 February 2024.
446

ACCC,
‘Digital
Platforms
Inquiry:
Final
Report’<https://www.accc.gov.au/system/files/Digital%20platforms%20inquiry%20%20final%20report.pdf> accessed 16 July 2023.
447

(June

2019)

ACCC, ‘Digital platform services inquiry 2020-25’ <https://www.accc.gov.au/inquiries-andconsultations/digital-platform-services-inquiry-2020-25> accessed 5 February 2024.
448

449 ACCC, ‘Digital platforms services inquiry: Interim report 6: Report on social media services’ (March2023)<https://www.accc.gov.au/system/files/Digital%20platforms%20services%20inquiry%20%20Interim%20report%206%20-%20Report%20on%20social%20media%20services_0.pdf> accessed 5
February 2024.
450 ACCC, ‘Digital platform services inquiry: Interim report 7: Report on expanding ecosystems ofdigitalplatform
serviceproviders’<https://www.accc.gov.au/system/files/DPB%20-%20DPSI%20%20September%202023%20Report%20-%20Interim%20Report%207%20%20Final%2815835612.1%29.pdf> accessed 5 February 2024.

(November

2023)

451 CCA, Bargaining Code, Section 52E(1).
452 CCA, Bargaining Code, Section 52E(1). Services in relation to a corporation may be specified as

Designated Digital Platform Services if they are operated or controlled by: (a) a corporation, either byitself or together with its related bodies corporate; or (b) a related body corporate of the corporation,either by itself or together with other related bodies corporate of the corporation; CCA, Bargaining
Code, Section 52E(2).

216453 CCA, Bargaining Code, Section 52E(3).
454 CCA, Bargaining Code, Section 52A. A ‘responsible digital platform corporation’ for a designateddigital platform service is a corporation that: (i) is a related body corporate of the service’s designateddigital platform corporation; and (ii) if the corporation is not incorporated in Australia, is managed inAustralia; and (iii) either by itself or together with other corporations, operates or controls thedesignated digital platform service in supplying services used by Australians. If no corporation satisfies
such criteria, the service’s designated digital platform corporation will be the responsible digitalplatform corporation.
CCA, Bargaining Code, Section 52R. A Responsible Digital Platform Corporation must share
information with the entity generating news content relating to user interactions with covered news
content carried by the Designated Digital Platform Service.
455

456 CCA, Bargaining Code, Section 52S. A Responsible Digital Platform Corporation must give noticefor changing an algorithm of the Designated Digital Platform Service if the dominant purpose behind
this change is to alter how the Designated Digital Platform Service makes content available and if thechange is likely to have a significant effect on the referral traffic from the Designated Digital Platform
Service to the covered news content of registered news businesses.
457 CCA, Bargaining Code, Section 52X.
458 CCA, Bargaining Code, Sections 52ZC.

CCA,Section76(1A)(baa).
Also
ACCC,
‘Finesandpenalties’<https://www.accc.gov.au/business/compliance-and-enforcement/fines-and-penalties> accessed 15
July 2023.
459

460 CCA, Section 76(1B)(b).
461 CCA, Section 76(1A)(b). The penalty for violating the non-differentiation standard under Section

52ZC of the CCA would be the greatest of the following: (i) AUD 10,000,000; (ii) three times the valueof the direct or indirect benefit that the body corporate or its related bodies corporate have obtained
which is reasonably attributable to the act or omission, as determined by the Court; or (iii) 10% of theannual turnover of the body corporate during the turnover period of 12 months ending at the end of
the month in which the act or omission occurred, in case the Court cannot determine the value of thebenefit.
ACCC,‘Interim
ReportNo.
5–Regulatory
reform’(September<https://www.accc.gov.au/system/files/Digital%20platform%20services%20inquiry%20%20September%202022%20interim%20report.pdf> accessed 15 July 2023.
462

2022)

463 5th DPSI Report, Chapter 6, p. 123.
464 5th DPSI Report, Chapter 5, p. 108.
465 5th DPSI Report, para 5.2.1, p. 112.
466 5th DPSI Report, para 5.4, p. 114-119.
467 By setting quantitative thresholds as the primary criteria, the 5 th DPSI Report departs from otherglobal jurisdictions such as the EU, which has qualitative thresholds as the primary criteria and uses
quantitative thresholds to create a rebuttable presumption of having triggered the qualitative
thresholds.
468 5th DPSI Report, para 7.2.4, p. 194.

217

469 5th DPSI Report, para 7.2.3, p. 192.

Japan Anti-Monopoly
accessed 3 June 2023.
470

Act

<https://www.jftc.go.jp/en/policy_enforcement/21041301.pdf>

471 Japan Anti-Monopoly Act, Article 45(2).

TFDP
Act
<https://www.meti.go.jp/english/policy/mono_info_service/information_economy/digital_platfor
ms/pdf/1012_001a.pdf> accessed 3 June 2023.
472

SDP
Guidelines,
2021<https://www.meti.go.jp/english/policy/mono_info_service/information_economy/digital_platfor
ms/pdf/1012_001d.pdf> accessed 3 June 2023.
473

474 METI, ‘Cabinet Decisions Made on Two Cabinet Orders for the Act on Improving Transparency and

Fairnessof
DigitalPlatforms’(26
January<https://www.meti.go.jp/english/press/2021/0126_003.html> accessed 3 June 2023.

2021)

Japan
Ministerial
Ordinance
or
JMO<https://www.meti.go.jp/english/policy/mono_info_service/information_economy/digital_platfor
ms/pdf/1012_001c.pdf> accessed 3 June 2023.
475

476 This term is analogous to business users and end users under the TFDP Act.
477 Cabinet Order No. 17 (2022).
478 TFDP Act, Article 2(1).
479 TFDP Act, Article 2(6) read with Article 4.
480 TFDP Act, Article 4(1).
481 TFDP Act, Article 4(1).
482 Cabinet Order No. 17 (2022). The manner of identifying business classification and their thresholds

is not a one-time exercise, and will expand to cover anti-competitive conduct by digital enterprises inother markets.
Amazon Japan G.K., Rakuten Group, Inc., and Yahoo Japan Corporation have been designated as
specified digital platforms under this classification. See METI, ‘Designation of Digital Platform
Providers Subject to Specific Regulations Under the Act on Improving Transparency and Fairness ofDigital Platforms’ (1 April 2021) <https://www.meti.go.jp/english/press/2021/0401_001.html>
accessed 3 June 2023 (“METI News Release”).
483

Apple Inc. and Google LLC have been designated as specified digital platforms under thisclassification. See METI News Release (2021).
484

Google LLC, Meta Platforms, Inc., and Yahoo Japan Corporation have been designated as specified
digital platforms under this classification. See METI News Release (2021).
485

486 Google LLC has been designated as a specified digital platform under this classification. See METINews Release (2021).
487 TFDP Act, Article 5(1) read with JMO, Article 5.

218

488 TFDP Act, Article 5(2)(i)(b).
489 TFDP Act, Article 5(2)(i)(c).
490 TFDP Act, Article 5(2)(ii).
491 JMO, Article 6.
492 TFDP Act, Article 5(3).
493 JMO, Article 9(1)(iii).
494 TFDP Act, Article 6(4).
495 TFDP Act, Article 23.

