India’s finance committee has urged the government to finalise its Digital Competition Bill and strengthen ex-ante regulation of Big Tech.
The Standing Committee on Finance wants the government to finalise the Digital Competition Bill (DCB), expand its scope to cover Virtual Assistants and Cloud Services. It wants a shift towards proactive, ex-ante regulation of digital markets. The recommendation was made in the Committee’s Thirty-Seventh Report, which was presented to Parliament on August 10, 2026.
The Committee has also called for an E-commerce Code of Conduct covering platform neutrality, algorithmic transparency and non-discriminatory data access for smaller businesses. It has further sought changes to the proposed Systemically Significant Digital Enterprise (SSDE) framework, more resources for the Competition Commission of India (CCI), and stronger enforcement.
The recommendations form part of the Committee’s action-taken report on its earlier review of the CCI and the digital landscape. The Government accepted seven of the eight recommendations. The Committee rejected its response to the recommendation on protecting MSMEs and small businesses.
Finalise the Digital Competition Bill: The Committee said the Competition Act’s traditional ex-post framework is “less effective in the fast-paced digital economy”. It said network effects and data advantages have concentrated economic power among large platforms acting as “gatekeepers”.
It therefore called for a “fundamental shift from a reactive to a proactive, ex-ante regulatory framework” to address practices including self-preferencing, predatory pricing, and tying and bundling.
However, the Committee does not want blanket restrictions. It recommended a “nuanced approach” to the DCB, “avoiding blanket prohibitions and allowing for context-specific assessments”.
The Committee also specifically called for Virtual Assistants, which are excluded from the draft, to be included “in line with global practices”. It said market studies on AI and other sectors should provide the “foundational evidence for refining the DCB”.
The Government said it has adopted an “evidence-based and adaptive approach” to finalising the Bill. It is conducting a market study on the proposed qualitative and quantitative thresholds, Core Digital Services, competition and market entry, and the impact on “smaller players including start-ups & MSME’s”.
The study, it said, will help create a “balanced and forward-looking digital competition framework” that ensures “fairness, competitive neutrality, and innovation”.
Strengthen CCI for digital competition: The Committee said implementing ex-ante regulation will require the CCI to develop capabilities beyond traditional legal and economic expertise.
It said digital markets require the ability to analyse “big data”, understand “algorithmic design”, and assess the impact of “Artificial Intelligence (AI) and machine learning” on competition and consumers.
As of March 31, 2024, only 113 of 195 sanctioned CCI posts were filled. The Director General’s office had 13 people against 41 sanctioned posts in 2024-25. The Ministry acknowledged a “huge gap between the sanctioned strength and the actual people who are in place.”
The Committee wants the government to expedite CCI’s cadre restructuring proposal and increase specialised positions in the Digital Markets Division. It also wants “flexible engagement models” to attract specialists, adequate funding, and training in “AI, machine learning, and algorithmic modeling”.
The DMD was established in September 2024 and has a core team of seven. The Government said a restructuring proposal involving 55 additional posts is under consideration.
Introduce an E-commerce Code of Conduct: The Committee wants CCI to notify a formal E-commerce Code of Conduct for smaller businesses dealing with large digital platforms.
The code should explicitly mandate “platform neutrality, algorithmic transparency, and non-discriminatory data access for smaller business users”.
The Committee also wants the DMD integrated into this framework. Its algorithmic auditors should provide “evidentiary support”, while the division should oversee “mandatory mediation mechanisms” between smaller businesses and dominant platforms.
The Committee said this could address the technical imbalance between small businesses and large platforms, while following global benchmarks such as the EU’s Platform-to-Business Regulation.
It also wants CCI to investigate predatory pricing and deep discounting by dominant online platforms and develop guidelines to clarify when these practices become anti-competitive. It wants mechanisms for “equitable data access for smaller businesses”.
