Key Developments in India

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It is not just the digital economy that is changing the traditional tools of competition; antitrust authorities all over the world are playing catch-up with the digital economy and widening their analytical tools in assessing such conduct. As global antitrust regulators up the ante on closely surveying digital market players, the Indian antitrust authority, the Competition Commission of India (CCI), has also begun to delve deeper into its analysis of digital and high-technology markets.

Naturally, the CCI finds itself playing a decisive role in determining the course of the tech scrutiny in India, which has initiated probes into the likes of Amazon, Facebook, WhatsApp and other large indigenous digital market players. In so doing, it has recognised newer issues posed by the peculiarities of the digital world and has also attempted to adopt legal tests beyond that which is applied to the traditional competition models.

In this piece, we examine how the CCI has adapted its assessment of various competition issues raised by the digital sector in recent years.

The growth of India’s digital economy

A study conducted by McKinzie Global Institute reflects India as the second fastest digital adopter among 17 major digital economies. With covid-19 deeply entrenching online services in people’s day-to-day lives – and cementing the market position of players,[2] the digital economy has seen tremendous growth in India in the past year. The e-commerce segment is expected to grow to US$200 billion in 2026, from US$38.5 billion in 2017.[3]

The market features several global and local undertakings, such as Amazon, Reliance’s JioMart (e-commerce platforms owned by one of India’s largest conglomerates, Reliance Industries Ltd.), MakeMyTrip (online travel and ticketing), Uber and Ola – just to name a few. At the same time, the Indian e-commerce market features a host of new entrants who operate within a niche space and cater only to the requirement of a particular kind of product or service. The e-commerce market also features new entrants such as Nykaa (personal care and beauty), PharmEasy (online pharmacy), PayTM (online payments) and Zomato (food delivery) – who have capitalised on the e-commerce model and now cater to many consumers. These companies are now growing to the stage of publicly listing their shares, which speaks of the potential for growth in the Indian digital economy.[4]

In recent years, the players in the digital markets have grown from strength to strength as they enter multiple, related verticals. While this has fuelled growth and widespread use of e-commerce services, players have also altered their growth strategies, with some resorting to anticompetitive means. The Indian competition watchdog found itself in the midst of many such instances.

Competition regulation and the CCI’s assessment of conduct in digital markets

With the growing prominence of digital markets in India, the CCI has assessed issues like net neutrality, leveraging, network effects and collection of data leading to accumulation of market power, in both, its merger assessment and enforcement cases. Albeit a young regulator as compared to its international peers, the CCI has been quick to adapt to the emerging issues of the digital markets, as seen in some of its important decisions.

The merger control regime

In 2020, the CCI approved the acquisition of 9.99 per cent equity share capital by a wholly owned subsidiary of Facebook in Reliance Jio Infocomm Limited (Facebook/Reliance).[5] Reliance Jio is a subsidiary of Reliance Industries and is the largest telecommunications company in India. The investment enabled collaborations between the two undertakings in the online advertising and e-commerce space.

An interesting aspect of the collaboration was the commercial arrangement with the instant messaging platform WhatsApp (a subsidiary of Facebook), in relation to connecting users with Reliance’s new e-commerce marketplace, JioMart.

Acknowledging the growing synergies between the telecommunication industry and the digital technology space, the CCI approved the transaction, recognising its pro-competitive effects. At the same time, in its analysis, the CCI evaluated probable anticompetitive issues that could emerge as a fallout of such transactions. The CCI remarked that combinations can be analysed in light of data-backed market power, in which case the analysis ought to dwell upon the incentive that the parties have to pool or monetise such data. The nature of data possessed by Reliance Jio and Facebook was found to be complementary owing to a symbiotic relation between telecommunications service providers and mobile applications. Interestingly, this finding had little bearing on the analysis of the CCI, given that the parties submitted that they do not intend to share such complementary data as a part of the transaction. While there was no observation made on the potential avenues of data sharing between the parties, competition regulators are not strangers to revisiting merger control orders in case parties decide to share data at a later stage.[6] The CCI safeguarded such risks in this case by specifically leaving scope for an ex post enforcement review in case the transaction were to lead to any anticompetitive impact in future.