SDP
Guidelines,
2021<https://www.meti.go.jp/english/policy/mono_info_service/information_economy/digital_platfor
ms/pdf/1012_001d.pdf> accessed 3 June 2023.
496

497 SDP Guidelines, Guideline 2.
498 SDP Guidelines, Guideline 2.1.2(i).
499 TFDP Act, Article 9(2).
500 SDP Guidelines, Guideline 2.1.2.
501 MRFTA <https://elaw.klri.re.kr/eng_service/lawView.do?hseq=61424&lang=ENG> accessed 23

June 2023.
502 Telecommunications Business Act, App-Store Act<https://www.law.go.kr/LSW/eng/engLsSc.do?query=TELECOMMUNICATIONS+BUSINESS+A
CT#liBgcolor1> accessed 23 June 2023.
503 Kim & Chang, ‘Guidelines on Review of Abuse of Market Dominance by Online Platform Operators’(12 January 2023) <https://www.kimchang.com/en/insights/detail.kc?sch_section=4&idx=26661>
accessed 15 July 2023.
504 KFTC Decision of 27 January 2021, Naver (Shopping), No. 2021-027.
505 KFTC, ‘KFTC Imposes corrective measures on 7 platform operators for violating the E-CommerceAct’ (7 March 2022)<https://www.ftc.go.kr/solution/skin/doc.html?fn=2b34a68ace7e194deb415a0a8da8ca1a8d379c23a6
9aa10e99dba714ac10a045&rs=/fileupload/data/result/BBSMSTR_000000002402/> accessed 23 June
2023.
506 Jon Porter, ‘Google found guilty of restricting Android forks in South Korea, fined $177 million’ (TheVerge, 14 September 2021) <https://www.theverge.com/2021/9/14/22673202/google-south-koreaandroid-fork-fine-anti-fragmentation-agreement-antitrust> accessed 23 June 2023.
KFTC,
Review
Guidelines<https://www.ftc.go.kr/solution/skin/doc.html?fn=1970be9e561a08552bc21061944be980fcc066254c99af9eb3e272e25a802d4c&rs=/fileupload/data/result//news/report/2023/> accessed 23 June 2023.
507

219

The
unofficialtranslated
versionisavailable<https://competition.tistory.com/entry/platformguidelines20230112> accessed 17 July 2023.

at:Guidelines for Review of the Abuse of Market Dominant Position, 2009,<https://www.ftc.go.kr/eng/cop/bbs/selectBoardList.do?key=2855&bbsId=BBSMSTR_00000000363
2&bbsTyCode=BBST11> accessed 15 July 2023.
508

509 Review Guidelines, para I (2).
510 Review Guidelines, para I (2).
511 Review Guidelines, para I 3(3).
512 Review Guidelines, para I 3(2)(A). Online platform mediation service refers to a service that mediates

the initiation of transactions between different groups of users through an online platform.
513 Review Guidelines, para I 3(2).
514 Review Guidelines, para II(2).
515 Review Guidelines, para III.
516 Telecommunications Business Act, Article 2(13). App market business operator refers to a person

who registers and sells mobile contents, etc. among businesses that provide additional communication
services, and brokers transactions so that users can purchase mobile contents, etc.
517 KCC, ‘KCC drafts amendments to Telecom Act enforcement decree and enacts notice prohibiting

forcing
certainin-apppayments’<https://www.kcc.go.kr/user.do?mode=view&page=E04010000&dc=E04010000&boardId=1058&cp=1&boardSeq=52182> accessed 23 June 2023.
518 Telecommunications Business Act, App-Store Act, Article 50(1).
519 Telecommunications Business Act, App-Store Act, Article 50(9).
520 Telecommunications Business Act, App-Store Act, Article 50(10).
521 Telecommunications Business Act, App-Store Act, Article 50(11).
522 Telecommunications Business Act, App-Store Act, Article 22-9(1).
523 Telecommunications Business Act, App-Store Act, Article 22-9(2).
524 Telecommunications Business Act, Article 52.
525 Telecommunications Business Act, Article 53.

ActonConsumerProtectioninElectronic
Commerce<https://elaw.klri.re.kr/eng_service/lawView.do?hseq=38513&lang=ENG> accessed 23 June 2023.
526

527 Kim & Chang, ‘KFTC Releases its Proposed Amendments to the E-Commerce Act’ (9 March 2021)<https://www.kimchang.com/en/insights/detail.kc?sch_section=4&idx=22891> accessed on 15 July
2023.
528 Mission Report – South Korea (2023), p. 4.

220

529 Mission Report – South Korea (2023), p. 4.
530 Henry Mostyn and Bianca Buzatu, ‘Digital Markets Regulation Handbook: South Korea’ (Cleary

Gottlieb,
December2022),
p.
2<https://www.clearygottlieb.com//media/files/rostrum/south%20korea/22092308%20digital%20markets%20regulation%20handbook
r16south%20korea> accessed 23 June 2023.
531 Annabelle Liang, ‘Chinese internet giants hand algorithm data to government’ (BBC News, 16 August2022) <https://www.bbc.com/news/business-62544950> accessed 3 June 2023.
Scott Murdoch & David Stanway, ‘China fines Alibaba record $2.75 bln for anti-monopoly
violations’ (Reuters, 10 April 2021) <https://www.reuters.com/business/retail-consumer/chinaregulators-fine-alibaba-275-bln-anti-monopoly-violations-2021-04-10/> accessed 3 June 2023.
532

AML
as
amended;theunofficialtranslated
versionisavailable<https://www.chinalawtranslate.com/en/anti-monopoly-law-2022/> accessed 17 July 2023.
533

at

534 State Council, People’s Republic of China, ‘China unveils antitrust guidelines on platform economy’(7
February2021)<http://english.www.gov.cn/policies/latestreleases/202102/07/content_WS601ffe31c6d0f725769454
98.html> accessed 13 July 2023.
Draft Classification Guidelines; the unofficial translated version is available at<https://www.ianbrown.tech/2021/11/01/chinas-new-platform-guidelines/> accessed 18 July 2023.
535

Draft Responsibility Guidelines; the unofficial translated version is available at<https://www.ianbrown.tech/2021/11/01/chinas-new-platform-guidelines/> accessed 18 July 2023.
536‘China proposes Guidelines on Internet Platform Guidelines’ (Reuters, October 2021)<https://www.reuters.com/world/china/china-proposes-guidelines-internet-platformresponsibilities-2021-10-29/> accessed 18 July 2023.
537

Alexandr Svetlicinii & Xie Fali, ‘Main Developments in Competition Law and Policy 2022’ (Kluwer
Competition
Law
Blog,
December2022)<https://competitionlawblog.kluwercompetitionlaw.com/2022/12/12/main-developments-incompetition-law-and-policy-2022-china/> accessed 19 July 2023.
538

