Govt orders market study to refine India’s Digital Competition Bill
The Indian government has commissioned a market study to inform the finalization of its Draft Digital Competition Bill, focusing on identifying Systemically Significant Digital Enterprises (SSDEs) and Core Digital Services.
Intelligence analysis by Gemini 2.5 Flash
India's Ministry of Corporate Affairs is adopting an "evidence-based and adaptive approach" to its proposed Digital Competition Bill. A new market study will examine thresholds for identifying major digital players and the scope of core digital services, aiming to create a balanced framework that supports competition, innovation, and market entry for startups and MSMEs.
Imagine the government is trying to make rules for the biggest online companies, like the ones that run your favorite apps or shopping sites. They want to make sure these big companies play fair and don't stop smaller, newer companies from having a chance. So, they're doing a big research project, like a school project, to gather all the facts and figure out the best rules before they make them official.
Analysis
The Indian government's decision to conduct a comprehensive market study before finalizing the Digital Competition Bill underscores a cautious and data-driven approach to regulating its burgeoning digital economy. This move follows extensive stakeholder feedback, indicating a desire to avoid unintended consequences that could stifle innovation or disproportionately affect Indian tech companies and MSMEs. The study is designed to provide empirical evidence, which is crucial for establishing a robust and equitable regulatory framework capable of addressing complex issues like market power and structural dominance in digital markets.
Systemically Significant Digital Enterprises
One of the primary objectives of the market study is to precisely define the qualitative and quantitative thresholds for identifying Systemically Significant Digital Enterprises (SSDEs). This involves determining financial and user-based criteria that would classify a digital entity as having significant market power, thereby subjecting it to the Bill's ex-ante regulations. The government aims to ensure that these thresholds are appropriate and do not inadvertently capture smaller, less dominant players, while effectively targeting the 'Big Tech' companies that the legislation is primarily intended to regulate. The assessment will also review the specific Core Digital Services that will fall under the Bill's purview, ensuring clarity and relevance in its application.
November 3, 2025
The timeline for this crucial market study began with the Request for Proposal (RFP) being floated on GeM on November 3, 2025, with a bid deadline of January 5, 2026. While the Ministry of Corporate Affairs has provided updates to the Committee through Office Memoranda dated November 17, 2025, and January 21, 2026, the results of the market study itself are not yet included in the public report. This indicates that the government is still in the data collection and analysis phase, emphasizing its commitment to a thorough process before making final decisions on the Bill's provisions. The findings are expected to be instrumental in guiding the final shape of the digital competition framework, ensuring it is balanced, proportionate, and forward-looking.
National Competition Policy
In a related clarification, the Ministry has stated that there are no current plans to revive the National Competition Policy (NCP), which was previously deferred by the Cabinet in July 2014. This decision suggests a focused approach on the Digital Competition Bill as a specialized framework for digital markets, rather than a broader overhaul of general competition policy. The Ministry noted that several amendments introduced through the Competition (Amendment) Act, 2023, already support the core objectives of the NCP, such as promoting competition, efficiency, and consumer welfare. This indicates that while a new overarching policy is not on the table, the government is actively strengthening its competition law framework through targeted legislative changes and specific market studies like the one for the Digital Competition Bill.
Key points
- India's government has ordered a market study to refine its Draft Digital Competition Bill.
- The study will define thresholds for Systemically Significant Digital Enterprises (SSDEs) and Core Digital Services.
- It will assess the Bill's impact on competition, innovation, startups, and MSMEs.
- The Ministry of Corporate Affairs is adopting an "evidence-based and adaptive approach" based on stakeholder feedback.
- The Competition Commission of India's (CCI) AI market study is part of the evidence base for the Bill.
- The government has no current plans to revive the National Competition Policy.
The evidence-based approach, including the market study and consideration of stakeholder feedback, could lead to a well-calibrated Digital Competition Bill that effectively addresses market power imbalances without stifling innovation, ultimately fostering a more competitive and fair digital ecosystem for Indian businesses and consumers.
The extensive market study and consultative process, while thorough, could lead to significant delays in implementing the Digital Competition Bill, prolonging uncertainty for businesses and potentially allowing existing market power issues to persist unchecked in the interim.