The Committee has linked the code to a broader shift towards “risk-based oversight” of digital acquisitions. It said a “one-size-fits-all” Deal Value Threshold could fail to prevent gradual monopolisation through “invisible” market distortions such as data silos and algorithmic self-preferencing.
Reduce litigation delays: The Committee said CCI enforcement, particularly in digital markets, is weakened when investigations are stalled or orders are stayed by courts. As of April 30, 2025, CCI had imposed Rs 20,350.46 crore in penalties. Of this, Rs 18,512.28 crore had been stayed or dismissed by appellate courts. The remaining Rs 1,838.19 crore was “realizable”, of which CCI had recovered Rs 1,823.57 crore.
The Committee said the figures show that enforcement is “significantly undermined by legal challenges”. It wants CCI and MCA to reduce litigation delays, adopt “robust legal defense strategies” and assess the effectiveness of the 25% pre-deposit requirement.
This, it said, is necessary to ensure CCI’s actions produce “tangible deterrence and accountability”.
The Government said CCI is proactively defending cases, filing caveats and seeking early listings. It said the 25% pre-deposit requirement was introduced to discourage “frivolous appeals or sham litigation” intended to delay penalty payments.
Coordinate with MeitY and other regulators: The Committee wants CCI to strengthen coordination with regulators dealing with overlapping digital issues, particularly MeitY and the Data Protection Authority. It wants formal MoUs and “clear protocols for information sharing and joint action”. It also wants CCI to deepen cooperation with overseas competition authorities to address anti-competitive conduct by digital platforms.
The Committee said this is necessary for “sharing enforcement experiences, aligning regulatory strategies, and effectively tackling the global anti-competitive practices of digital platforms”.
The Government said CCI and MeitY met on August 28, 2025, to discuss the DPDP Act and its interface with competition law. It described the meeting as part of a “consultative regulatory approach” aimed at maintaining harmony between data governance and competition principles.
Proactive monitoring of digital markets: The Committee wants CCI to move from a reactive “post-mortem” approach towards proactive monitoring of digital markets. It said consumer harm in digital markets extends beyond prices to “reduced service quality, diminished privacy” and entry barriers created by dominant firms’ data accumulation.
The Committee wants CCI to expand market studies into emerging areas and ensure their findings “directly inform policy interventions”. It also wants consumer welfare assessed through non-price factors such as “data privacy and quality of service”.
The Government said CCI has conducted market studies covering e-commerce, telecom, film distribution, cab aggregators and medical diagnostics. It also said its AI and Competition market study was released in September 2025.
Implement the Bill in phases: The Committee said the DCB is “vital for fostering fair competition and aligning with global standards”, but its implementation must be “nuanced, phased, and evidence-based”.
It wants the Government to account for the CCI’s existing capacity constraints and stakeholder concerns about innovation and compliance costs for Indian technology companies and MSMEs.It specifically identified “structural dominance of super-apps”, the “need for interoperability” and regulation of “AI-based user interfaces” as issues requiring attention.
The Government said its market study will examine market power, structural dominance, interoperability and fairness while considering innovation, compliance costs and CCI capacity. It said the Committee’s recommendation would be taken forward while finalising the digital competition framework.
Add a rebuttal mechanism for SSDEs: The Committee said the DCB’s proposed SSDE framework could capture Indian companies prematurely. It noted that the Bill lacks the rebuttal mechanism available under the EU’s Digital Markets Act. It also pointed out that the DCB uses a “spread test” based on either end-user or business-user thresholds, while the DMA requires both.
The Committee therefore wants the Ministry to “refine the DCB’s thresholds and designation mechanisms” to prevent the “inadvertent” capture of fast-growing domestic firms. It also wants a rebuttal mechanism “in exceptional cases” to “ensure fairness and provide regulatory certainty”.
The Government said it is conducting a market study on the “Qualitative and Quantitative thresholds for Big Tech Companies and Core Digital Services (CDS)”, based on stakeholder suggestions.
Source: Medianama