539 AML, Articles 23 and 24.
540 AML, Articles 9 and 22(7).
541 State Council, People’s Republic of China, ‘Draft rules aim to curb monopolistic behavior of internet

platforms’(14
November
2020)<http://english.www.gov.cn/policies/policywatch/202011/14/content_WS5faf2a06c6d0f7257693fb9
f.html> accessed 13 July 2023.
542 State Council, People’s Republic of China, ‘China unveils antitrust guidelines on platform economy’(7
February2021)<http://english.www.gov.cn/policies/latestreleases/202102/07/content_WS601ffe31c6d0f725769454
98.html> accessed 13 July 2023.
Wei Huang, Wendy Zhou, Xiumin Ruan & Xi Zhang, ‘Antitrust Guidelines for the Platform
Economy in the Era of Enhanced Antitrust Scrutiny’ (Competition Policy International, March 2021)<https://www.competitionpolicyinternational.com/wp-content/uploads/2021/03/10-AntitrustGuidelines-for-the-Platform-Economy-in-the-Era-of-Enhanced-Antitrust-Scrutiny-By-Wei-Huang543

221

Wendy-Zhou-Xiumin-Ruan-Xi-Zhang.pdf> accessed 3 June 2023. (“CPI - Antitrust Guidelines for the
Platform Economy”)
544 CPI - Antitrust Guidelines for the Platform Economy (2021).
545 CPI - Antitrust Guidelines for the Platform Economy (2021).
546 The Draft Classification Guidelines and the Draft Responsibility Guidelines are presently at the

public consultation stage.
547 Draft Classification Guidelines, Articles 2.3, 2.4, 2.5, 2.6, 2.7, 2.8.
548 Draft Classification Guidelines, Article 3.3. There is a terminology issue wherein the table provided

in the translated version of the Draft Classification Guidelines provides for platform has strong
restrictions on merchants contacting consumer (user) while the text of the provision provides for author(user).
549 Draft Classification Guidelines, Article 3.4.
550 There is a potential terminology issue with the Draft Responsibility Guidelines introducing thephrase ‘super-large platforms’, which is absent from the Draft Classification Guidelines. However, thedefinition of the term ‘super-large platform’ in the Draft Responsibility Guidelines is consistent withthe criteria for ‘large platforms’ in the Draft Classification Guidelines. As there is no official English
translation to these guidelines, it is difficult to assess the reasons behind this conflict, or whether theseobligations may also be applied to ‘super platforms’ under the Draft Classification Guidelines.
551 Draft Responsibility Guidelines, Article 1(1).
552 Draft Responsibility Guidelines, Article 3.
553 Draft Responsibility Guidelines, Article 1(2).
554 Draft Responsibility Guidelines, Article 2.
555 Draft Responsibility Guidelines, Article 10.
556 Draft Responsibility Guidelines, Article 16.
557 Draft Responsibility Guidelines, Article 17.
558 Draft Responsibility Guidelines, Article 24.
559 Draft Responsibility Guidelines, Article 35.
560 John C. Hilke, ‘Improving Relationships Between Competition Policy and Sectoral Regulation’, The

Latin
AmericanCompetition
Forum(2006)<http://www.oecd.org/daf/competition/prosecutionandlawenforcement/38819635.pdf> accessed 1
July 2023; Paul Crampton, ‘Striking the Right Balance between Competition and Regulation: The Key
is Learning from our Mistakes’, APEC-OECD Co-operative Initiative on Regulatory Reform (OECD,
2002)) <https://www.oecd.org/regreform/2503205.pdf> accessed 1 July 2023; Gary Hewitt,‘RelationshipbetweenRegulators
andCompetition
Authorities’(OECD,
1998)<http://www.oecd.org/regreform/sectors/1920556.pdf> accessed 1 July 2023.
561 Vidhi Centre for Legal Policy, ‘Fair and Competitive E-marketplaces (F.A.C.E.): The Business Users’

Narrative’(September
2021)<https://vidhilegalpolicy.in/research/fair-and-competitive-emarketplaces-f-a-c-e-the-business-users-narrative/> accessed 23 January 2024.

222

562 Maher M. Dabbah, ‘The Relationship between Competition Authorities and Sector Regulators’ (2011)

Cambridge
Law
Journal70,p.
113-143<https://www.jstor.org/stable/41300946?seq=1#metadata_info_tab_contents> accessed 1 July 2023.
563 Standing Committee Report, p. 38 – 39.
564 Gary Hewitt, ‘Relationship between Regulators and Competition Authorities’ (OECD, 1998), p. 23<http://www.oecd.org/regreform/sectors/1920556.pdf> accessed 1 July 2023.
Congressional Research Service, ‘Antitrust Reform and Big-tech firms’<https://crsreports.congress.gov/product/pdf/LSB/LSB10889> accessed 1 July 2023.
565(2023)

566 Vidhi Centre for Legal Policy, ‘Fair and Competitive E-marketplaces (F.A.C.E.): The Business Users’

Narrative’ (September 2021), p. 45-46 <https://vidhilegalpolicy.in/research/fair-and-competitive-emarketplaces-f-a-c-e-the-business-users-narrative/> accessed 23 January 2024.
567 Google has been subject to repeated antitrust scrutiny by CCI. See Umar Javeed and Ors v. Google LLC

and Ors., CCI order dated 20 October 2022 in Case no. 39 of 2018; Matrimony.com Limited v. Google LLC
and Ors. and Consumer Unity and Trust Society v. Google LLC, CCI order dated 8 February 2018 in Case
no. 7 and 30 of 2012.
568 CCI has noted, for instance, that self-preferencing is a recurring concern; see CCI E-commerce Market

Study.
569 Competition Act, Section 4.

Ling-Chieh Kung and Guan-Yu Zhong, ‘The Optimal Pricing Strategy for Two-sided Platform
Delivery in the Sharing Economy’ (2017) Transportation Research Part E: Logistics and Transportation
Review 101 <https://scholars.lib.ntu.edu.tw/bitstream/123456789/455958/1/SSRN-id2931383.pdf>
accessed 1 July 2023.
570

Cassandra Liem and Georgios Petropoulos, ‘The economic value of personal data for online
platforms,
firms
and
consumers’(LSE
Business
Review,January
2016)<https://blogs.lse.ac.uk/businessreview/2016/01/19/the-economic-value-of-personal-data-foronline-platforms-firms-and-consumers/> accessed 1 July 2023.
571

572 A multi-sided market comprises a platform that connects at least two distinct groups. These twogroups may have a subsidy-based relationship that exists when one side indirectly covers the cost ofusing the platform for another side, without offering a separate service that directly attracts users tothat platform. For instance, platforms like Facebook, Twitter and YouTube connect users withadvertisers, and grant free access to the platform and the services provided by it to the users, as the costof using the platform is covered by the advertisers. See OECD, ‘Network Effects and Efficiencies inMultisided
Markets’
DAF/COMP/WD(2017)40/FINALp.
4<https://one.oecd.org/document/DAF/COMP/WD(2017)40/FINAL/en/pdf> accessed 1 July 2023.
Evans notes with respect to zero-price platforms, “Charging nothing for a product or service enables themto make money, somehow, somewhere else.”, see David S. Evans, ‘The Antitrust Economics of Free’ John M.
Olin Law & Economics Working Paper (2011) <https://docplayer.net/11563755-The-antitrusteconomics-of-free-david-s-evans-the-law-school-the-university-of-chicago-may-2011.html> accessed 1
July 2023.
573 Chris Jay Hoofnagle and Jan Whittington, ‘Free: Accounting for the Costs of the Internet’s Most

Popular Price’ (2014) UCLA Law Review 61 <https://www.uclalawreview.org/pdf/61-3-2.pdf>
accessed 1 July 2023.

