The Corporate & Commercial Law Society Blog, HNLU

Tag: Competition Act

Zero-Turnover, Zero Liability: Proxy Bidders and the Penalty Gap in Indian Competition Law

BY SHIVAM GUPTA AND PRAYAS DAS, THIRD-YEAR STUDENTS AT NLU,ODISHA

INTRODUCTION

When the Competition Commission of India (“CCI”) exposed the strategic deployment of zero-turnover proxy bidders in the landmark Pune Municipal Corporation tender cartel case, it laid bare a critical enforcement vulnerability in state procurement. Conventionally, Indian competition jurisprudence under the Competition Act, 2002 has treated bid-rigging as a harm that is curable ex-post through post-facto investigation and monetary penalties under Section 27. Bid-rigging produces a market tipping effect, similar to the network monopolies created in digital markets, and establishes cumulative incumbent advantages, such as pedigree, scaled infrastructure, and insider influence, which together dissuade any legitimate competition from competing for future procurement.

Bid-rigging further creates a closed ecosystem in which colluding insiders dominate the bid process and use their knowledge of the bidding process to tip the market for specific government contracts into a state of permanent monopoly. Once the market has tipped into a state of permanent monopoly, the ability to restore competition through robust ex-post enforcement is extremely limited since the structural foreclosure of competition cannot be easily undone. Once colluding parties are discovered and are subject to sanctions, the number of true competitors may have been reduced to the point where there are no longer viable bidders. Thus, bid-rigging not only produces overcharges associated with one procurement but also undermines the fundamental framework needed to create a legitimate bidding process for future procurements. In this article, the authors argue that bid-rigging in public procurement is better understood as a structural marketplace failure that causes permanent distortion. While public procurement is designed to optimize price and quality through competition, it remains uniquely vulnerable to systemic disruption. To address this gap, the discussion is structured in three parts: firstly, it demonstrates how proxy bidding induces market tipping; secondly, it examines the resulting penalty gap under existing turnover doctrines; and lastly, it proposes a shift toward ex-ante tender design and institutional reform.

ANALYTICAL FRAMEWORK OF COLLUSION: THE PMC CASE STUDY

The CCI, with its decision in the Pune Municipal Corporation Tender Cartel case (2015), shows how vulnerable the public procurement systems are. On November 10, 2025, the CCI found that Bipin Salunke set up a scheme for bid rigging that used Mahalaxmi Steels and Sanjay Agencies’ entities as proxy bidders to submit complementary and manipulated bids that were inflated between the years 2013 and 2015.

This investigation highlights some of the limitations of evaluating tender processes based on the number of tenders received as valid competitive offers. Complementary bids establish an artificial price floor for the tender and distort the benchmark used by the procuring entity. Therefore, even though the primary bidder may have appeared to be a real competitor, this determination was based upon artificially created comparisons, not the true value of the market, thereby allowing the cartel to extract excessive profits from public funds.

THE PENALTY PARADOX: NAVIGATING THE EXCEL CROP JURISPRUDENCE

Proxy bidding is a significant flaw in antitrust protection. The Supreme Court in Excel Crop Care Ltd v Competition Commission of India (2017) stated that penalties for antitrust violations must be based on relevant turnover or else be proportionate to the offender’s total turnover. In the Commission proceeding against proxy bidders such as Sanjay Agencies and Mahalaxmi Steels, those bidders argued that they had no relevant turnover as there was no activity on the solid waste management market.

The application of the relevant turnover standard in this case creates an enforcement gap; the bidders that utilised their proxies may not be subject to penalties for their actions or may be subject to disproportionate penalties compared to primary cartel members. The CCI found that proxy bidders would be liable for their involvement in the bid rigging as opposed to their participation in the market. Applying a strict relevant turnover standard to proxy bidders in bid-rigging cases creates a major enforcement vacuum that undermines the statutory purpose of the Competition Act, 2002; which, under its Preamble and Section 18, is enacted to prevent practices having an Appreciable Adverse Effect on Competition and to sustain fair market contestability by allowing non-market facilitators to evade legal liability entirely.

THE EU “LADDER SYSTEMS” AND FACILITATORS

The need to find a balance between deterrent and turnover-based penalties can also be seen in EU competition law. According to the 2006 Guidelines on Fines, there is a structured ‘ladder’ system for calculating fines that begins at the undertaking’s turnover in the relevant market and is adjusted for factors such as the seriousness of the infringement, duration of the infringement, and aggravating factors. In addition, the cap for any fine will not exceed 10% of the undertaking’s worldwide turnover to ensure that the fine is proportionate while retaining a deterrent effect.

A significant development occurred when the Court of Justice in AC-Treuhand AG v European Commission (“AC-Treuhand Case”) upheld the European Commission’s decision to impose calibrated lump sum fines on the undertaking that facilitated the cartel and did not have any turnover in the relevant market. Applying the normal methodology would have resulted in zero penalty for the undertaking. The Court of Justice stated that participation in a product market is not necessary for a finding of liability under Article 101 of the Treaty on the Functioning of the European Union (“TFEU”), and therefore, authorities can deviate from turnover-based methodologies to achieve effective deterrence in cases involving facilitators.

While the AC-Treuhand case is not binding on the CCI, it offers persuasive support for reading Section 27 of the Competition Act, 2002 expansively- treating turnover as a statutory penalty ceiling rather than an indispensable prerequisite for liability. Thereby permitting lump-sum penalties on facilitators lacking relevant turnover.

FROM EX-POST TO EX-ANTE: LESSONS FROM THE DIGITAL MARKETS ACT

The limitations of entirely ex-post penalties are also illustrated by the European Union’s Digital Markets Act (‘DMA’), which marks a paradigm shift from reactive to proactive regulation. Traditional ex post enforcement is typically too slow to recreate market contestability where markets are at risk of tipping; e.g., the investigation in the Google Shopping case lasted 7 years (2010-2017). During those 7 years, the market was tipped in such a way that, when the fine was eventually imposed, it would be impossible for the fine to restore market contestability.

