India's Proposed Digital Competition Framework: The License Raj by Another Name

Abstract: India’s proposed digital competition framework aims to regulate large digital firms. Modeled after the European Union (EU) Digital Markets Act, the proposed framework risks stifling innovation and investment. The framework uses arbitrary thresholds to determine which firms to regulate. It imposes vague, sweeping prohibitions on firms’ business practices. It grants the Competition Commission of India excessive discretionary power to impose unclear and yet to be defined obligations on such firms. The framework targets successful digital firms, echoing mistakes from India’s License Raj; in doing so, it contradicts India’s goal of attracting foreign investment and will hamper digital market growth. We argue that, instead of blanket ex ante regulations, India should consider targeted data privacy standards and avoid prematurely imitating EU policies.

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