Regulating Competition in Digital Markets

Inspired by antitrust cases that have exposed anti-competitive practices in digital markets and judicial pronouncements that have contributed to the development of rules for pro-competitive conduct, a slew of new legislations is being enacted and proposed globally to regulate competition in digital markets, driven by the principle of ‘competition law through regulation’. This brief discusses ongoing debates around regulating digital markets in the context of their unique challenges, especially their enduring positions across markets. Various jurisdictions have adopted different approaches to ensure fair competition and prevent market distortions in digital markets, ranging from expanding the scope of existing tools available to competition regulators, to contemplating and legislating ex-ante regulation. India’s Draft Digital Competition Bill, 2024, which was released alongside the Report of the Committee on Digital Competition Law, also recommends an exante regulatory mechanism for digital markets to safeguard competition. This brief discusses the Bill and outlines the arguments for and against ex-ante regulations in India. The brief largely favours India exploring ex-ante regulations. However, rather than blanket regulations applied across diverse markets, it argues for market inquiries into each of the Core Digital Services of a Systemically Significant Digital Enterprise, so that differential obligations are curated based on the nature of the market. That said, the identified remedial obligations should be self-executing and compliance-driven, with deterrent penalties, minimising the need for continuous monitoring and onerous investigative procedures.