Although the pace at which players operate in digital markets is rapid, as is the elevation of certain players to becoming entrenched market leaders, the reliance on an ex post approach in an ex ante assessment may create market powers in this space that are difficult to challenge through competition.

Another issue pointed out in passing by the CCI in its assessment of the Facebook/Reliance combination was net neutrality. Owing to the complementary nature of the products offered by the parties, the CCI recognised the impact that such synergies may have on platform neutrality. However, it did not delve deeper into this issue and sought for a safety net from the role that other statutory regulators, such as the Telecom Regulatory Authority of India, may play in preventing exclusionary conduct as a result of such synergies. While the CCI is empowered to look into conduct that may violate principles of net neutrality, the telecommunications regulations in India deal with such issues and prohibit platforms from treating entities differently. These rules are specifically intended towards ensuring that telecommunications service providers do not manipulate traffic in a manner so as to provide enhanced internet services to certain players.[7] The CCI, relying on these rules, noted that the telecommunications regulations ensured that parties would abide by net neutrality.

Given that a remedy under the Competition Act may only lie after parties cross a certain degree of market power or jurisdictional thresholds, such rules are helpful in ensuring that already established players in a particular relevant market do not assert their market powers in related markets by leveraging their positions.

To cater to situations like these, international jurisdictions, such as the EU, have come up with gatekeeper laws to regulate the conduct of digital players. In India, a related role is sought to be played by the e-commerce rules, which were passed with an outlook to make the e-commerce industry more transparent.[8]

The CCI is also ensuring in its ex ante analysis that any perceived competitive harm is addressed. In approving the acquisition of shares by Hyundai Motor Company (and Kia Motor Company) in ANI Technologies (which is the parent of an Indian ride-sharing platform Ola),[9] the strategic agreement between the parties piqued the CCI’s interest insofar as its algorithm could (hypothetically) promote the use and leasing of Hyundai cars, among Ola’s drivers. In response, a voluntary modification was submitted to clarify that the strategic collaboration will be on a non-exclusive basis and no preference on OIa’s algorithm will be based on brand of vehicle.

In another assessment of players trying to make inroads into related markets within the digital space, the CCI assessed the acquisition of 49 per cent shares of Future Coupons Private Limited by Amazon (through its subsidiary). The competition regulator demarcated the different markets in which the parties were present, including online payments and logistics services. Notably, the CCI appreciated the intersectionality between the offline logistic services market and e-commerce platforms. It analysed the transaction in view of such vertical relationships, examining how such vertical relations could be a cause for concern. However, the presence of multiple logistics service providers in India assuaged concerns for the CCI. The CCI also noted that larger players existed in the online payments segment and, therefore, the transaction posed no concerns in that regard in such other markets where the parties’ activities overlapped.

These inroads by players operating in the digital space in related markets are being increasingly seen in the digital economy and are a testimony to diversification, which helps players to occupy a larger portion of the value chain and the digital ecosystem.

The tussle between Amazon and Reliance for acquisition of the various Future Group business arms, including its logistics and warehousing business, is an exemplary outcome of such attempts.[10] Reliance Industries Limited (Indian conglomerate giant and ultimate parent of Reliance Jio), through its subsidiaries, acquired the entire retail, wholesale, logistics and warehousing business of Future Group (a competing Indian conglomerate). The CCI in its analysis particularly took note of the complementary nature of the logistics business with retail and wholesale businesses, both online and offline. However, it concluded that the combination did not have any adverse impact on competition based on the presence of multiple competitors throughout the various segments, including logistics and last mile delivery, which included several new entrants.

While Reliance’s acquisition of the Future Group was challenged before an arbitral tribunal in light of Amazon’s right of first refusal, the CCI in the interim approved the transaction. However, Amazon has now been able to successfully refute Reliance’s acquisition before the Supreme Court of India, which recognised Amazon’s right of first refusal in the acquisition of Future Group. The order enforcing the award of the arbitral tribunal, has been further challenged before the Supreme Court of India and the transaction finds itself in the midst of protracted litigation.