223

574 Amazon Basics is Amazon’s original private label brand and collection. It offers many everyday

staple products such as electronics, home goods, office supplies, etc. It has thus become a competitor toother smaller vendors and companies that are selling their products on Amazon’s platform. See Julie
Creswell, ’How Amazon steers shoppers to its own products‘ (NY Times, 23 June 2018)https://www.nytimes.com/2018/06/23/business/amazon-the-brand-buster.html
accessed25
August 2023.
575

Annexure III on the stakeholder submissions may be referred.

576 European Round Table for Industry, ‘Shaping Competition Policy in the Era of Digitisation’ (2018)<https://ec.europa.eu/competition/information/digitisation_2018/contributions/ert.pdf> accessed
1 July 2023.
577 Jacques Crémer, Yves-Alexandre de Montjoye and Heike Schweitzer, ‘Competition Policy for the

DigitalEra’(2019)
EuropeanCommission
Report<https://ec.europa.eu/competition/publications/reports/kd0419345enn.pdf> accessed 1 July 2023.
578 CLRC Report (2019).

OECD, ‘Big Data: Bringing Competition Policy To The Digital Era’ (2016)<https://one.oecd.org/document/DAF/COMP(2016)14/en/pdf#_ga=2.106957570.1680213474.15593
88897-1619135612.1554836539> accessed 1 July 2023.
579

580 UNCTAD, ‘Competition issues in the digital economy’ (2019)<https://unctad.org/system/files/official-document/ciclpd54_en.pdf> accessed 1 July 2023.
581 Tim Stobierski, ‘What are network effects?’ (Harvard Business School, November 2020)<https://online.hbs.edu/blog/post/what-are-network-effects> accessed 1 July 2023.
582 Andrei Hagiu and Julian Wright, ‘When Data Creates Competitive Advantage’ (Harvard Business

Review, 2020) < https://hbr.org/2020/01/when-data-creates-competitive-advantage> accessed 1 July
2023.
583 Fixed costs are costs that remain independent of the volume of output, such as costs of research anddevelopment, or setting up of production and distribution facilities.
584 Richard A. Posner, ‘Antitrust in the New Economy’, John M. Olin Program in Law and Economics

Working
Paper(2000)<https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=1057&context=law_and_economics> accessed 1 July 2023.
585 Heike Schweitzer, Justus Haucap, Wolfgang Kerber and Robert Welke, ‘Modernising the law on

abuse of market power: Report for the Federal Ministry for Economic Affairs and Energy (Germany)’(2018)<https://www.bmwi.de/Redaktion/DE/Downloads/Studien/modernisierung-dermissbrauchsaufsicht-fuer-marktmaechtige-unternehmen-zusammenfassungenglisch.pdf?__blob=publicationFile&v=3> accessed 1 July 2023.
Secretariat,
UNCTAD,‘Competition
issuesinthedigitaleconomy’<https://unctad.org/system/files/official-document/ciclpd54_en.pdf> accessed 1 July 2023.
586(2019)

Lina
Khan,‘Amazon’s
AntitrustParadox’(2018)Yale
Law
Journal126(3)<https://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=5785&context=ylj> accessed 1
July 2023.
587

Lina
Khan,
‘Amazon’s
AntitrustParadox’(2018)Yale
Law
Journal126(3)<https://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=5785&context=ylj> accessed 1
588

224

July 2023. For instance, CCI has repeatedly held that Amazon is not a dominant entity despite the many
allegations of unfair unilateral conduct levelled against it. See Delhi Vyapar Mahasangh v. Flipkart andOrs., CCI order dated 13 January 2020 in Case no. 40 of 2019; Lifestyle Equities C.V. and Anr v. Amazon
Seller Services Private Ltd. and Ors., CCI order dated 11 September 2020 in Case no. 9 of 2020.
589 Krystal Hu, ‘ChatGPT sets record for fastest-growing user base – analyst note’ (Reuters, 2 February2023) <https://www.reuters.com/technology/chatgpt-sets-record-fastest-growing-user-base-analystnote-2023-02-01/> accessed 24 July 2023.
590 The ten core platform services identified by the DMA are online intermediation services, online

search engines, online social networking services, video-sharing services, video-sharing platform
services, number-independent interpersonal communication services, operating systems, cloudcomputing services, advertising services, web browsers and virtual assistants.
591 European Commission, ‘Proposal for a Regulation of the European Parliament and of the Council’,p. 37-48 (15 December 2020) <https://eur-lex.europa.eu/resource.html?uri=cellar:57a5679e-3f85-11ebb27b-01aa75ed71a1.0001.02/DOC_1&format=PDF> accessed 24 July 2023. Initially, only 8 services
were included, namely, online intermediation service, online search services, social network services,
video sharing platform services, number independent messaging services, operating systems, cloudservices, and online advertising services. However, taking into account market studies and the EC’s
past enforcement practices, two additional services were included under the definition of core platform
services, i.e., web browsers and virtual assistants.
592 DMA Recitals, para 13.
593 DMA Recitals, para 14.
594 CCA, Bargaining Code.
595 Telecommunications Business Act, App-Store Act.
596 Inpara 3.26 of the section on ‘Thresholds and Criteria for designation as an SSDE’, the Committee
has recommended a self-notification mechanism for SSDEs.
597 It is however of note that while the DMCC envisages applicability to all “digital services”, the DMCC

concomitantly enables the CMA to put together service-specific codes of conduct for each designated
SMS.
598 See TFDP Act and Cabinet Order No. 17 (2022).
599 Germany ARC, 19a. Section 19a of the ARC is applicable only to multi-sided markets and networks.
600 A concern was expressed that the scope of ‘online intermediation services’ as a Core Digital Service

under the Draft DCB may be too broad. This may lead to online stockbrokers / stock trading platforms/ online mutual fund distributors qualifying as SSDEs. The Committee observed that only digitalenterprises which meet the twin tests of ‘significant financial strength’ and ‘significant spread’ would
qualify as SSDEs. Such SSDEs would further be subject to differentiated sets of obligations based on
factors such as inter alia number of users. For further information, section on ‘Quantitative Thresholds’
in Chapter IV of this Report may be referred.
601 The Committee took note of MeitY’s recommendation that the Core Digital Services specified under

Schedule I to the Draft DCB be harmonised with the intermediaries intended to be included in the
proposed DIA. The Committee observed that any new service could be included within Schedule I in
due course if it presented concerns to competition.
602 For a detailed overview of the factors under each of these jurisdictions, Chapter III of this Report

may be referred.