The DMA takes the position that there are markets that are too weak for post-event regulations to be effective. Instead, it focuses on gatekeepers, meaning large platforms that meet certain user and financial measures, and it will have a pre-existing list of dos and don’ts. The DMA adopts an ex-ante approach to prevent market-tipping, address enforcement delays, and proactively preserves open markets before anti-competitive conduct becomes irreversible. While digital platforms rely on multi-sided network effects and procurement operates as a single-buyer monopsony, both exhibit identical tipping dynamics: repeated bid-rigging creates entrenched incumbent advantages such as artificially inflated contract pedigree, financial capacity, insider access. These acts as insurmountable entry barriers for outsiders. Once honest bidders exit the market due to perpetual foreclosure, ex-post fines cannot revive market contestability. By targeting gatekeepers with pre-existing obligations, the DMA’s core regulatory philosophy (replacing slow ex-post fines with proactive structural constraints) applies with equal force to public procurement to prevent irreversible market tipping before collusive dynamics become permanent.

A NEW MODEL FOR PROCUREMENT: EX-ANTE TENDER DESIGN

Embedding transparency requirements into the procurement authority’s system will increase the cost of collusion and deter cartels, enabling proactive market surveillance rather than reactive enforcement. The first mechanism is common-link disclosure, whereby bidders disclose shared directors, major shareholders, prior joint ventures, or common technological infrastructure (i.e., IP addresses), thereby transferring the burden of transparency to participants, similar to compliance models established under the DMA. The second mechanism is certification of independent infrastructure, whereby bidders must certify that they do not share bidding infrastructure (i.e., consultants, financial instruments, etc.). If the certification is false, the bidder will be disqualified and subject to enforcement action. The third mechanism is a warning in tender documents of potential penalties (based on the global turnover of the controlling entity and not just contract value) that proxy bidders or facilitators may incur, thereby deterring proxies from participating. These proposals represent a shift towards preventive market design while ensuring procedural fairness through objective and reviewable disclosures and allowing expert adjudicative bodies to make collusion decisions.

WAY FORWARD: INSTITUTIONAL COORDINATION AND IMPLEMENTATION

Indian legislations such as the Rule 149 of the General Financial Rules (GFR), 2017 mandates the use of pre-approval/e-permission arrangements to be integrated within online platforms, e.g., the Central Public Procurement Portal and Government e-Marketplace. Adopting this ‘compliance-first’ methodology can maintain and enforce an obligation from the initial point of entry, as the greatest number of risk factors occur at that point of entry.

The effectiveness of this will be maximised through efficient communication between the CCI and the various authorities involved in the procurement processes. Even if procurement practitioners identify any flags indicating non-compliance or anti-competitive behaviour; they do not possess the authority to investigate or act upon the competition issues; They need to refer it to the CCI as per Section 19(1)(b) of the Competition Act, 2002. To address this issue, a framework could be developed for providing information about suspected behaviours to the CCI, to allow for preliminary scrutiny before a full investigation is undertaken.

It will be necessary to gradually introduce ex-ante disclosures in the highest-risk sectors of procurement to protect against discouraging small bidders from participating. By introducing ex-ante disclosures in phases, the preventative actions taken to promote competition will still continue to be achievable and applicable within the principles of fairness and equity to all participants in public procurement.

CONCLUSION

Bid-rigging creates a distortion that can hamper competition in public procurement for the foreseeable future. In cases where individuals are culpable for their participation in a collusive operation, relying on relevant turnover is inadequate as a basis for imposing an appropriate penalty. The establishment of a penalty regime for facilitators of collusion based on global turnover by the CCI closes a significant enforcement gap. By incorporating ex-ante protective mechanisms into the tender design process and developing ex-post adjudication processes, India will be better able to protect market structures while ensuring that the purpose of imposing penalties aligns with the goals of creating and preserving open, fair and competitive markets for the public good.

October 8, 2026
Contesting The ‘Big Tech’ Tag: India’s Digital Competition Bill At A Turning Point

BY UJJWAL GUPTA AND BHAVISHYA GOSWAMI, SECOND- YEAR STUDENTS AT RMLNLU, LUCKNOW

INTRODUCTION

With India’s digital economy being nearly five times more productive than the rest of the economy, technological‍‌‍‍‌‍‌‍‍‌ companies have become central economic actors of a rapidly digitalising India, which prompted the need for a digital competition law to prevent the build-up of market power before it materialises. The Digital Competition Bill, 2024 (‘DCB’), aims at introducing ex-ante oversight to ensure competition in digital markets, thus complementing the already existing ex-post regime under the Competition Act, 2002. The DCB envisages a regime to identify Systemically Significant Digital Enterprises (‘SSDE’) and to impose conduct obligations on them.

However, the draft has sparked discussion about whether its design manages to achieve the proper balance between restraining potential gatekeepers and protecting the growth of India’s tech ecosystem. While industry players and policy-makers generally agree on the necessity to control highly concentrated digital power, they are still worried that this tag may negatively affect rapidly growing Indian companies. The emerging proposal to allow companies to contest their SSDE designation reflects this balance-seeking approach. It indicates that the balance between protecting competition and giving the regulated entities fair treatment is not lost, i.e. the control does not hamper the innovation, investment, and the rise of domestic digital ‍‌‍‍‌‍‌‍companies.

