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Summary: India’s Draft Digital Competition Bill, 2024

The draft bill is part of the report presented by the Committee on Digital Competition Law (CDCL), which was set up by the government in February 2023.

India’s Ministry of Corporate Affairs (MCA) on March 12 released the draft Digital Competition Bill, 2024, for public consultation. Similar to the Digital Markets Act in the EU, this bill identifies large digital platforms and prescribes various obligations for them aimed at preventing anti-competitive conduct.

The bill prohibits large digital platforms, identified as Systemically Significant Digital Enterprises, from engaging in self-preferencing, restricting third-party apps, imposing anti-steering policies, misusing the data of business users, and bundling products and services. 

The draft bill is part of the report presented by the Committee on Digital Competition Law (CDCL), which was set up by the government in February 2023 to examine and report on the need for a separate law for competition in digital markets.

The CDCL was set up on the advice of the Parliamentary Standing Committee on Finance, which in December 2022 identified anti-competitive practices by Big Tech companies and recommended ex-ante regulations for digital markets. Ex-ante rules, as proposed in the Digital Competition Bill, aim to prevent anti-competitive conduct from occurring, as opposed to the current ex-post framework under the Competition Act, 2002, wherein the Competition Commission of India (CCI) intervenes after the occurrence of anti-competitive conduct.

The draft Digital Competition Bill, 2024, is open for public feedback until April 15, 2024. Interested stakeholders can submit their comments and suggestions over here

Key Definitions

Systemically Significant Digital Enterprise (SSDE): An enterprise offering a Core Digital Service in India and designated as an SSDE by the Competition Commission of India (CCI) based on factors outlined in the next section.

Core Digital Service: Refers to any service specified in Schedule I of the Act. As of now, the list includes:

  • online search engines
  • online social networking services
  • video-sharing platform services
  • interpersonal communications services
  • operating systems
  • web browsers
  • cloud services
  • advertising services
  • online intermediation services (includes web-hosting, service providers, payment sites, auction sites, app stores, e-commerce marketplaces and aggregators, etc.)

Designating Systemically Significant Digital Enterprises

The Competition Commission of India (CCI) may designate an enterprise as an SSDE in respect of a Core Digital Service it provides if the enterprise meets both of the following thresholds in each of the immediately preceding three financial years:

Financial threshold: The enterprise has a:

  • turnover in India greater than INR 4000 crore (~USD 482 million), or
  • global turnover greater than USD 30 billion, or
  • gross merchandise value in India greater than INR 16000 crore (~USD 1.9 billion), or
  • global market capitalisation greater than USD 75 billion.

User threshold: 

  • The core digital service provided by the enterprise has more than 1 crore (10 million) end-users in India, or
  • The core digital service provided by the enterprise has more than 10,000 business users in India.

The manner for calculating these numbers will be specified in subsequent regulations made by the CCI. Where the enterprise is a part of a group, all the above metrics shall be computed for the entire group.

Enterprises must self-report their status: An enterprise is obligated to notify CCI within ninety days of meeting the above thresholds in respect of one or more of its Core Digital Services. This includes notifying CCI about other enterprises within the group the enterprise belongs to, which are directly or indirectly involved in the provision of the Core Digital Service. The CCI may then pass an order designating the enterprise as an SSDE and identifying its Core Digital Services. The CCI may also ask any enterprise to furnish details concerning the above thresholds if the enterprise hasn’t voluntarily done so and designate it as an SSDE if it meets the above thresholds.

CCI has the power to designate any other enterprise as well: The CCI can designate any enterprise as an SSDE even if it does not meet the above financial and user thresholds if the Commission believes that such enterprise has a significant presence in respect of a Core Digital Service on an assessment of the information available with it and based factors like economic power of the enterprise, integration with other markets, dependence of end-users on the enterprise, barriers to entry, lock-in effects, network effects, social costs, etc. The enterprise will be allowed to explain why it should not be designated as an SSDE.

