2. This comes amid the reports that the Centre is looking to revisit a digital competition law with ex-ante regulations to curb the dominance of tech giants such as Google, Microsoft, and Amazon.
3. Over 60 per cent of feedback on including cloud services under the DCB was negative, mainly due to concerns about regulatory uncertainty, high compliance costs, the risk of arbitrary SSDE designations, and possible chilling effects on innovation and investment, especially for startups with thin margins, the policy research and consumer advocacy non-profit said.
4. It comes at a time when the Indian government is looking to require companies in critical sectors such as energy, telecom, and banking to use Made-in-India sovereign cloud systems. The consideration was reportedly prompted by a 2025 incident, where Microsoft abruptly blocked oil refiner Nayara Energy from its IT services.
5. This is said to have raised concerns in New Delhi’s policy circles around the dependence Indian companies have on crucial digital infrastructure services offered by foreign companies, and the need for them to build resilience against potential disruptions in the future.
6. Not-for-profit industry bodies such as Bharath Digital Infrastructure Association have also previously raised concerns of foreign-controlled digital infrastructure being vulnerable to potential ‘kill switch’ mechanisms.
What are the major provisions of the Competition Act?
7. On the recommendations of the Raghavan committee, the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) was repealed and replaced by the Competition Act, 2002. As amended by the Competition (Amendment) Act, 2007 and 2023, the act follows the philosophy of modern competition laws.
8. It prohibits anti-competitive agreements, and abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.
9. The government of India replaced the Competition Appellate Tribunal (COMPAT) established under Amendment Act 2007with the National Company Law Appellate Tribunal (NCLAT) in 2017.
10. Section 4(2)(a)(i) of the Competition Act, 2002 pertains to the abuse of a dominant position by an enterprise or group. Specifically, it prohibits the direct or indirect imposition of unfair or discriminatory conditions in the purchase or sale of goods or services.
11. The Competition (Amendment) Act, 2023 seeks to amend the Competition Act, 2002, to regulate mergers and acquisitions based on the value of transactions. Deals with transaction value of more than Rs 2,000 crore will require CCI’s approval.
What is the role of the Competition Commission of India?
1. CCI is the apex national competition regulator in India. It has been established (within the Ministry of Corporate Affairs) to enforce the competition law under the Competition Act, 2002.
2. The Commission consists of a Chairperson and not more than 6 Members appointed by the Central Government. It is a quasi-judicial body meaning that it has been vested with some functions and powers similar to a court.
3. It can investigate market issues like antitrust violations, hear disputes, examine witnesses, and pass legally binding orders and impose penalties.
(Infographic source: AI generated)
4. It is the statutory duty of the Commission to:
(i) Eliminate practices having an adverse effect on competition: After mergers and acquisitions, more powerful entities could engage in practices that are harmful to competition, such as setting prices unfairly, limiting choices for consumers, or stifling innovation by making it harder for smaller competitors to survive.
(ii) Promote and sustain competition: CCI’s role is to strike a balance, allowing businesses to grow and consolidate, but stepping in to prevent any actions that could lead to unfair market dominance.
(iii) Protect the interests of consumers: This involves ensuring that consumers benefit from fair prices, quality products, and a variety of choices in the market. As market dynamics evolve, especially with technological advancements and globalization, CCI’s role becomes increasingly significant in steering the Indian market towards sustainable and inclusive growth.
(iv) Ensure freedom of trade carried on by other participants in markets in India as provided in the Preamble as well as Section 18 of the Act.
5. CCI aims to foster an ecosystem where innovation thrives and consumer interests are protected. CCI’s approach is twofold — enforcement actions and advocacy measures.
6. Enforcement actions are taken to address potential anti-competitive practices by issuing suitable punitive and remedial solutions, whereas advocacy measures are undertaken with the stakeholders to foster a culture of competition in the markets and to nudge market participants towards competition compliance.
7. The Commission is also mandated to give its opinion on competition issues to government or statutory authority and to undertake competition advocacy for creating awareness of competition law.
8. It inquires into and takes action against any form of anti-competitive agreements between enterprises. These include collusive practices (such as cartelisation, price-fixing, bid-rigging etc.) and vertical restraints that harm the competitive landscape.
9. CCI also examines the conduct of dominant companies to ensure they do not abuse their position. Practices like predatory pricing, denial of market access, data monopolisation and exclusive agreements are scrutinised to maintain healthy competition.
What is the major challenge ahead for the Competition Commission of India in the digital era?
1. CCI needs to revisit its definition of ‘relevant market’ which is a tough task for regulators world-wide amid the digital age.
2. Technological developments like Web 3.0, AI, IoT, Blockchain and issues like data protection and privacy, search bias, platform neutrality, confidentiality, etc, have created a need for a robust competition law. Such a law should meet the demands of the technological era we live in.
3. CUTS identified the following competition concerns in the cloud services market:
(i) Cloud credits and discounts: This includes low-value credits, committed discount spends, and volume-based discounts that create lock-in effects.
(ii) Egress fees: Fees charged by cloud service providers for customers to transfer data of their infrastructure, preventing them from switching to other platforms or pursuing multi-cloud strategy.
(iii) Technical barriers and poor interoperability: They often lead to vendor lock-in, where users find it difficult to switch providers after their initial choice.
(iv) Licensing restrictions: Unilateral terms in licensing imposed by software vendors that could be restrictive for cloud providers.
(v) Tying and bundling: Tying is when the purchase of one product is conditioned on the mandatory use of another, while bundling is offering multiple products or services together at a discounted rate.
(vi) Self-preferencing: It refers to when a platform favours its own products, services, or affiliates over those of competitors, particularly when it controls the infrastructure or marketplace where competition occurs.
(vii) Data leveraging: It refers to the practice of dominant enterprises using their control over users’ personal and behavioural data to gain an unfair advantage in another market or suppress competition. Three key problems that could arise with control over large datasets by digital platforms are-– barriers to entry, issues with platform neutrality, and algorithmic collusion.
BEYOND THE NUGGET: CCI’s actions to curb anti- competitive and anti trust violations in digital market
1. CCI imposed a penalty of Rs 27.38 crore on ‘Intel Corporation’ for abusing its dominant position by imposing an “India Specific Warranty Policy” on boxed microprocessors (BMPs) from April 25, 2016 to April 1, 2024.
2. Back in November 2024, India’s competition watchdog held that WhatsApp abused its dominance of the over-the-top (OTT) messaging market to impose unfair terms on users after a privacy policy update in 2021.
3. The privacy policy led to the mandatory sharing of user data with other platforms owned by Meta such as Facebook and Instagram. It imposed a fine of Rs 213.14 crore and ordered it to implement certain behavioural changes.
4. In October 2022, CCI imposed a provisional penalty of Rs 1,337.76 crore ($162 million) on Google for “abusing its market dominant position” in multiple categories related to the Android mobile device ecosystem in the country.
Post Read Question
Consider the following statements regarding the Competition Commission of India (CCI):
1. It is a statutory body established under the Competition Act, 2002.’
2. It functions under the Ministry of Corporate Affairs.
3. It is responsible for investigating anti-competitive practices but cannot penalise the violators.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer: (a)
(Sources: Ex-ante competition rules for cloud services sees pushback from stakeholders: CUTS study, UPSC Essentials: One word a day – CCI, the statutory body, Competition Commission of India and the commitment to shaping a fair market environment)
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As digital markets evolve, can India’s competition watchdog keep pace with challenges such as Big Tech dominance, data leveraging and self-preferencing? (Image source: AI generated) 
(Infographic source: AI generated)
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