225

While the UK’s DMCC does not have a turnover threshold, the DMCC nevertheless imposes aturnover condition, i.e., it stipulates the minimum turnover an undertaking must have before it isdesignated as an SMS entity.
603

604 In South Korea, no factors apart from dominance have been contemplated.

EC, “Commission Staff Working Document: Impact Assessment Report Accompanying the
document - Proposal for a Regulation of the European Parliament and of the Council on contestableand fair markets in the digital sector (Digital Markets Act)” (15 December 2020), para 135, p. 47 – 48
<https://eur-lex.europa.eu/resource.html?uri=cellar:57a5679e-3f85-11eb-b27b01aa75ed71a1.0001.02/DOC_1&format=PDF> accessed 23 July 2023. (“EC Impact Assessment Report– DMA”)
605

606 DMCC, Section 2(3) read with Section 7.
607 See AICO, Sections 2(d) and 2(g)(4) and EPM, Section 5(5).
608 Competition Act, Sections 5 and 6.
609 Competition Act, Section 5. Combinations that meet the asset and turnover thresholds prescribedunder Section 5 require notification to, and approval of, the CCI prior to their consummation.
610 See DMA, Article 3(2), AICO, Sections 2(d) and 2(g)(4) and EPM, Section 5(5).
611 CCI, 'Filing of Combination Notices' <https://www.cci.gov.in/combination/combination/filing-of-combination-notice/introduction> accessed 26 July 2023.
612 Mr. Umar Javeed v. Google LLC, CCI order dated 20 October 2022 in Case No. 39 of 2018, paras 630 –

635; XYZ v. Alphabet Inc. & Ors., CCI order dated 25 October 2022 in Case No. 07 of 2020, paras 411 –414.
613 CCI E-commerce Market Study (2020), p. 5; Delhi Vyapar Mahasangh v. Flipkart Internet Private Limited

and its affiliated entities & Ors., CCI order dated 13 January 2020 in Case No. 41 of 2019; Lifestyle Equities
C.V. v. Amazon Seller Services Private Limited, CCI order dated 11 September 2020 in Case No. 09 of 2020.
614 GMV refers to the cumulative value of goods or services or both sold through an online platform

during a certain period while turnover refers to the revenue derived from the sale of goods and services.
615 See the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)

Regulations, 2018 and the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
616 The Committee noted that the definition of ‘user’ under the IT Rules does not distinguish between‘business users’ and ‘end users’ in that any person who accesses or avails any ‘computer resource’ forcertain specified purposes is said to be a ‘user’, regardless of the provision of goods or services throughsuch computer resource. The Committee opined that such a broad definition would not serve thepurpose of the Draft DCB since the objective of the Draft DCB is the regulation of the practices of SSDEs
in the provision of Core Digital Services. Thus, the definitions of ‘users’ in the context of the Draft DCB
would be required to be linked to the provision of goods and services through a digital mode, and not
merely the usage of the system. In addition, the definition of ‘business users’ under the Draft DCB
should include business-to-business transactions. The Committee therefore felt that ‘business users’and ‘end users’ should be defined separately under the Draft DCB.
617 DMA, Article 3(1)(b) read with Article 3(2)(b).

226

618 DMA, Recital 20.

Tambiama Madiega, ‘Briefing: EU Legislation in Progress- Digital Services Act’ (European
Parliamentary
Research
Service),November2022),
p.
8.
<https://www.europarl.europa.eu/RegData/etudes/BRIE/2021/689357/EPRS_BRI(2021)689357_E
N.pdf> accessed 24 July 2023.
619

Eurostat, ‘How many citizens had basic digital skills in 2021?’ (30 March 2022)<https://ec.europa.eu/eurostat/web/products-eurostat-news/-/ddn-20220330-1>
accessed6
November 2023.
620

Oxfam India, ‘Digital Divide: India Inequality Report 2022’ (December 2022), p. 23<https://d1ns4ht6ytuzzo.cloudfront.net/oxfamdata/oxfamdatapublic/202212/Digital%20Divide_India%20Inequality%20Report%202022_PRINT%20with%20cropmarks.pdf?3l.
73PGQrpQfYrnwWeoXV3BFjhETfA_p> accessed 6 November 2023.
621

622 Ani Petrosyan, ‘Internet penetration rate in the European Union from 2019 to 2022, by country’(Statista, 26 July 2023) <https://www.statista.com/statistics/1246141/eu-internet-penetrationrate/#statisticContainer> accessed 6 November 2023.
623 Tanushree Basuroy, “Internet penetration rate in India from 2007 to 2022” (Statista, 29 August 2023)<https://www.statista.com/statistics/792074/india-internet-penetration-rate/>
November 2023.

accessed

6

International
Monetary
Fund,
‘GDP
per
capita,current
prices’(2023)<https://www.imf.org/external/datamapper/PPPPC@WEO/EUQ/EU> accessed 6 November 2023.
624

Oxfam
India,‘Inequality
Report2022:
DigitalDivide’(December
2022)<https://d1ns4ht6ytuzzo.cloudfront.net/oxfamdata/oxfamdatapublic/202212/Digital%20Divide_India%20Inequality%20Report%202022_PRINT%20with%20cropmarks.pdf?3l.
73PGQrpQfYrnwWeoXV3BFjhETfA_p> accessed 7 November 2023.
625

Statista, “Annual revenue generated by Meta Platforms from 2009 to 2022”<https://www.statista.com/statistics/268604/annual-revenue-offacebook/#:~:text=In%202022%2C%20the%20revenue%20general,for%20the%20social%20media%20c
ompany.> accessed 17 January 2024.
626

627 Pranav Mukul, “Uber India posts 54% increase in FY23 revenue” (The Economic Times, 9 January2024) <https://economictimes.indiatimes.com/tech/technology/uber-india-fy23-revenue-jumps-tors-2666-crore-net-losswidens/articleshow/106636607.cms?utm_source=contentofinterest&utm_medium=text&utm_campa
ign=cppst> accessed 17 January 2024.
628 Tanushree Basuroy, “Social network user penetration in India from 2018 to 2020, with estimates until

2028” (Statista, 31 July 2023) <https://www.statista.com/statistics/240960/share-of-indianpopulation-using-social-networks/> accessed 6 November 2023.
Statista, ‘Online Food Delivery – India’ <https://www.statista.com/outlook/dmo/online-fooddelivery/india> accessed 6 November 2023.
629

Kantarand
IAMAI,‘Internet
in
India:
2022’(April2023)<https://www.iamai.in/sites/default/files/research/Internet%20in%20India%202022_Print%20vers
ion.pdf> accessed 6 November 2023.
630

631 Rucha Sharma, ‘News by Numbers: 42 percent revenue of online food delivery business comes fromonly 8 Indian cities’ (Forbes India, 8 July 2021) <https://www.forbesindia.com/article/news-by-227numbers/news-by-numbers-42-percent-revenue-of-online-food-delivery-business-comes-from-only8-indian-cities/69019/1> accessed 6 November 2023.
632

Section on ‘Obligations’ may be referred.

