Competition reforms: A new wave of regulatory debates — from the Parliamentary Standing Committee’s 2022 report on digital markets to the 2024 recommendations of the Committee on Digital Competition Law — has revealed the urgent need to overhaul how the Competition Commission of India functions. The issues are not confined to digital monopolies; they extend to procurement rules, transparency standards, and enforcement mechanisms across sectors. If India is to build a fair and efficient market economy, reforms must focus on deterrence, penalties, and transparency in both competition law and public procurement.
The Competition Commission of India was created under the Competition Act, 2002, to promote competition and curb anti-competitive practices. Over two decades later, its performance has been mixed. While the CCI has investigated high-profile cases involving cartels, abuse of dominance, and mergers, enforcement delays and inconsistent penalties have undermined its credibility.
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Domination of a few digital intermediaries
Recent reports highlight how digital markets—dominated by a handful of “systemically important digital intermediaries” — pose unique challenges. The CDCL has called for an ex-ante regulatory framework, much like the European Union’s Digital Markets Act, to prevent anti-competitive practices such as self-preferencing, bundling, and deep discounting. Yet, the CCI’s current tools are primarily ex-post—investigating violations after they occur.
The delay between complaint, investigation, and penalty erodes deterrence. If India is serious about creating contestable digital and traditional markets, the CCI requires greater investigative autonomy, sharper timelines, and an ex-ante mandate for high-impact sectors.
Procurement rules and ONGC case
Competition law cannot function in isolation. Public procurement, which accounts for nearly 30% of India’s GDP, is a critical arena where transparency and competitive neutrality are often compromised. Rules governing large government contracts, especially in sectors like energy and infrastructure, remain opaque and vulnerable to manipulation.
The Oil and Natural Gas Corporation (ONGC), for instance, has faced criticism for tendering practices that allegedly favour select bidders and exclude smaller, innovative firms. A lack of standardised bidding criteria, frequent single-bid contracts, and inadequate grievance mechanisms weaken competition and raise costs for the taxpayer.
Internationally, governments have reformed procurement by mandating open digital portals, pre-disclosing evaluation metrics, and adopting strict conflict-of-interest rules. India must move in this direction. Aligning procurement with competition principles will ensure fair access for small and medium enterprises, while also curbing cartelisation and collusive bidding.
Transparency and deterrence in enforcement
Transparency is a prerequisite for trust in competition law. The CCI’s orders are often lengthy, legalistic, and inaccessible to ordinary businesses. Unlike the European Commission, which publishes detailed explanations of its reasoning, the CCI has not developed a tradition of issuing clear policy guidance.
Deterrence is another missing piece. Penalties imposed by the CCI are frequently reduced on appeal, creating uncertainty. In the Google Android case, for example, fines were cut drastically by the National Company Law Appellate Tribunal. This weakens the signal to dominant firms that anti-competitive behaviour will not pay.
A system where penalties are predictable, proportionate, and consistently upheld is essential. Without strong deterrence, India risks replicating the “cost of doing business” problem—where companies treat fines as an acceptable expense rather than a corrective mechanism.
Competition reforms: Lessons from global practices
The debate over a Digital Competition Law is not unique to India. The European Union has already implemented the Digital Markets Act, designating “gatekeepers” who must comply with strict conduct rules. Australia, South Korea, and the United Kingdom are experimenting with similar models.
India’s policymakers have been cautious, noting that premature regulation could stifle innovation and investment in the tech sector. Yet, the Parliamentary Standing Committee’s observation—that network effects and data concentration inevitably lead to monopolistic structures—is difficult to ignore.
The CDCL’s recommendations to regulate practices like bundling, platform neutrality, and exclusive tie-ups are steps in the right direction. But success will depend on India’s ability to adapt global templates to domestic realities—balancing innovation with fairness, and enforcement with ease of doing business.
Penalties, compliance, and market discipline
India must also strengthen its penalty regime. Current fines under the Competition Act are capped at 10% of turnover, but the methodology for calculating “relevant turnover” has been disputed repeatedly in courts. This ambiguity has resulted in lower-than-intended penalties for large corporations.
Global best practice suggests moving towards penalties based on global revenue, not just Indian operations, to reflect the true scale of digital multinationals. Moreover, a robust compliance framework is needed—requiring large firms to maintain antitrust compliance officers, mandatory reporting of high-risk practices, and whistle-blower protections for employees.
Without these, the market will continue to reward anti-competitive conduct, leaving SMEs, startups, and consumers at a disadvantage.
Towards a stronger competition regime
India’s competition law and procurement practices require a fundamental reset. Three reforms are urgent:
Strengthen the CCI’s mandate by granting ex-ante powers in digital and networked markets, setting strict timelines for investigations, and enhancing staff expertise in technology and data analysis.
Reform procurement rules to align with competition principles—mandating open tenders, transparent evaluation, and grievance redressal to eliminate single-bid contracts and cartelisation.
Enhance deterrence and penalties by adopting global revenue benchmarks, streamlining appeals, and ensuring penalties are upheld consistently.
A modernised competition regime must go hand in hand with transparency and accountability. India cannot afford a system where rules are opaque, penalties uncertain, and enforcement delayed. The cost is borne not just by consumers, but also by the economy’s most dynamic sectors—startups, SMEs, and innovators.
If implemented with seriousness, these reforms can ensure that India’s market economy remains fair, transparent, and globally competitive.