The merger control regime in India has benefited from the CCI’s consideration of new methods of competing in the digital economy. The CCI has balanced ease of doing business with their regulatory mandate to safeguard against potential anticompetitive impact of certain transactions. However, deeper examination of the potential effects of a transaction can, in problematic transactions, aid the regulator in its attempt at ensuring that combinations do not result in high levels of concentration in the long run, given that network effects and feedback loops help assert market power in digital markets. The CCI has relied upon the presence of competitors to allay concerns of anticompetitive effects from a transaction. However, given that digital platforms operate in tandem with related markets (such as ‘e-commerce platforms and logistics’ or ‘online advertising and telecommunication services’), synergies between a large player in one market with another in a related market could help leverage its position in the value chain, leading to an overall high market power in the digital ecosystem.

The enforcement regime

India has seen a marked shift of consumers from brick-and-mortar industry to the online space, and the peculiarities in how competition takes place in the digital world have challenged and unsettled traditional producers and manufacturers in their competitive strategies. This has led them to express concerns regarding the way online players compete in the market. The vigorous growth of such players has not escaped the eye of the antitrust regulator either.

The chairperson of the CCI recently expressed concerns over digital players abusing their market power. Expressing concerns over platform neutrality, Ashok Gupta said: ‘In search ranking, you have to be transparent and your algorithm has to be unbiased. You cannot just rank businesses in your own opaque ways which nobody knows’.[11] The Department for Promotion of Industry and Internal Trade, in formulating the draft e-commerce policy bill, remarked upon the efficiencies attached to the use of data, while commenting on the level of opacity that companies using such data and algorithms maintain.[12]

The CCI has been mindful of potential anticompetitive conduct in e-commerce markets and the digital economy. The CCI’s 2020 e-commerce market study expressed concerns over potentially problematic conduct relating to issues such as platform neutrality and exclusivity agreements, among other things.[13] The CCI assessed competitive concerns in multiple e-commerce markets, including online marketplaces, online travel agencies, etc. Soon after its report, the CCI found merit in allegations that exclusive tie-up between one of India’s largest online travel agencies and hotel franchises led to the foreclosure of other competing hotel franchises. The CCI had expressed in its prima facie order that MakeMyTrip Pvt Ltd (a hotel aggregator) website was involved in an exclusivity agreement with budget hotel undertaking Oyo Rooms (MakeMyTrip Case), which required delisting of other hotel franchises, namely Fab Hotels and Treebo.[14]

The CCI also recognised the value of time in the digital economy. Pending the DG’s investigation report, the CCI appreciated that such delisting and the passage of time during investigation would diminish the value of the hotel franchise’s business. Granting an interim relief, MakeMyTrip was directed to relist the hotel chains on its website. The interim order of the CCI of India has been set aside by the Gujarat High Court. However, this order remains noteworthy as it was one of the first interim reliefs granted by the CCI in the digital space and demonstrates that the rapidly evolving digital economy and the elevation of players to market leaders is being increasingly recognised by the Commission.

Separately, despite growing concerns of leveraging in related markets against e-commerce players, the CCI has been careful in utilising its jurisdiction. Notably, the CCI found no merit in allegations against WhatsApp for mandatory pre-installation of WhatsApp Pay services, on all devices that used WhatsApp.[15] WhatsApp argued that their payment interface is in its beta testing phase and even if pre-installed would remain dormant unless a user actively registers to use it. The regulator dismissed the allegations since an unfair term must be intrinsically linked to injury or harm caused to consumer. Since the WhatsApp pay programme was an optional feature, its pre-installation caused no harm to consumers or restrict their choice to use other payment interfaces.

The CCI also had an opportunity to briefly assess the algorithmic pricing by online players and its likely fallout from cartelisation. The CCI’s findings, which dismissed allegations that the drivers of the two major cab aggregators in India indulged in a hub-and-spoke cartel by fixing prices through the pricing algorithms of the cab aggregators, passed the final test of the Supreme Court of India. The Supreme Court affirmed the finding of the CCI, denying the existence of a hub-and-spoke cartel between the drivers, allegedly facilitated through these aggregators. The CCI held that there was no evidence of any agreement among the cab aggregators inter se to establish a hub-and-spoke cartel. The CCI accepted the arguments of the cab aggregator that the price of each ride is decided on a number of factors such as the time, traffic, peak period, etc., and are very dynamic in nature.