633 Under the Draft Classification Guidelines in China, platforms are designated as ‘super platforms’ or‘large platforms’ on the basis of number of annual active users, core business, market value in theprevious year, and ability to restrict merchants from contacting consumers. The Draft Responsibility
Guidelines impose certain key ex-ante obligations on the ‘super large platforms’ whereas generalobligations are applicable to all internet platforms. For further reference, refer to the section on China
in Chapter III of this Report.
634 For instance, an SSDE fulfilling base-level thresholds, i.e. with an Indian turnover of INR 4,000 croreand one crore end users may have a lower level of compliance with obligations under the Draft DCB
than an SSDE with an Indian turnover of INR 20,000 crore and with ten crore end users.
635 For instance, the regulations framed by the CCI may provide for whether calculation of end users orbusiness users is to be done on a monthly or yearly basis, and whether active or passive end users areto be considered, for each Core Digital Service.
636 ‘Undertaking’ under the DMA is defined as “an entity engaged in an economic activity, regardless of its

legal status and the way in which it is financed, including all linked enterprises or connected undertakings thatform a group through the direct or indirect control of an enterprise or undertaking by another”; DMA, Article
2(27).
637 The term "group" has been used in the context of combinations in the Competition Act. It refers to

two or more enterprises where one enterprise is directly or indirectly, in a position to: (i) at least
exercise 26% of the voting rights in the other enterprise; or (ii) appoint more than 50% of the membersof the board of directors in the other enterprise; or (iii) control the management or affairs of the otherenterprise; see Competition Act, Explanation (b) to Section 5.
638 See for instance EC, ‘Commission Decision of 5.9.2023 designating Alphabet as a gatekeeper pursuant

to Article 3 of Regulation (EU) 2022/1925 of the European Parliament and of the Council on contestableandfairmarkets
inthedigitalsector’(5
September
2023)<https://ec.europa.eu/competition/digital_markets_act/cases/202344/DMA_100002_145.pdf>
accessed 23 January 2024; and EC, ‘Commission Decision of 5.9.2023 designating Apple as a gatekeeper
pursuant to Article 3 of Regulation (EU) 2022/1925 of the European Parliament and of the Council oncontestableandfairmarkets
inthedigitalsector’(5
September
2023)<https://ec.europa.eu/competition/digital_markets_act/cases/202344/DMA_100013_215.pdf>
accessed 23 January 2024.
639 For instance, the EC has designated Alphabet Inc. (the parent company), together with all legal

entities directly or indirectly controlled by Alphabet Inc., as a Gatekeeper in relation to certain coreplatform services. See EC, ‘Commission Decision of 5.9.2023 designating Alphabet as a gatekeeper
pursuant to Article 3 of Regulation (EU) 2022/1925 of the European Parliament and of the Council oncontestableandfairmarkets
inthedigitalsector’(5
September
2023)<https://ec.europa.eu/competition/digital_markets_act/cases/202344/DMA_100002_145.pdf>
accessed 1 February 2024.
640 The meaning of ‘affiliates’ is provided in the German ARC as follows: “If an undertaking concerned

is a dependent or dominant undertaking within the meaning of Section 17 of the German Stock
Corporation Act [Aktiengesetz] or a group company within the meaning of Section 18 of the German
Stock Corporation Act, then the undertakings so affiliated shall be regarded as a single undertaking. If
several undertakings act together in such a way that they can jointly exercise a controlling influence onanother undertaking, each of them shall be regarded as controlling”; ARC, Section 36(2).

228

FCO, “Case summary: Bundeskartellamt determines Google’s paramount significance forcompetition
acrossmarkets”(5
January2022)<https://www.bundeskartellamt.de/SharedDocs/Entscheidung/EN/Fallberichte/Missbrauchsaufsi
cht/2022/B7-61-21.pdf?__blob=publicationFile&v=6> accessed 1 February 2024.
641

642 The Committee discussed that an enterprise may cite excessively technical or insubstantial reasons

to evade compliance with obligations under the Draft DCB such as the holding company exercising
control over its actions or owning key intellectual property enabling the provision of the concernedCore Digital Service.
643 For instance, enterprises providing online search engine services may also be directly / indirectly

involved in providing online advertising services.
644 The term ‘control’ has been defined under the DMA as the possibility of exercising decisive influenceon an undertaking, within the meaning of Article 3(2) of the ECMR; DMA, Article 2(28). Control is said
to be constituted by rights, contracts or any other means which, either separately or in combination andhaving regard to the considerations of fact or law involved, confer the possibility of exercising decisive
influence on an undertaking, in particular by: (a) ownership or the right to use all or part of the assetsof an undertaking; (b) rights or contracts which confer decisive influence on the composition, voting or
decisions of the organs of an undertaking; ECMR, Article 3(2).
645 Commission Implementing Regulation (EU) 2023/814 of 14 April 2023 on detailed arrangements forthe conduct of certain proceedings by the Commission pursuant to Regulation (EU) 2022/1925 of theEuropean Parliament and of the Council, Annex I - Form relating to the Notification pursuant to Article
3(3) of Regulation (EU) 2022/1925 for the purposes of Gatekeeper Designation (“Form GD”), Section
1.1.2 <https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32023R0814> accessed 1
February 2024.
646 Standing Committee Report (2022), p. 4.

Competition(Amendment)
Act,<https://www.cci.gov.in/images/legalframeworkact/en/the-competition-amendment-act20231681363446.pdf> accessed on 19 July 2023.
647

2023

648 Competition Act, Section 5(d).
649 Matrimony.com Limited v. Google LLC, CCI order dated 8 February 2018 in Case Nos. 7 and 30 of 2012.
650 Andrei Hagiu, Tat-How Teh and Julian Wright, ‘Should Platforms be Allowed to Sell on their Own

Marketplaces?’ (2022) Rand Journal of Economics 53; Massimo Motta, ‘Self-preferencing and Foreclosurein Digital Markets: Theories of harm for abuse cases’ (2023) International Journal of Industrial Organization
90.
The Unilateral Conduct Working Group, ‘Unilateral Conduct Workbook-Chapter 6: Tying and
Bundling’(International
Competition
Network,
April,
2015)<https://www.internationalcompetitionnetwork.org/wp-content/uploads/2018/07/UCWG_UCWCh6.pdf> accessed 19 July 2023.
651

652 The Committee noted that though the Standing Committee Report had identified ten ACPs, such list

was not exhaustive and that the nomenclature of such ACPs could vary from case to case. A broad,
principle-based framework would allow for such ACPs to be included even if they are not enumerated
as a specific obligation in the statute. The Committee noted, for instance, that ACPs such as ‘exclusive
tie-ups’ and ‘pricing / deep discounting’ may be subsumed under the obligation on ‘Fair andTransparent Dealing’ under the Draft DCB.

229

653 The Committee discussed that, for instance, the regulations should specify that obligation relating

to ‘data usage’ under the Draft DCB is primarily concerned with harm caused to competition.
654 Certain Committee members expressed views that obligations relating to interoperability should be

excluded from the ambit of the Draft DCB or that anti-steering provisions should only regulate appstores. Some members also sought clarity on the scope of the term ‘integral’ to provision of Core Digital
Services in the context of the provision on anti-steering in the Draft DCB. The Committee felt that the
CCI should be allowed the discretion to frame the related conduct requirements as it deems fit,pursuant to stakeholder consultations, in due course of time.
655 Oliver J. Bethell, Gavin N. Baird and Alexander M. Waksman, ‘Oliver J. Bethell, Gavin N. Baird andAlexanderM.
Waksman’(Journalof
Antitrust
Enforcement,
2019)<https://awards.concurrences.com/IMG/pdf/42._ensuring_innovation_through_participative_antit
rust.pdf?55639/d1ca13b4fa457cd27ac17d9e31d362bc3034ca67239d61fe5a4dda9d51d5ff7d> accessed 19
July 2023.
656 Section 64A was introduced through the Competition (Amendment) Act, 2023. It provides for theprocess of issuing regulations that includes publishing draft regulations and inviting public comments,
publishing general statement of its response and periodically review such regulations.
657 The Committee discussed the possibility of a digital service possessing the nature of one or moreCore Digital Services and therefore being classified under more than one Core Digital Service as listed
under Schedule I to the Draft DCB. The Committee noted, for instance, that an instant messaging service
could be classified as an ‘interpersonal communications service’ and ‘online intermediation service’. In
such case, the concerned SSDE would be required to comply with the ex-ante obligations framed forboth such Core Digital Services.
658 The Committee discussed that, for instance, the CCI may specify varying conduct requirements fordifferent business models or segments such as cab aggregators, food delivery apps, and e-commerce
platforms, all of which would come within the purview of a single Core Digital Service, i.e. ‘online
intermediation services’ under the Draft DCB.
659 The Committee took note of the E-Commerce Rules, 2020 which mandate that an e-commerce entity

should establish an adequate grievance redressal mechanism. See E-Commerce Rules, 2020, Rule 4(4).
V. Sridhar, ‘Deregulation: License to Loot Raj’ (Frontline, September 2021)<https://frontline.thehindu.com/cover-story/deregulation-licence-to-loot-raj-india-monopoliesafter-1991/article36293318.ece> accessed 19 July 2023.
660