Designation of Associate Digital Enterprise (ADE): If an enterprise being designated as an SSDE is part of a group, and one or more other enterprises within such group are directly or indirectly involved in the provision of the Core Digital Service in India, the CCI may designate these enterprises as ADEs.

Preventing circumvention from designation: The bill expressly prohibits enterprises from directly or indirectly segmenting, dividing, subdividing, fragmenting or splitting services through contractual, commercial, technical or any other means to circumvent the thresholds.

Validity and renewal of designation: An enterprise shall be designated as an SSDE or an ADE for a period of three years, which will be automatically renewed unless the SSDE submits an application for revocation of designation due to no longer meeting the thresholds or if there is a significant change in market dynamics.

Obligations of Systemically Significant Digital Enterprises (SSDEs)

Systemically Significant Digital Enterprises (SSDEs) and their Associate Digital Enterprises (ADEs) are required to comply with the following obligations with respect to their Core Digital Services:

No self-preferencing: An SSDE should not, directly or indirectly, favour its own products or services, those of its related parties, or those of third parties with whom it has arrangements for the manufacture and sale of products or provision of services over the products and services offered by third-party business users on its platform.

No restrictions on usage of third-party applications: An SSDE cannot restrict or impede the ability of its users to download, install, operate or use third-party applications or other software on its platform and should allow users to choose, set and change the default settings.

No anti-steering policies: An SSDE should 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, unless such restrictions are integral to the provision of the Core Digital Service of the SSDE. The CCI will specify what may be considered “integral” to the SSDE.

No tying and bundling: An SSDE should not require or incentivise business users or end users to use one or more of the SSDE’s other products or services, those of its related parties, or those of third parties with whom the SSDS has arrangements, alongside the use of the identified Core Digital Service offered by the SSDE, unless the use of such products or services is integral to the provision of the Core Digital Service. The CCI will specify what may be considered “integral” to the SSDE.

Data usage obligations:

  • No using of non-public data of business users to compete with them: An SSDE should not, directly or indirectly, use or rely on non-public data of business users operating on its platform to compete with such business users on the platform. Non-public data includes 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 SSDE’s platform.
  • No cross-use of personal data without consent: An SSDE is also not allowed to, without the consent of the end users or business users, intermix or cross-use the personal data of end users or business users collected from different services offered by the SSDE or permit usage of such data by any third party.
  • Enabling data portability: An SSDE should allow business users and end users of its platform to easily port their data, in a format and manner as may be specified.

Fair and Transparent Dealing: An SSDE should operate in a fair, non-discriminatory, and transparent manner with end users and business users.

The above obligations don’t apply the same way to all the Core Digital Services. The CCI will specify the obligations as applicable to each Core Digital Service through regulations. The requirements prescribed by the CCI will also take into consideration the following factors the 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, and such other factors as may be prescribed. The CCI may also prescribe differential obligations to SSDEs and ADEs based on the nature of the market, the number of users in India, and other factors.

An SSDE cannot engage in any behaviour that undermines effective compliance with the above obligations, regardless of whether that behaviour is of a contractual, commercial or technical nature, or any other nature, or consists of the use of behavioural techniques or interface design.  It shall also not directly or indirectly prevent or restrict users from raising issues of non-compliance.

What happens in case of non-compliance?

CCI has the powers to conduct inquiries and impose orders and penalties: The CCI can order its Director General to conduct an investigation either on its own, based on a complaint from any person, or on reference from the government, if it believes there exists a case that an SSDE or ADE is in breach of its obligations under the Act. If the inquiry concludes that an SSDE or ADE is in contravention of the Act, the CCI may issue an order directing any enterprise to discontinue such conduct and impose a penalty. It can also direct the enterprise to modify its conduct in the manner specified in the order. CCI may also take action against other enterprises that are part of the same group as the violating SSDE if it believes they have contributed to the contravention. It can also launch an inquiry and pass an order even if an enterprise is outside India or an enterprise’s conduct is taking place outside India.  The Commission has the same powers as are vested in a Civil Court such as summoning people and documents.