In another instance, however, the CCI initiated investigation on its own motion against the changes made by WhatsApp to its privacy policy. The order is a first-of-its-kind investigation into a non-price factor for abuse by an alleged dominant entity. In its prima facie view (which was issued before the investigation had commenced), the CCI pointed out that WhatsApp’s new privacy policy was imposed on users mandatorily.[16] The policy allowed WhatsApp to share data with Facebook. The CCI ordered an investigation for want of consumer consent in WhatsApp’s actions that gave no choice to consumers as WhatsApp was tentatively considered to be dominant in the market of instant messaging.

The order of the CCI was assailed before the Delhi High Court, for want of jurisdiction. The case sits at the interface of competition laws and the data privacy laws in the country. Therefore, the CCI’s jurisdiction was challenged, arguing that the subject matter related to privacy, and was outside its regulatory mandate. The Delhi High Court upheld the jurisdiction of the CCI. It held that, although the substantial examination of the privacy policy is subject matter of litigation before the Supreme Court of India, the CCI’s investigation was limited to the examination of WhatsApp’s dominant position and its ability to impose terms and conditions on its users. The Delhi High Court also appreciated the competitive concerns in the matter, including lack of substitutes and high switching costs. However, appeals have been filed against the decision before the division bench of the High Court and the final outcome remains awaited.

Legislative changes

The process on the legislative front has not been nearly as dynamic. While initiatives have been taken by way of law reform committees and draft legislations, the changes still await Parliament’s assent.

The draft Competition Amendment Bill 2020 has been pending introduction before Parliament for some time now.[17] The Bill holds certain powers of the CCI in abeyance, including powers to introduce new thresholds for merger control assessments. Once introduced, the CCI may use such an enabling provision to expand its jurisdiction on mergers that exceed a particular deal value. This will particularly enhance the CCI’s scope of review over digital markets.

On the merger control side, legislatures around the world are considering assessing combinations based on deal value thresholds. It has been argued that the assets and turnover based thresholds have allowed many digital mergers to slip past antitrust regulators. The deal value thresholds have been adopted in a few jurisdictions. Notably, the German and Austrian competition authorities have amended the respective provisions on pre-merger notification to include transaction value thresholds.

As such, a few legislative changes have also been affected to account for the peculiarities of the way relevant markets are defined in the digital space. For example, the meaning of relevant market has been redefined within the German Competition legislation to include markets that involve free-of-cost services.[18]

Despite its efforts, the CCI’s powers remain limited by virtue of its inability to assess transactions below the dated thresholds of the current Indian competition law. The amendment act seeks to introduce a threshold based on the deal value, which would increase the level of scrutiny by the market regulator. The Indian Parliament is presently in its monsoon session. The passage of the Competition Amendment Bill 2020 will be a welcome development.

Market studies

On the advocacy side, the CCI has also conducted market studies to enhance the existing literature from an Indian perspective. Its market studies have covered three broad but connected subjects, including e-commerce, telecommunication and blockchain, which have a better informed host of readers, including consumers and industry stakeholders.

Recently, in late 2020, the CCI released an insightful market study on the telecommunications sector.[19] The study noted that, although the telecommunications services in India are extremely price sensitive, the introduction of a new player in the form Reliance Jio has shifted the meter of competition towards quality of service rather than merely price, and more importantly product bundling with related e-commerce services. The e-commerce segments are adding to an increasing number of non-price competition factors, which thrive on value-added services that are paired with telecommunications plans.

It was noted that any likely anticompetitive outcome resulting from the synergies between over-the-top (OTT) content providers and telecommunication companies would be safeguarded by way of the net neutrality principles that the telecommunication companies need to adhere to as part of the telecommunication rules. This was observed to ensure that there may not be any discrimination arising out of the partnerships between telecommunication companies and the OTT content providers. Stakeholders currently view this as a win-win situation, whereby both consumers and companies benefit.

The study also points out that the vertical convergence is not limited merely to OTT content, but also extends to other related e-commerce industries, such as e-commerce marketplaces, digital payment platforms and cloud-based technology services. This, the CCI notes, can be beneficial to consumers, but also has the tendency to create dependency. Although consumers benefit from lower search costs, such a suite of services creates a cul-de-sac,[20] making it difficult for users to switch. The study finds such integration to be analogous to the linking of numerous Facebook messaging applications including WhatsApp, Instagram and Messenger. The CCI thereby demonstrated a thorough awareness of the market realities, cautioning against the scrutiny of discriminatory practices in markets featuring such high walled gardens.