661 Section 54 of the Competition Act states the following:“54. Power to exempt: The Central Government may, by notification, exempt from the application of thisAct, or any provision thereof, and for such period as it may specify in such notification—(a) any class of enterprises if such exemption is necessary in the interest of security of the State or public
interest;(b) any practice or agreement arising out of and in accordance with any obligation assumed by India
under any treaty, agreement or convention with any other country or countries;(c) any enterprise which performs a sovereign function on behalf of the Central Government or a State
Government:
Provided that in case an enterprise is engaged in any activity including the activity relatable to thesovereign functions of the Government, the Central Government may grant exemption only in respectof activity relatable to the sovereign functions.”
662 The Committee considered whether a specific exemption from the purview of the Draft DCB should

be provided to enterprises engaged in providing critical support to the government (such as theenforcement of any legal right or claim) or enterprises providing a Core Digital Service which has been
designated as Critical Information Infrastructure. The Committee opined that such enterprises could230be exempted on grounds already present in the Draft DCB (such as public interest and performance ofsovereign function).
The Committee discussed that, for instance, a dominant enterprise which has entered into a
combination and not notified the CCI may be penalised for gun-jumping (under Section 43A of theCompetition Act) and may also be proceeded against for abuse of its dominant position (under Section
4 of the Competition Act).
663

664 See Ashutosh Bhardwaj v. DLF Limited, CCI order dated 04 January 2017 in Case No. 01 of 2014. In thiscase, a penalty of INR 630 crore had already been imposed on DLF for abusing its dominant positionin an earlier case in 2011. The CCI stated that since DLF had already been penalised for the same period
to which the contravention in the present case belonged, no further financial penalty was required to
be imposed, and directed DLF to cease and desist from indulging in abusive and unfair conduct.
665 Competition Act, Section 41.
666 Competition Act, Sections 42A and 53N.
667 A view was expressed that the Commission’s power to issue interim orders should be limited tocontraventions committed by SSDEs and ADEs only, and should not encompass ‘any party’ as
provided under the Draft DCB as the Draft DCB is intended to regulate the conduct of SSDEs and ADEs
only. The Committee opined that there may be cases wherein ADEs or other group enterprises of theSSDE, which have not been identified yet, engage in anti-competitive conduct. The CCI should thus beempowered to issue interim orders to temporarily restrain all such parties (and not just SSDEs) fromcarrying on such conduct, even prior to their designation.
668 Competition Act, Section 48A.
669 Competition Act, Section 48B.
670 Competition and Markets Authority, ‘Policy paper: The CMA's Digital Markets Strategy: February

2021 refresh’ (9 February 2021) <https://www.gov.uk/government/publications/competition-andmarkets-authoritys-digital-markets-strategy/the-cmas-digital-markets-strategy-february-2021refresh> accessed 19 July 2023.
671 European Commission, ‘Commission Decision of 23.03.2023 on setting up the High-Level Group forthe
DigitalMarkets
Act’,
Article
4
(23
March
2023)
<https://competitionpolicy.ec.europa.eu/system/files/2023-03/High_Level_Group_on_the_DMA_0.pdf> accessed 19 July
2023.
CCI, ‘CCI organizes 8th edition of National Conference on Economics of Competition Law,
<https://cci.gov.in/images/economicconference/en/press-release-of-8th-national-conference-oneconomics-of-competition-law1684131990.pdf> accessed 19 July 2023; ‘CCI establishes digital markets
and data unit to tackle competition concerns in digital markets’, (Medianama, 28 July, 2023),<https://www.medianama.com/2023/07/223-cci-establishes-digital-markets-and-data-unit/>
accessed 19 July 2023.
672

673 OECD, ‘Criminalisation of cartels and bid rigging conspiracies– Note by Finland’ (May 2020)<https://one.oecd.org/document/DAF/COMP/WP3/WD(2020)5/en/pdf> accessed 19 July 2023.
674 ‘Decriminalisation of Companies Act: Decoding the Covid economic relief’ (Economic Times, 29 July2020) <https://economictimes.indiatimes.com/small-biz/legal/decriminalisation-of-companies-actdecoding-the-covid-economic-relief/articleshow/77235232.cms?from=mdr> accessed 24 July 2023;
Ruchika Chitravanshi, ‘Govt decriminalizes Companies Act to promote greater ease of doing business’(Business Standard, 21 September 2020) <https://www.business-standard.com/article/economy-231policy/govt-decriminalises-companies-act-to-promote-greater-ease-of-doing-business120092000398_1.html> accessed 24 July 2023.
MCA,
ReportoftheCompany
Law
Committee(November<https://www.mca.gov.in/Ministry/pdf/CLCReport_18112019.pdf> accessed 24 July 2023.
6752019),

676 The Committee deliberated on the penalties to be imposed on an enterprise for failure to provide therequisite information or supplying incorrect, incomplete, or misleading information under the Draft
DCB. The Committee noted that the CCI should be empowered to issue a show-cause notice to an SSDE
/ ADE under the Draft DCB indicating the contraventions alleged to have been committed, after
supplementary investigation or further inquiry, in a manner similar to the Competition Act. A viewwas expressed that any failure to provide information / the furnishing of incorrect, incomplete or
misleading information pursuant to such show-cause notice should not be penalised under the Draft
DCB as there is no such corresponding provision under the Competition Act. The Committee notedthat digital enterprises had greater incentives to not provide / provide incorrect information to prolong
inquiries or investigations against them, thereby hindering early detection and redressal of anticompetitive conduct. The Committee considered the importance of timely detection and disposal ofproceedings in digital markets, as well as the differences in approaches followed under the Competition
Act (ex-post intervention) vis-à-vis the Draft DCB (ex-ante intervention). The Committee thus opinedthat failure to provide information / providing incorrect information, pursuant to a show-cause noticeissued by the CCI after supplementary investigation or further inquiry, should be penalized under the
Draft DCB.
677 DMA, Article 30(1).
678 DMA, Article 30(2).
679 DMA, Article 30(3).
680 DMA, Article 31(1).
681 DMCC, Section 85.
682 DMCC, Section 87.
683 DMCC, Sections 86(2) and 88(2).
684 DMCC, Section 86(5).
685 DMCC, Section 86(4)(a).
686 DMCC, Section 86(5).
687 DMCC, Section 86(4)(b).
688 DMCC, Section 86(4)(c).
689 DMCC, Section 86(3).
690 DMCC, Section 87(1).
691 DMCC, Sections 87(2) and 87(3). ‘Individual’ may refer to senior manager or nominated officer of anundertaking.
692 DMCC, Section 88.