Enterprises being investigated can propose a commitment or settlement: An enterprise that is being investigated can propose a commitment to the CCI before the Director General report is shared with it or a settlement after the report is shared but before an order is passed. These proposals can include a financial amount, changes in the conduct of the SSDE, and other terms that the CCI may specify. It is up to the CCI to accept or reject a commitment proposal based on the nature, gravity and impact of the alleged contraventions and effectiveness of the proposed commitments. The CCI also has the power to revoke settlements and commitments if it believes that the enterprise has not made full and true disclosure or there has been a material change in the facts.

Appeals can be made to the NLCAT and then the Supreme Court: An enterprise may file an appeal against the CCI’s directions and orders with the National Company Law Appellate Tribunal (NCLAT) after paying 25 percent of the penalty amount and within sixty days of receiving the direction or order.  The enterprise, the CCI or any other aggrieved person can file an appeal against the NCLAT order at the Supreme Court within sixty days of the Appellate Tirbunal’s order.


Penalty for non-compliance with the Act: The penalty imposed by CCI for non-compliance with the Act can be as high as 10 percent of the enterprises’ global turnover in the preceding financial year. How then turnover should be calculated will be specified later in through regulations. In some cases, such as failure to self-report SSDE status, not submitting compliance reports to the CCI, or submitting incorrect, incomplete or misleading information during an inquiry, the fine may be up to 1 percent of the enterprise’s global turnover.

Penalty for non-compliance with CCI directions and orders: The penalty for non-compliance with the orders of the CCI can be up to Rs 1 lakh for each day of non-compliance, subject to a maximum of Rs 10 crores. Failure to pay the penalty can result in imprisonment for a term which may extend to three years or a fine that may extend to Rs 25 crores or both. The CCI may also take help from the Income Tax department in recovery of the penalty.

Penalties on people in the company: The CCI may impose a penalty on every person who, at the time the contravention was committed, was in charge of, and was responsible to SSDE or its ADE for the conduct of its business, unless the conduct was without the person’s knowledge or the person had exercised all due diligence. A penalty may also be imposed on any director, manager, secretary or other officers of the company if it is proved that the contravention has taken place with their consent, or connivance, or is attributable to any neglect on their part. The penalty in both these cases can be up to ten per cent of the average income for the last three preceding financial years.

Compensation claim by any person: Any person aggrieved by non-compliance of obligations imposed under this Act by an SSDE or ADE, may approach the NLCAT or the Supreme Court for compensation per Section 53N of the Competition Act, 2002.

All penalties go to the Consolidated Fund of India: All sums realised by way of penalties, settlement, and recovery of legal costs will be credited to the Consolidated Fund of India.

Exemptions and other powers of the government

Power of the Central Government to exempt enterprises: The Central Government can issue a notification exempting an enterprise from one or more provisions of this Act:

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

Power to amend the list of Core Digital Services: The Central Government has the power to issue a notification modifying Schedules including Schedule I, which contains the list of Core Digital Services. It may request the CCI to examine and make recommendations on which services should be added or removed from the list.

Power to make rules: The Central Government may, by notification, make rules to carry out the provisions of this Act. Every rule made under the Act must be laid before the parliament as soon as it is made for a total period of thirty days. If both Houses agree to make any modification, the rule shall thereafter have effect only in such modified form.

Power to make regulations: The CCI may by notification, make regulations to carry out the purposes of this Act. Regulations can be made for matters such as the calculation of global turnover, the calculation of the number of users, the form to self-report SSDE status, the separate conduct requirements for each Core Digital Service, how users can carry out data portability, differential obligations for SSDEs, etc. To ensure transparency, CCI must publish draft regulations inviting public comments and publish a general statement of its response to the public comments. As for rules, every regulation must be laid before the parliament.

Power to issue guidelines: The CCI may publish guidelines on the provisions of this Act or the rules and regulations made thereunder. Guidelines, however, may not be construed as law.

Powers of the Central Government over CCI: The Central Government has the power to issue directions to the CCI. It can also supersede the Commission if the Commission is unable to discharge its functions, has not complied with the government’s directions, or if it is necessary in the public interest.

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