The SSDE DESIGNATION DEBATE

One‍‌‍‍‌‍‌‍‍‌ of the key ideas of the DCB is SSDEs, which are entities that, due to their scale, reach, or market interlinkages, require ex-ante regulatory oversight. Under section 3 of the draft Bill, a company may be designated as an SSDE if it meets certain financial and user-based criteria. For example, a turnover in India of ₹4000 crore, global market capitalisation of USD 75 billion, or at least one crore end users. Besides, the Competition Commission of India (‘CCI’) can also identify an enterprise as an SSDE, even if it does not meet these quantitative criteria, by using qualitative factors like network effects, market dependence, or data-driven advantages. This allows the CCI to take preventive measures by identifying “gatekeepers” before their dominance becomes monopoly power.

However, the Parliamentary Standing Committee and industry associations have pointed out that India’s comparatively low user threshold (one crore end users) might inadvertently prematurely rope in rapidly growing domestic firms, like Zomato or Paytm, that are still in the process of consolidating their market positions. By equating India’s digital scale with that of smaller Western markets, the Bill could act as a silent killer of innovation, deterring investment and freezing the entrepreneurial spirit. The concern is that the Bill’s broad definition of “systemic significance” could lead to a growth penalty and disincentivize the very growth India seeks to encourage under its “Digital India” and “Startup India” programs.

Globally, the DCB draws clear inspiration from the European Union’s Digital Markets Act, 2022 (‘DMA’) and the UK’s Digital Markets, Competition and Consumers Act, 2024 (‘DMCC’). Each of their aims is to control the gatekeeping power of big tech companies. However, the implementation of the measures varies. The DMA is limited to ten defined “core platform services”, and it has already identified seven gatekeepers: Alphabet, Amazon, Apple, Booking, Byte Dance, Meta, and Microsoft. Moreover, it permits rebuttals under exceptional circumstances, a measure that is not in the current draft DCB. The DMCC creates the concept of “strategic market status” for dominant firms and thus puts more focus on tailor-made conduct rules. As per Schedule I, the draft DCB identifies nine “Core Digital Services”, similar to the DMA, excluding “virtual assistants”, and introduces “Associate Digital Enterprises”, defined under section 2(2), an Indian innovation to ensure group-level accountability.

III. The Case for a Rebuttal Mechanism

As established earlier, a ‍‌‍‍‌major concern of technology firms about the DCB is the lack of a mechanism to challenge a designation as an SSDE. These firms see such a designation as bringing problems of high compliance costs and of reputational risk to them, thus potentially labelling them as monopolistic even before any wrongdoing is established.

The Twenty-Fifth Report of the Standing Committee on Finance recognised this problem. It stated that the current proposal has no provision for rebutting the presumption of designation based on quantitative thresholds, i.e., the Committee suggested referring to Article 3(5) of the DMA by implementing a “rebuttal mechanism in exceptional cases”. This would allow companies that meet or exceed quantitative criteria to demonstrate that they do not possess the qualitative features of gatekeepers, such as entrenched dominance or cross-market leveraging.

Article 3(5) of the DMA is a good example in this case. Under it, companies can show “sufficiently substantiated arguments” which “manifestly call into question” their presumed gatekeeper status. In ByteDance v. Commission, the General Court of the European Union set a high standard for the issue and demanded that the companies bring overwhelming evidence and not mere technical objections. Firms like Apple, Meta, and Byte Dance have used this provision as a ground to challenge their identification; however, the evidentiary burden is still significant, and market investigations go on despite the fact that compliance with obligations is expected within six months after designation. Yet, the EU’s model illustrates that a rebuttal does not weaken enforcement; rather, it enhances it by allowing for flexibility in rapidly changing markets without compromising the regulator’s intention.

The implementation of a similar mechanism in India would be beneficial in several ways. It would enhance the predictability of regulation and discouraging the over-designation of large but competitive firms, and also send a signal of institutional maturity consistent with international standards. In this context, the Centre is reportedly considering the introduction of an appeal mechanism that would allow firms to contest their designation after a market study on the digital sector is completed. However, the government still needs to deal with the possible disadvantages, such as the delay of enforcement against dominant players, the procedural burden on the CCI and the risk of strategic litigation by well-funded ‍‌‍‍‌‍‌‍‍‌corporations.

IV. Dynamic vs. Fixed Metrics: Rethinking ‘Big Tech’

The biggest challenge in DCB lies in the criteria for identifying SSDE as choosing between fixed quantitative metrics and dynamic qualitative assessments will shape administrative efficiency and long-term success. DCB follows primarily fixed metrics based on the DMA , having fixed quantitative criteria such as valuation or turnover for SSDE designation.

The biggest advantage of fixed metrics is its speed and legal certainty. It becomes very simple vis-à-vis the administrative screening process when one has clear numerical boundaries, which then allows CCI to quickly identify the potential firms that pose competitive risks. However, this approach has attracted a lot of criticism. Industry stakeholders opine that the thresholds in DCB are “too low” and oversimplistic in the wage of a unique economic context and population scale of India.

Another limitation is the risk of arbitrariness; if the benchmark were solely based on numerical terms, it could disconnect from the regulatory framework in finding a genuine entrenched competitive harm. For instance, in a market as large as India, having a high user database may only reflect the successful scaling and effective service delivery rather than having the real ability to act as an unchallengeable bottleneck. This challenge, where restriction is just imposed because a firm is successful irrespective of conserving if that firm has demonstrated any specific harmful market power, has led to a widespread demand that SSDEs forms should be allowed to contest this designation, and this tag should be revoked if they prove not to be harmful in the competitive or entrenched market power.

On the other hand, the dynamic criteria are recognised in the DMCC, where the firm must possess ‘substantial and entrenched market power’. Through this, the UK regime can put conduct requirements based on qualitative and contextual market analysis, rather than quantitative analysis. However, its effective application requires resources vis-à-vis institutional capacity and legal justification while imposing terms on powerful firms.