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693 DMCC, Section 88(3)(a).
694 DMCC, Section 88(3)(b).
695 DMCC, Section 88(3)(c).
696 DMCC, Section 88(5)(a).
697 DMCC, Section 88(5)(b).

DMCC, Section 99. Failure to comply with the conduct requirement or the pro-competitioninterventions may result in the directors of the undertaking being disqualified.
698

699 ARC, Section 81c (1).
700 ARC, Section 81c (2).
701 AICO, Sections 2(f)(1)(A) and (B).
702 AICO, Section 2(f)(3).
703 EPM, Sections 3(c)(1) and (2).
704 The Committee observed that generally, the starting point for penalty calculations is the ‘relevant

turnover’. The Committee notes that in the present case, the relevant turnover of the contravening
SSDEs, along with ADEs if any, may be used as the baseline value to compute penalties under the Draft
DCB.
705 A view was expressed that the ‘global relevant turnover’ of the SSDE should be the basis forcalculating the penalty cap under the Draft DCB. The Committee noted that pursuant to the decisionof the Supreme Court in Excel Crop, the criteria of ‘relevant turnover’, i.e. turnover relating to the
product of the enterprise in question, was adopted for the purpose of imposition of penalty; Excel Crop
Care Ltd. v. CCI & Ors., (2017) 8 SCC 47. The Committee however notes the difficulties associated withusing relevant turnover in certain scenarios such as those involving hub and spoke cartels. The
Committee also remained cognisant of the CCI’s decision in Nagrik Chetna Manch which held that theinterpretation of ‘turnover’ in Excel Crop would not be directly applicable in cases such as bid-rigging
and not having ‘relevant turnover’, thus defeating the objective of the Competition Act; Nagrik Chetna
Manch v. Fortified Security Solutions, CCI order dated 01 May 2018 in Case No. 50 of 2015, paragraph 96.
The Committee thus opined that using ‘global relevant turnover’ as a basis for calculation of ceiling on
penalty would not be feasible.
706 Umar Javeed and Ors v. Google LLC and Ors., CCI order dated 20 October 2022 in Case no. 39 of 2018;

XYZ v. Alphabet Inc. & Ors., CCI order dated 25 October 2022 in Case No. 07 of 2020. In both these cases,
the CCI held that the values of the local turnovers disclosed by the parties are inconsistent.
707 Competition Act, Explanation 2 to Section 27(b).
708 See Mr. Umar Javeed v. Google LLC, CCI order dated 20 October 2022 in Case No. 39 of 2018 and XYZ

v. Alphabet Inc. & Ors., CCI order dated 25 October 2022 in Case No. 07 of 2020. In the referred cases,
the CCI directed Google to submit revenue generated or arising/accruing from India or attributable toservices delivered in India. It was also directed to submit details of turnover and profit generated or
arising/accruing from its entire business operations in India (including its group entities) for the three
preceding financial years.
709 In the context of Article 101 of the TFEU, ‘undertakings’ are said to be any entities of personal,

tangible and intangible elements, engaged in an economic activity, irrespective of their legal status and233the way in which they are financed. When a company exercises decisive influence over anothercompany, they form a single economic entity and, hence, are part of the same undertaking. See‘Communication from the Commission: Guidelines on the applicability of Article 101 of the Treaty on
the Functioning of the European Union to horizontal co-operation agreements (2023/C 259/01)’ (21July2023),
paragraphs
10
and
11
<https://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=CELEX:52023XC0721(01)> accessed 23 January 2024.
710 Article 101 of the TFEU prohibits certain concerted practices that restrict competition, and Article

102 prohibits abuse of dominant position by an undertaking.
‘Guidelines for setting fines: Summaries of EU Legislation” (29 May 2020) <https://eurlex.europa.eu/EN/legal-content/summary/guidelines-for-setting-fines.html#keyterm_E0001>
accessed 23 January 2024. See also Guidelines on the method of setting fines imposed pursuant to Article
23(2)(a) of Regulation No 1/2003 (2006/C 210/02) (1 September 2006) <https://eurlex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52006XC0901(01)> accessed 23 January
2024.
711

712 DMA, Article 2(27).
713 DMA, Article 30(1). Further, Article 47 of the DMA indicates that the EC may adopt guidelines on

setting of fines under the DMA.
714 DMCC, Section 85(3) read with Section 19.
715 DMCC, Section 86(4)(a) read with Sections 86(3) and 86(5).

The Committee also noted the recent Supreme Court judgment on the ‘Group of Companies’
doctrine which held that the underlying basis for the application of doctrine rests on maintaining thecorporate separateness of the group companies while determining the common intention of the parties
to bind the non-signatory party to the arbitration agreement. The Supreme Court further observed thatwhether two or more companies constitute a single economic entity depends upon the concerted effortsof the companies to act in pursuance of a common endeavour or enterprise. See Cox and Kings Limited
v. SAP India Pvt. Ltd., 2023 SCC OnLine SC 1634.
716

The Committee decided to not consider mergers and acquisitions as an ACP for the purposes of thisReport. Chapter I, para 1.14 of this Report.
717

718 CCI E-commerce Market Study (2020), p. 26.
719 Annexure-III has been drafted considering the presentations made by stakeholders to the Committee

on 4th March 2023, 11th March 2023, and 24th March 2023. Any references to legislations and other terms
in this annexure should be construed with respect to the time period at which such presentations weremade to the Committee.
The Committee noted that certain stakeholders such as OLA and Netflix India made oral
submissions on the need for an ex-ante framework to regulate large digital enterprises. The Committee
has taken note of such submissions while preparing the Report.
720

721 The Committee noted the specific submission made by the Digital News Publishers Association

regarding large digital enterprises being non-transparent in respect of their revenue-sharing policies
with news publishers. In view of the same, the Digital News Publishers Association has suggested thata pre-facto bargaining code be put in place to eliminate the power imbalance between large digitalenterprises and news publishers. The Committee took note of the Bargaining Code under the Australianmodel wherein ex-ante standards are imposed on digital platforms carrying content by Australian news
businesses in order to address power imbalances in the news media sector.

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At the same time, the Committee was aware of the fact that the Bargaining Code in Australia seeks tolargely govern commercial relationships between two parties, i.e. Australian news businesses and‘designated’ digital platforms. The Draft DCB however does not seek to govern contractual
relationships / negotiations between two parties; rather it seeks to regulate any potential anticompetitive practices which large digital enterprises may engage in. The Committee noted that thescope of CCI’s powers could not extend to interference in contractual matters between two parties.
Further, the Committee observed that the ACCC operates under several mandates – competition,
consumeraffairs,
fair
tradingandproduct
safety;see
ACCC,“Aboutus”<https://www.accc.gov.au/about-us> accessed 7 August 2023. However, the CCI is the primary
enforcement authority for competition law in India and its mandate is limited to that extent.
Keeping in mind the differing approaches between the Indian and Australian models, the Committee
felt that this aspect should not be dealt with under the Draft DCB but should ideally be dealt with by
the concerned sectoral regulator such as the Ministry of Information and Broadcasting.

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