Introduction
The Competition (Amendment) Act 2023 represents the most comprehensive overhaul of India’s competition law framework since the Competition Act 2002 itself. Coming after years of review — the Competition Law Review Committee report (2019), the Parliamentary Standing Committee’s engagement, and a series of Digital Markets Study exercises by the Competition Commission of India (CCI) — the amendments reflect a recognition that the original Act, designed for a manufacturing-era economy with defined markets and identifiable market power, needed substantial updating for a digital economy characterised by platform dynamics, network effects, zero-price markets, and acquisitions of nascent competitors before they develop into threats.
Two years into the amended framework’s operation, the early enforcement signals from the CCI are beginning to clarify how the major new provisions will be interpreted in practice. The deal value threshold, the most discussed of the amendments, is generating its first wave of notification decisions. The definition of “digital markets” and the concept of “new entities” that qualify for the de minimis exception have not yet been definitively settled through enforcement. This article assesses what the amendments have introduced, where interpretation remains contested, and what the early enforcement evidence suggests about the CCI’s direction.
Legal Framework
The 2023 Amendment introduced several significant structural changes.
The deal value threshold is the most commercially immediate innovation. Prior to the amendment, merger notification to the CCI was triggered by asset and turnover thresholds — notifications were required when the combined entity’s assets or turnover exceeded specified limits. The amendment adds a new trigger: transactions where the consideration paid exceeds Rs. 2,000 crore and the target entity has “substantial business operations” in India, regardless of whether the target’s assets or turnover meet the traditional thresholds. This threshold was specifically designed to capture acquisitions of data-rich, early-stage technology companies that have significant operational presence in India (measured by user base, data volume, or transaction volumes) without proportionate financial statement metrics.
The definition of “substantial business operations” — the jurisdictional gateway for deal value notifications — has been specified in the implementing regulations. User base metrics, transaction volumes, and data processing capacity are among the factors considered. The CCI’s early notifications under this provision suggest that the threshold is being interpreted with commercial pragmatism rather than expansively: transactions involving purely offshore entities with limited Indian user bases have not uniformly attracted notification requirements, while transactions involving platforms with significant Indian user engagement have been notified even where financial thresholds were not met.
The amendment also introduced a provision for “anti-competitive agreements” involving digital markets specifically addressing self-preferencing, tying, and exclusionary practices by online platforms — codifying what the CCI had previously addressed through abuse of dominance analysis under Section 4.
CCI Enforcement Developments
The CCI’s ongoing investigation and subsequent orders in the Google cases — three separate proceedings addressing Google’s conduct in the Android ecosystem, the Play Store payments framework, and the general search advertising market — represent the most significant pre-amendment enforcement actions that set the context for the amended framework.
In the Android case, the CCI imposed a penalty of Rs. 1,337.76 crore and issued remedial orders requiring Google to allow device manufacturers to unbundle Google apps from Android, permit alternative app stores to be distributed through the Play Store, and allow third-party browsers and search engines to be set as defaults. The order drew on abuse of dominance analysis under Section 4 but engaged extensively with platform economics — network effects, multi-sided market dynamics, and the significance of data advantages — in ways that anticipated the 2023 amendments.
The National Company Law Appellate Tribunal (NCLAT) substantially upheld the CCI’s findings while modifying some remedial orders in 2023, and the matter has proceeded further to the Supreme Court on specific grounds, where it remains pending. The trajectory of the Google litigation will significantly influence how the amended framework’s provisions on digital markets are interpreted by the CCI and appellate bodies.
The CCI’s investigation of Amazon and Flipkart for alleged self-preferencing and exclusive brand launches — through which the platforms allegedly gave preferential treatment to preferred sellers and private labels — has been long-running and has generated significant political attention. The amended framework’s specific provisions on self-preferencing make this investigation the most directly relevant test case for the new law’s application.
Contemporary Issues and Analysis
The deal value threshold’s “substantial business operations” test creates significant uncertainty for transaction parties at the notification decision stage. Companies conducting self-assessments must determine whether their India business meets the threshold without clear bright-line rules for edge cases. The CCI has issued draft regulations on the metrics applicable to the test, but the regulations leave room for interpretive judgment on fact-specific situations.
A connected problem is gun-jumping risk — the risk that parties begin implementing a transaction before notification and clearance, which constitutes a violation. In traditional asset-and-turnover threshold-based notification, parties can relatively easily determine whether they are required to notify. Under the deal value threshold, uncertainty about whether notification is required creates a risk that parties gun-jump inadvertently. The amendment’s gun-jumping penalties — which can extend to 1% of the combined turnover or assets — create significant financial exposure for unintentional violations.
The digital markets definition is another source of interpretive ambiguity. The amendment refers to enterprises “operating in digital markets” as a factor in several provisions but does not define “digital markets” with precision. Whether a traditional retail company that operates an e-commerce website is “operating in digital markets” for the purposes of the amended framework, or whether the term is reserved for platform businesses with multi-sided dynamics, has not been settled.
Comparative and International Perspective
The EU’s Digital Markets Act (DMA), which came into full operation in 2024, provides the most developed regulatory framework for digital market regulation. It designates specific “gatekeepers” — large platforms meeting quantitative and qualitative thresholds — and imposes per se obligations on gatekeepers’ conduct, including prohibition of self-preferencing, mandatory interoperability requirements, and data access obligations for business users. The DMA’s per se approach contrasts with the CCI’s effects-based approach, which requires case-by-case economic analysis.
Germany’s amendment of the Act Against Restraints of Competition (GWB) in 2021 introduced a “paramount significance for competition across markets” concept, allowing the Bundeskartellamt to impose obligations on large digital platforms through an administrative decision process without a full abuse of dominance investigation. Meta, Amazon, Google, and Apple have all been designated under this provision.
India’s approach is closer to the traditional effects-based competition law model than to the EU’s ex ante regulatory framework, though the 2023 amendments’ specific digital market provisions reflect some convergence toward the ex ante approach.
Practical and Policy Implications
For technology companies and their advisers, the immediate practical impact is a significantly expanded merger notification obligation that requires deal value analysis as a standard part of transaction due diligence for any India-related acquisition above Rs. 2,000 crore. Target companies with substantial India user bases — even startups with minimal revenue — are now potentially notifiable acquisitions.
For digital platforms, the self-preferencing and exclusionary conduct provisions create an enhanced compliance obligation: internal governance reviews of platform policies that may advantage proprietary services over third-party competitors are now a standard part of platform legal compliance in India.
Suggestions and Reforms
The CCI should issue detailed guidance notes on the “substantial business operations” test, including worked examples of fact patterns that do and do not meet the threshold, to reduce the notification uncertainty burden on transaction parties. Germany’s Bundeskartellamt has published detailed guidance on equivalent concepts in the GWB, which could serve as a model.
The deal value regulations should specify a safe harbour — a combination of user base numbers and data processing volumes below which the “substantial business operations” test is definitively not met — providing transaction certainty for genuinely small transactions.
Conclusion
The Competition Amendment Act 2023 is an ambitious legislative response to the challenges that digital markets pose for traditional competition law analysis. Its provisions are broadly in the right direction, drawing on international experience while adapting to Indian market conditions. But ambition without clarity is a compliance burden rather than a competition policy achievement. The CCI’s early enforcement decisions will play a crucial role in building the interpretive framework that the statute itself does not fully provide, and the Commission’s willingness to engage with detailed, economically rigorous analysis in its first-generation digital market cases will determine whether the amended framework achieves its policy objectives.