The dynamic criteria have been recognised by the CCI itself and provided a roadmap, which highlights the challenges arising out of the structural control that the big players have across the entire AI value chain and AI ecosystems, especially the control over data, computing resources, and models. The definition of the “significant presence” shall expand beyond turnover and should incorporate the firm’s control over the proprietary and high-quality resources, such as high-end infrastructure.

V. The Road Ahead: Regulation without Stifling Growth

The DCB will have a significant responsibility to manage the compliance needs of such a large country in its evolving shape. For that, the government is considering the establishment of a dedicated Digital Markets Unit within the CCI. It will be responsible for communicating with industry, academia, regulators, government, and other stakeholders, and facilitating cross-divisional discussions. It will avoid any structural damage caused by delays in the above-mentioned things.

Yet another challenge is the very limited capacity of Indian regulators compared to other jurisdictions, which leads to the execution of prescriptive and technically complex regulations being extremely challenging. This deficiency in terms of specialised economists, data scientists, and technology lawyers would be the deciding factor in this fast-changing world, and India needs to cope with this as soon as possible.

India’s number one priority is job creation through rapid growth, so that we can achieve sufficient wealth for all age groups. In the present scenario, policy experts have criticized the DCB, saying that it is “anti-bigness and anti-successful firms” that discourage Indian firms from expanding globally. Therefore, the DCB should maintain a balance that gives a fillip to competitiveness in the market while upholding the digital scale and innovation of one’s country.

The DCB overlaps with the recently implemented amendments to the Competition Act, 2002. The Competition (Amendment) Act, 2023, has introduced the Deal Value Threshold, which makes it compulsory for any merger and acquisition that exceeds INR 20 billion to be notified prior. The problem would be the friction between the conduct control that the DCB would govern through its conduct rules and prohibitions, and structural control, because the mergers and acquisitions are subject to DVT clearance under the Competition (Amendment) Act.

This dual scrutiny increases the legal complexity and transactional costs. Thus, if the proposed Digital Markets Unit under DCB lacks clear guidelines as to harmonise the existing inconsistencies between the conduct requirements and merger clearance conditions. This would lead to nothing but slowing down essential acquisitions imperative for scaling of the firm, and would contradict the overall aim of promoting efficient market dynamics.

December 16, 2025
Regulatory Turf Wars Resolved: Rethinking Regulatory Boundaries

NITIN PRADHAN AND MAHADEV KRISHNAN, FOURTH- YEAR STUDENTS AT ARMY LAW COLLEGE, PUNE AND NLUO, ORISSA

INTRODUCTION

The question of jurisdiction between the sectoral regulators and the Competition Commission of India (‘CCI’) is not new. Since the establishment of the CCI, concerns have been raised as to whether it is possible to co-exist with specialised regulators in technologically intensive sectors. The Kerala High Court (‘Court’), in Asianet Star Communications Pvt. Ltd. v. CCI & Ors. recently provided some sorely needed clarity by holding that the Telecom Regulatory Authority of India (‘TRAI’) and the CCI play different but complementary roles.

The Court stressed that the mandate of one of the regulators cannot be displaced by that of the other and that the interaction between the two regulators should be driven by functional harmony, rather than displacement. TRAI comes into play in the structural and technical regulation of the telecom sector, licensing, tariffs, interconnection, and service quality, which provide smooth foundations of operations. In comparison, the mandate of the CCI is to protect competition, ensure that dominance is not abused and to ensure fairness in the market. Naturally, the two spheres overlap. The decision by the Court is important in that it enhances regulatory synergy instead of turf wars and the fact that overlapping jurisdictions, despite being a challenging issue, can be harmonized by working together.

The case raises fundamental questions about institutional balance in markets where both technical oversight and competition enforcement are indispensable. More broadly, it signals the maturing of India’s regulatory architecture, where cooperation rather than conflict may increasingly define the relationship between regulators.

Both regulators tend to claim that they are the first responder during jurisdictional conflicts. TRAI makes such a claim when complaints are technical or regulatory-based, e.g. when complaints are about licensing or interconnection. On the contrary, CCI intervenes when the matter involves anti-competitive practice or damage to the fairness of the market, which may not be within the regulatory jurisdiction of TRAI.

It also gained national attention in the landmark decision of Bharti Airtel Ltd. v/s CCI. There, the Supreme Court ruled that whenever technical issues are involved then the sectoral regulator such as TRAI must suggest an opinion before the CCI steps in, this seemed to tilt the balance towards TRAI. However, this raises an important question; can sectoral regulation and competition law operate side by side without undermining each other?

In this article, the authors explain the different roles of TRAI and CCI and reflect upon what the Asianet v. CCI judgment means for businesses, regulators, and the future of regulatory practice in India. Aiming to shed light on a possible forward path towards a more coordinated and effective framework for addressing overlaps between sector-specific regulation and competition law.

BACKGROUND TO THE DISPUTE

The dispute started when a major Kerala-based multi-system operator (‘MSO’) called Asianet Digital Network Pvt. Ltd. (‘ADNPL’) filed a complaint with the CCI against one of the dominant broadcasters called Star India Pvt. Ltd. (‘SIPL’). ADNPL claimed that SIPL had misused its market dominance in the broadcasting service market by: (i) Granting disproportionately high discounts to a rival MSO, Kerala Communicators Cable Ltd. (KCCL); (ii) Entering into “sham marketing agreements” involving unjustified payments to KCCL; and (iii) Effectively denying market access to ADNPL by conferring undue advantages on its competitor.

