India’s digital economy is evolving at an unprecedented pace. With businesses of all sizes increasingly relying on digital platforms to reach consumers, a fair and competitive environment has become essential. In response to emerging challenges, the Government of India has proposed the Digital Competition Bill, 2024, aimed at promoting fair competition in the digital space and preventing monopolistic practices.
This landmark legislation seeks to regulate the conduct of large digital platforms while ensuring smaller businesses and startups are not unfairly disadvantaged. For Indian enterprises navigating the digital shift, understanding the implications of this Bill is crucial.
Why Was the Digital Competition Bill Introduced?
The Bill was introduced to address growing concerns about the concentration of market power among a few large digital players, often referred to as Systemically Significant Digital Enterprises (SSDEs). These platforms — due to their wide user base and influence — can potentially engage in practices that hinder fair competition.
Unlike traditional competition law, which responds after violations occur, the Digital Competition Bill introduces an ex-ante (preventive) approach. This proactive model aims to ensure fairness from the outset, aligning India with global regulatory trends seen in the EU, UK, and other jurisdictions.
Key Provisions of the Draft Bill
The draft law proposes several key obligations for SSDEs, including:
- Non-discrimination: Ensuring equal treatment for all business users and partners.
- No self-preferencing: Prohibiting platforms from giving undue advantage to their own products or services.
- Data fairness: Restricting the use of non-public data collected from business users.
- Interoperability and data portability: Enabling consumers to move easily between platforms.
A new Digital Competition Commission of India is also proposed to oversee compliance and enforcement.
Implications for Indian Businesses
For startups and MSMEs, the Bill is expected to level the playing field by preventing unfair practices by dominant platforms. Smaller businesses that rely on these platforms for visibility and sales may benefit from increased transparency and access.
On the other hand, businesses operating large digital platforms or scaling rapidly must closely examine their business models. Areas such as algorithmic decision-making, advertising policies, and data usage will come under greater scrutiny.
What Businesses Should Start Doing Now
Though still in draft form, the Bill signals a shift in digital regulation. Businesses can begin preparing by:
- Reviewing platform agreements and digital terms for compliance with fairness principles.
- Establishing internal compliance protocols to address future regulatory requirements.
- Seeking advisory support from professionals, especially Chartered Accountants and legal experts, to align digital operations with expected norms.
Enterprises with international exposure may also draw lessons from frameworks like the EU’s Digital Markets Act, which has influenced the design of India’s proposed legislation.
The Advisory Role of Chartered Accountants
Chartered Accountants are well-positioned to help businesses adapt to this regulatory shift. Their expertise in compliance, risk assessment, and corporate structuring will be essential for:
- Evaluating the financial and operational impact of compliance.
- Guiding clients in implementing fair digital practices.
- Supporting startups in aligning funding models and governance with new expectations.
As digital regulation becomes more central to business strategy, the advisory role of CAs will continue to grow in importance.
Conclusion
The Digital Competition Bill, 2024 represents a forward-looking effort to regulate India’s digital marketplace fairly and proactively. While it places new responsibilities on dominant platforms, it opens up opportunities for smaller players and promotes a healthier digital ecosystem. Businesses that understand and adapt to this new framework early will be better positioned for sustainable growth in the digital era.