An ever-developing economy poses the CCI with an extremely dynamic regulatory space. Therefore, the complexity of regulation that the CCI of India is tasked with, is constantly evolving. The digital economy in India is in its nascency. To foster the recently observed growth, the competition regulator needs to balance regulation or intervention while ensuring that it does not chill innovation. The CCI, like all major competition regulators, is adopting a calibrated approach with intervention, if any, typically occurring after a full investigation. Only in extremely rare cases, like MakeMyTrip,[21] has the CCI intervened by way of interim relief like the European Commission did in Broadcomm (in relation to set-top-box and modem chipsets).[22] It would be interesting to assess whether the CCI mirrors the US, EC or German approach or creates its own model for assessment of digital economy issues going forward.

Although changes have been suggested by way of the Amendment Bill, pending its passage, the CCI has managed to creatively utilise its jurisdiction over the unique challenges posed by the digital economy in India. Digital economies are constantly evolving. High market shares can tend to be ephemeral in such constantly evolving markets. The CCI, in recognition of this, has in certain instances gone beyond traditional indicators of market shares and price parameters to focus on how competition in digital economy is evolving around non-price parameters, including privacy, to initiate an investigation into Facebook’s WhatsApp.

As the CCI strives to keep in step with international peers, the worldwide debate on the adequacy of existing competition and antitrust laws to deal with the ever-evolving issues raised by digital markets is picking up steam. With so many investigations pending before the CCI in the digital space, their conclusion would give further clarity as the CCI finds its place on the world stage.


1 Nisha Kaur Uberoi is a partner, Radhika Seth is a senior associate and Pramothesh Mukherjee is an associate at Trilegal. This chapter was accurate as at November 2021.

2 ‘How Digital India can become a success story’, Fortune India. 4 July 2021. [Accessible at:].

3 India E-Commerce Report. IBEF. June 2021. [Accessible at:].

4 ‘PayTM and Zomato IPOs point to coming wave of Indian Tech Listings’, Live Mint. 21 July 2021. Accessible at:

5 Combination Registration No. C-2020/06/747.

6 ‘Facebook faces EU fine over WhatsApp data-sharing’ [Accessible at:].

7 Regulatory Framework on Net Neutrality, Department of Telecommunications, 2018 [Accessible at:].

8 Consumer Protection (E-Commerce) Rules, 2020 [Accessible at:].

9 Combination Registration No. C-2019/09/682.

10 Combination Registration No. C-2020/09/771.

11 Rankings must be transparent; digital dominance a concern: CCI Chairman. Indian Express. 11 August 2021. [Accessible at:].

12 Consumer rights & data to be part of new e-commerce policy: DPIIT secretary. Financial Express. 6 February 2021. [Accessible at:].

13 Market Study On E-Commerce In India Key Findings and Observations. 8 January 2020. [Accessible at:].

14 Case No. 14 of 2019. Order under Section 33 of the Competition Act, 2002.

15 Case No. 15 of 2020, In Re: Harshita Chawla and WhatsApp Inc.

16 Suo Moto Case No. 01 of 2021, In Re: Updated Terms of Service and Privacy Policy for WhatsApp Users.

17 The Competition Amendment Bill 2020 (the Amendment Bill) was formulated in September 2020 after detailed deliberations by the Competition Law Review Committee, which was formed by the government of India to ensure that the Competition Act remains at speed with the market trends and practices.

18 The Tenth Amendment to the Act Against Restraints Of Competition – Digital Competition Act is in force. Gleiss Lutz. [Accessible at:].

19 Market Study On The Telecom Sector In India, Key Findings and Observations. Competition Commission of India. 22 January 2021. [Accessible at:].

20 ibid.

21 The decision, however, was set aside by consent by the state High Court and remanded back to the CCI.

22 Commission opens investigation into Broadcom and sends Statement of Objections seeking to impose interim measures in TV and modem chipsets markets [Accessible at:].

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