On observing a prima facie case, the CCI issued an order of an investigation under Section 26(1) of the Competition Act, 2002 (‘Act’). SIPL opposed the argument that the complaint was clearly within the jurisdiction of TRAI, as it involved tariffs, discounts and interconnection agreements all of which were covered in details by TRAI Act, 1997. According to SIPL, the CCI had interfered with a domain that should be left to the sectoral regulator by intervening. ADNPL responded that TRAI governs technical and structural concerns and that discriminatory pricing and sham agreements are anti-competitive practices which are well within the jurisdiction of the CCI.

Therefore, the High Court was obliged to consider two points: whether the presence of TRAI denied the jurisdiction of CCI, and whether the Section 26(1) of the CCI direction to investigate on the basis of which it ordered a certain investigation without issuing prior notice, infringed natural justice.

COURT’S REASONING AND KEY FINDINGS

In the present case the Court took a measured approach to address the seeming conflict between the TRAI and the CCI. The Court recognised TRAI and CCI as specialised regulators, but with distinct mandates. TRAI’s jurisdiction is deeply rooted in the technical and operational aspects such as licensing, tariff regulation and interconnection. Whereas, the duty of CCI is to ensure the fair market behaviour, investigating abuse of dominance and maintaining competitive equilibrium.

Crucially, the Court declined the notion that an overlap of functions implied the jurisdictional exclusion. Instead, it emphasised upon maintaining functional harmony while echoing the principles laid down in Bharti Airtel case. It reaffirmed that sectoral expertise should not forbid competition oversight where market manipulation is concerned.

Regarding the procedure, the Court clarified that under Section 26(1) of the Act, the CCI is not required to issue prior notice before directing the DG to investigate. Additionally, the Court also clarified that marketing agreements, when used to disguise anti-competitive conduct, clearly falls under jurisdiction of CCI not TRAI’s.

Thus, the judgement upheld the autonomy of the CCI while also reaffirming the value of inter-regulatory cooperation rather than conflict.

EU EXPERIENCE: WHY TURF WARS ARE RARE

This is unlike the country India which has not experienced any conflict of jurisdiction between sectors within the European Union. This can be called the result of a highly orchestrated regulatory design. The Regulation 1/2003 clearly stipulates the application of Articles 101 and 102 TFEU, in parallel to national or sectoral regulations, whereas the ECN+ Directive (2019/1) takes the matter of coordination by supporting the national competition authorities with harmonization of powers and its integration into the European Competition Network (‘ECN’) The ECN serves as the facilitator of coherent enforcement so that the regulatory intersections do not result into the inter-institutional disagreements.

The reduction of redundancy and construction of cooperative enforcement is reflected not only in scholarly analysis, e.g., in Potocnik & Manzour, in European Papers, but also in the ICN, 2025 report. The principle has been entrenched in courts interpretation: in Deutsche Telekom (C-280/08 P) and Telefnicia (C-295/12 P), the CJEU said that even approved by the regulator tariffs could amount to margin compression under Article 102 TFEU. In Meta v Bundeskartellamt (C-252/21) decided more recently, the Court empowered competition authorities to take into account compliance with the GDPR and stressed that cooperation with regulators must be followed.

The combination of these aspects demonstrates that they are established on complementary and coordinating basis, with not much room left to turf wars as seen between TRAI and CCI in India continuously.

PREDATORY PRICING OR PRICE PENETRATION?

In the landmark Bharti Airtel Case, the SC was confronted with the critical question of whether Jio’s initial free pricing model amounted to predatory pricing under the Act. Bharti Airtel alleged that Jio’s deep pricing offering telecom services at virtually no cost was not a legitimate market entry strategy but a means to eliminate competition through price predation. The CCI, however, dismissed the complaint at the prima-facie stage, holding that no case of abuse of dominance was made out, especially since Jio was a new entrant and not a dominant player in the relevant market at the time.

The case not only clarified the line between legitimate price penetration and predatory pricing but also underscored the importance of TRAI’s sectoral expertise which includes regulating tariffs, interconnection agreements, and market entry conditions. It held that CCI should intervene only after TRAI has addressed the relevant technical and regulatory concerns.

The decision is particularly relevant in this case of similar allegations of discriminatory pricing and jurisdictional overlap between CCI and TRAI and therefore, the necessity of coordinated regulation and the balancing of market entry and anti-competitive protection in regulated industries.

IMPLICATIONS FOR BUSINESSES AND REGULATORY PRACTICE

The Asianet judgment is not just an institutional ground score settlement, but has real consequences on the market players. Telecom and media businesses will no longer be able to believe that their conformity to TRAI norms will exempt them of competition scrutiny. In even the most regulated industries, anti-competitive practices like discriminatory pricing, exclusive agreements or fake agreements could be subject to parallel proceedings by the CCI.

The judgement also hereby denoted that both regulatory due diligence is now a two-dimensional authentication, on one hand, sectoral compliance and on the other hand, competitive impact. Marketing agreements, tie-ups, or discount structures will not only have to be tested against TRAI guidelines but also against possible exposure to the competition law.

Furthermore, this facilitates a more cooperative style, switching from a turf war to a joint control that balances technical oversight and equity in the market. This move deters the exploitation of regulatory areas by businesses and ensures a transparent conduct across all operations.

CONCLUSION

The Asianet case is a milestone in the regulation development of India that was in conflict to cooperation. The Kerala High Court in maintaining the concurrent jurisdiction of TRAI and CCI, allowed that regulatory overlaps are not necessarily problematic provided both regulatory authorities are mindful of functional limits. In conjunction with Bharti Airtel, the ruling highlights the fact that the judiciary favours cooperation among regulators as opposed to competition.

Nonetheless, harmonisation through judges is not a complete solution. The convergence of telecom, media and technology sectors has been growing and as a result, overlaps will continue to increase. India should thus institutionalise inter-regulatory coordination by statutory reforms, memoranda of understandings or joint decision making. The UK and EU are good examples where coordination models are clear, and the regulators follow them. The Indian regulation of the future is not in the strict jurisdiction separation but in the collaborative models that provides predictability to the business, efficiency to the markets and fairness to the consumers.

October 3, 2025
Digital Competition Bill: Complementing or Competing with the Competition Act?

BY Winnie Bhat, SECOND- YEAR STUDENT AT NALSAR, HYDERABAD

Introduction

Data is the oil that fuels the engine of the digital world. The economic value and competitive significance of data accumulation for companies in the digital age cannot be overstated. It is in recognition of this synergy between competition and data privacy laws, that the Competition Commission of India (‘CCI’) has imposed a fine of Rs 213 crore on Meta, the parent company of WhatsApp, for abusing its dominant market position under Section 4 of the Competition Act, 2002 (‘CA’).

As digital markets evolve, so too must the legal frameworks that regulate them. This article considers whether the proposed Digital Competition Bill, 2024 (‘DCB’) enhances the current competition regime or risks undermining it through regulatory overlap. In doing so, it assesses how traditional competition tools have been stretched to meet new challenges and whether a shift toward an ex-ante model is necessary and prudent.

Reliance on Competition Act, 2002

In the absence of a dedicated digital competition framework, Indian regulators have increasingly relied on the CA to address issues of market concentration, data-driven dominance, and unfair terms imposed by Big Tech firms. One of the clearest examples of this reliance is the CCI’s scrutiny of WhatsApp’s 2021 privacy policy. In the present case, CCI found that WhatsApp’s 2021 privacy policy which mandated sharing of users’ data with WhatsApp and thereafter its subsequent sharing with Facebook vitiated the ‘free’, ‘optional’ and ‘well-informed’ consent of users as WhatsApp’s dominant position in the market coupled with network and tipping effects effectively left users with no real or practical choice but to accept its unfair terms.

This contrasts with the CCI’s previous stances in Vinod Kumar Gupta v WhatsApp and Harshita Chawla v WhatsApp & Facebook, where it declined to intervene because data privacy violation did not impact competition. However, in a slew of progressive developments, a market study by CCI has now recognized privacy as a non-price competition factor and the Supreme Court’s nod in 2022 for CCI to continue investigation in the Meta-WhatsApp mater has effectively granted CCI the jurisdiction to deal with issues relating to privacy that have an adverse effect on competition.

The facts of this case very closely resemble that of Bundeskartellamt v Facebook Inc.,2019 wherein the German competition regulator had flagged Facebook for imposing one sided terms about tracking users’ activity in the social networking market where consent was reduced to a mere formality. Both cases illustrate how dominant digital platforms exploit their market power to impose unfair terms on users, effectively bypassing meaningful consent. This pattern reflects a deeper structural issue—where existing competition law, focused on ex-post remedies, is used to address the unique challenges of digital markets. It is precisely this regulatory gap that the proposed DCB seeks to fill through its ex-ante approach.

Abuse of dominant positions by Big Tech companies in the digital era occurs in more subtle ways as the price of these services is paid for with users’ personal data. A unilateral modification in the data privacy policy leaves users vulnerable as they have little bargaining power against established corporate behemoths. These companies collect huge chunks of “Big data” by taking advantage of their dominance in one relevant market (in the present case, the instant messaging market) and use them in other relevant markets (social networking, personalized advertising, etc.) which gives them a significant edge against their competitors. This creates entry barriers and a disproportionate share of the market goes to a few large corporations resulting in monopoly-like conditions.

To deal with such issues, competition law first identifies a corporation’s dominant position in the market. Once this is established, it investigates the factors that lead to the abuse of this position. Here, the factor is collection of data which invades the privacy of users without their free and informed consent. The CCI, in its ruling against Meta, held WhatsApp to be in violation of Sections 4(2)(a)(i), 4(2)(c) and 4(2)(e) of the CA, dealing with imposition of unfair conditions in purchase of service, engagement in practices resulting in denial of market access and use of dominant position in one market to secure its market position in another relevant market respectively.

The Digital Competition Bill, 2024

The proposed Digital Competition Bill, 2024 when enacted, would signify a landmark shift in how India approaches competition regulation in digital markets. Unlike the CA, which operates on an ex-post basis; acting upon violations after analysing their effects, the DCB introduces a proactive approach that seeks to regulate the conduct of Systemically Significant Digital Enterprises (‘SSDEs’) through an ex-ante framework. SSDEs are large digital enterprises that enjoy a position of entrenched market power and serve as critical intermediaries between businesses and users. The DCB aims to curb their ability to engage in self-preferencing, data misuse, and other exclusionary practices before harm occurs, rather than waiting for evidence of anti-competitive outcomes. While this progressive approach aims to address the unique challenges posed by the dominance of digital giants, it also raises critical concerns about legislative overlap, disproportionate penalties on corporations and potential legal uncertainty.

A key issue with the coexistence of the DCB and the CA is the overlap in their regulatory scopes. The CA, particularly through Section 4, targets abuse of dominance through a detailed effects-based inquiry. As evidenced in the CCI’s ruling against WhatsApp, a compromise or breach of data privacy of the users will not be tolerated and has the potential to be considered as a means of abuse of an enterprise’s dominant position. By contrast, the DCB imposes predetermined obligations on SSDEs, which are deemed to have significant market power. Section 12 of the DCB prescribes certain limitations on the use of personal data of the users of SSDEs, whereas Section 16 grants the CCI the power to inquire into non-compliance if a prima facie case is made out, regardless of the effects such non-compliance may have on competition.

Concerns about dual enforcement

This duality creates an ambiguity. For instance, should a prima facie case involving data misuse by an SSDE, which unfairly elevates its market position, be assessed under the CA’s abuse of dominance provisions, or should it fall exclusively within the purview of the DCB? The risk of dual penalties further compounds these challenges. Section 28 (1) of the DCB empowers the CCI to impose significant fines (not exceeding 10% of its global turnover) on SSDEs for non-compliance with its obligations. However, under Section 48 of the CA, these entities are also subject to penalties for engaging in anti-competitive behaviour that may stem from the same act of data misuse.

Although, the protection against double jeopardy only applies to criminal cases, the spirit of double jeopardy is clearly visible in this case, wherein businesses could face disproportionate punishments for overlapping offenses, raising concerns about fairness and proportionality. This mirrors similar concerns in the European Union, where the Digital Markets Act (‘DMA’) (India’s DCB is modelled on EU’s DMA) and Articles 101 and 102 of the Treaty on the Functioning of the European Union (traditional EU competition law provisions) operate in tandem. However, EU’s DMA grants the European Commission overriding powers over the nations’ competition regulating authorities, which brings unique challenges and is not applicable in India since the regulating authority (CCI) oversees implementation of both the CA and DCB. This vests the CCI with considerable discretion in deciding which act takes precedence and their spheres of regulation. The MCA report leaves potential overlaps in proceedings to be resolved by the CCI on an ad hoc basis. Therefore, statutory clarity on the application of the DCB and the CA are essential to avoid inconsistency in outcomes.

The Way Forward

To address these challenges, India must focus on creating a harmonious regulatory framework. Moreover, a Digital Markets Coordination Council could be established to harmonize enforcement actions, share data, and resolve jurisdictional disputes. Such a body could include representatives from the CCI, the Ministry of Electronics and Information Technology (MeitY), and independent technical experts to ensure holistic oversight.

Proportional penalties are another area for reform. Lawmakers should ensure that corporations do not have to bear the burden of being punished in two different ways for the same offence. Introducing a standardised penalty framework across the DCB and CA would prevent over-penalisation and ensure fairness.

Since the DCB has not been enacted yet, India can pre-empt these concerns of overlap and ensure that the CA and DCB complement rather than compete with each other. The exact scope of a solution to these concerns is beyond the scope of this article, but by learning from the EU’s experiences and adopting a coordinated, balanced approach, India can create a regulatory framework that promotes innovation, safeguards competition, and protects consumers’ rights and interests in the digital age.

July 24, 2025
Algorithmic Enforcement and Anti-Competitive Effects: CCI vs. Swiggy and Zomato

BY VASHMATH POTLURI, THIRD-YEAR STUDENT AT NALSAR, HYDERABAD

INTRODUCTION

The food delivery market in India has been one of the most dynamic and volatile markets, witnessing the quick exit of players like Uber Eats and Food Panda, among others, while being dominated by Zomato and Swiggy with a whopping market share of 58% and 42%, respectively. While there are many factors for such dominance, the recent allegations of Price Parity Clauses (“PPCs”) and exclusive agreements by the National Restaurants Association of India (“NRAI”) against both these platforms shed some light on the reasons for such market share. The findings of the Director General (“DG”), as reported by Reuters, indicate that the Competition Commission of India (“CCI”) is proceeding against these platforms under section 3(4)(c) of the Competition Act, 2002 (“Act”) based on the presumption that Swiggy and Zomato operate in a vertical framework as intermediaries distinct from their restaurant partners. However, this article challenges this presumption and argues that Swiggy and Zomato’s ownership of cloud kitchens transforms their relationship with restaurants into one of direct competition. As a result, this paper pushes for a reclassification of this case under Section 3(3)(a) and (b), enabling a shift from a ‘rule of reason’ approach to a per se standard.

The article advances this argument in a two-fold manner. First, it will analyze the anti-competitive effects of PPCs and exclusivity agreements, particularly in conjunction with Swiggy and Zomato’s cloud kitchens. Second, it will examine the role of dynamic algorithms in furthering these practices, proposing the introduction of the Algorithmic Facilitation Standard (“AFS”) in the Act, to ensure regulatory scrutiny and transparency in the market in line with the approach of the EU.

HORIZONTAL PRICE FIXING AND MARKET ALLOCATION

The allegations by the NRAI that Swiggy and Zomato operate their cloud kitchens and enter into arrangements such as PPCs and exclusivity agreements throw light on the dominance of these platforms through anti-competitive practices. These practices demonstrate that these platforms are not merely intermediaries with restaurants as downstream partners, but competitors operating simultaneously in both the food preparation and delivery markets. This dual role works to the detriment of independent restaurants.

In the MakeMyTrip (“MMT-GO”) case, the CCI assessed the anti-competitive effects of wide Price Parity Clauses (“PPCs”) and exclusivity partnerships in a vertical framework between MakeMyTrip, Goibibo, and OYO with their hotel partners. The CCI found that these agreements restricted hotels from offering lower prices or better terms on competing platforms, creating entry barriers and limiting consumer choice. As a result, the CCI held that these agreements resulted in an Appreciable Adverse Effect on Competition (“AAEC”) — a standard under Section 19(3) of the Act, which examines factors such as foreclosure of competition, barriers to entry, and harm to consumer choice. Relying on these findings, this article argues that the anti-competitive practices of Swiggy and Zomato produce identical effects, such as inflated prices and foreclosure of competition, but in a horizontal framework rather than a vertical one.

Applying the findings of the MMT-GO on wide PPCs, the PPCs entered into by Swiggy and Zomato are wide because they suppress competition in the market by mandating that restaurants maintain uniform prices across all channels, including their direct platforms and competing delivery services. This eliminates price differentiation and forces restaurants to inflate prices, depriving consumers of competitive pricing or discounts. These clauses also ensure that Swiggy and Zomato’s cloud kitchens are insulated from price competition, as restaurants cannot undercut them even when operating more cost-effectively. On the other hand, exclusivity agreements further suppress competition by restricting restaurants from listing on competing platforms or offering direct delivery services, creating a “lock-in” effect. This limits consumer access to popular restaurants and forecloses rival platforms from competing effectively.

These arrangements unfairly establish the dominance of Swiggy and Zomato’s cloud kitchens by allowing them to leverage vast data generated through their platforms. This data provides critical insights into consumer preferences, including popular cuisines, peak ordering times, delivery locations, and pricing trends. Using this information, Swiggy and Zomato can strategically design their cloud kitchen offerings to align with market demand precisely, bypassing the trial-and-error process faced by independent restaurants. They can quickly identify underserved cuisines or delivery zones and establish cloud kitchens to fill these gaps with minimal risk and cost. This data-driven approach grants their cloud kitchens a significant competitive edge over independent restaurants, which lack access to such comprehensive data and must rely on slower, costlier market research methods.

The combined effects of PPC, exclusivity agreement, and cloud kitchens on a horizontal level, results in the creation of barriers to entry and foreclosure of competition, causing an AAEC under Section 19(3)(a) to (c). Hence, this article argues that the CCI must re-examine this case under Section 3(3)(a) and (b) through a ‘per se’ approach. Taking inspiration from the EU’s Vertical Block Exemption Regulation (“VBER”), which removed wide PPCs from the regulatory exemption, the CCI could impose cease-and-desist orders and monetary penalties, ensuring a competitive marketplace.

ALGORITHMIC FACILIATATION STANDARD

Swiggy and Zomato’s algorithms play a crucial role in enforcing PPCs and exclusivity agreements, amplifying their anti-competitive effects. These platforms use algorithms to monitor pricing across various channels, including restaurants’ direct platforms and competing delivery services, ensuring strict compliance with PPCs. By scanning for pricing discrepancies, the algorithms flag instances where restaurants offer lower prices on alternative channels. Non-compliant restaurants face automated penalties, such as reduced visibility in search results or exclusion from promotional campaigns, discouraging price competition. Similarly, these algorithms enforce exclusivity agreements by tracking restaurants’ activities on competing platforms. Exclusive partners receive preferential treatment, such as enhanced visibility, while restaurants breaching exclusivity face reduced exposure, limiting their ability to attract orders.

Operating as a “black box,” these algorithms lack transparency, leaving restaurants unaware of the reasons for penalties or visibility changes. This creates a unilateral power dynamic that disproportionately favours Swiggy and Zomato, making it difficult for restaurants to challenge or adapt to platform policies. In this context, the article proposes that the AFS identify the role of such algorithms and bring them under regulatory scrutiny. Under this, the CCI would be required to follow a two-step inquiry-

MANDATORY ALGORITHMIC DISCLOSURES:

The first step in the proposed AFS is to mandate disclosures by Swiggy and Zomato regarding their algorithmic decision-making. These platforms must provide information about the design, operation, and structure of their algorithms, specifically in relation to penalizing or incentivizing restaurants. Such disclosures should be made to the DG under Section 36(4)(b) of the Act during the investigation stage. This requirement mirrors the EU Platform to business regulations 2019/1150, which mandates transparency in ranking criteria, ensuring that platforms do not manipulate search results based on monetary compensation or preferential treatment.

EFFECTS BASED OUTCOME ANALYSIS:

The second step shifts the scrutiny from intent to effects, applying an effects-based outcome analysis to assess whether these algorithms control prices, foreclose competition, or limit consumer choice by restricting visibility or promotions. If these practices result in an AAEC, the burden of disproving their anti-competitive impact should shift onto Swiggy and Zomato, allowing the CCI to order a rollback of such algorithms, if necessary. This aligns with the EU Court of Justice’s ruling in the Google Shopping case which found algorithmic self-preferencing anti-competitive, and rejected short-term efficiency arguments as justifications for long-term market harm. Likewise, under Section 19(3)(d) to (f) of the Act, any efficiency claims by Swiggy and Zomato should be dismissed if they come at the expense of competition.

WAY FORWARD

This article proposes that the AFS could be incorporated into the Act in two ways. First, under the ‘Hub-and-Spoke’ model, introduced through the Competition Amendment Act, 2023, wherein, a central entity (hub) can facilitate anti-competitive coordination among independent entities (spokes), even if they do not explicitly collude with each other. In this context, Swiggy and Zomato function as hubs, using algorithms to impose price parity and exclusivity conditions on restaurants (spokes), effectively orchestrating market behavior without direct collusion between restaurants. Second, the liability of Swiggy and Zomato could be invoked under Section 2(b), as part of tacit collusion through algorithmic enforcement. Since intent is irrelevant under ‘per se’ approach, the AFS would impute intent constructively, aligning with the Competition Law Review Committee 2019’s recommendation of a “guilty until proven otherwise” standard in cases involving algorithmic anti-competitive practices.

CONCLUSION

While the case is still pending before the CCI, this article has established that Swiggy and Zomato’s anti-competitive practices produce effects similar to horizontal price fixing and market allocation under Section 3(3)(a) & (b). A reclassification accordingly would enable for a shift to ‘per se’ from ‘rule of reason’, under which the entire burden to prove the anti-competitive effects rests on the complainant, and in such situations where these practices are furthered by opaque algorithms, it becomes difficult to hold Swiggy and Zomato responsible for their actions. Thus, under the AFS, the mere presence of algorithms and assessment of their prima-facie effects after due disclosure to the CCI, the burden to disprove AAEC would be heavy on Swiggy and Zomato. This reclassification would represent a significant jurisprudential shift, setting a precedent for addressing algorithm-driven anti-competitive practices and establishing a framework for future actions against quick commerce platforms.

February 10, 2025