Data Cartels: How India’s Competition Law Can Regulate Data Sharing Between Digital Giants

Data Cartels: How India’s Competition Law Can Regulate Data Sharing Between Digital Giants

In this era of technological advancement, privacy is a concept confined to paper. It is a myth. The digital realm, viewed as a market, comprises a few key digital players, commonly referred to as digital giants. Data is a key asset that these giants possess and scramble to accumulate more, investing millions to protect the existing data in their possession.[1] To establish the importance and sacredness of data, consider the example of even our toasters spying on us, collecting data on our toasting habits, and sending it to the device manufacturer.

Data Cartels and Data Sharing: A New Type of Monopoly

In market terms, cartels refer to companies that collude to reduce competition through practices like price fixing and product manipulation, thereby violating antitrust laws. With access to vast amounts of data, major players like Amazon Web Services, Google Cloud, and Meta hold a significant advantage in understanding markets and consumers. When such data-rich companies enter into data-sharing agreements, the intent behind these collaborations becomes crucial. While agreements aimed at innovation or efficiency are lawful, those designed to form “data cartels” that restrict competition and distort markets are considered anti-competitive and illegal.

Digital Market and the Indian Competition Act: An Overview and Analysis of the Lack

The Indian Competition Act, 2002, (Act)[2] seeks to curb adverse effects on competition in India and to sustain and promote competition in the Indian market, benefiting consumers while promoting the country’s economic development.

Section 2 (c) of the Act defines a “cartel” in detail as an agreement between producers or service providers to limit or control market competition.[3] In the case of data giants, they can be classified as “service providers”. But “data” in itself cannot be classified as “goods” or “provision of service”. The nature of data is new, and its means of transferability is novel. Section 2(i) defines goods referencing the Sale of Goods Act, but does not include “data” in its ambit.[4] Thus, bringing in data cartels under the definition of goods would be overstretching the bounds of the literal definition provided in the Act. The term “provision of services” has not been defined in this Act, and hence, the ambit for including data services under this is huge. Services rendered by data giants can be classified as the provision of services. However, the problem of not being able to classify data as a category is pertinent, as there exists difficulty in placing units of data as a “service” or “goods”, which is logically flawed. This makes explaining the storage or distribution of data a hard job. Data sharing agreements made by data giants can be held void under Section 3 if they are found to be anti-competitive in nature.[5] Furthermore, Section 4 of the Act,[6] addresses the abuse of a dominant position by enterprises in the market. However, digital competition and competition regarding data cannot be brought within the ambit of the traditional Competition Act.

The Draft Digital Competition Bill of 2024, (Bill)[7] seeks to address this gap. The Committee on Digital Competition Law,[8] was established to assess the necessity of an ex-ante competition framework for digital markets in India. The draft Bill created Systemically Significant Digital Enterprises (SSDEs)[9] which are digital versions of dominant companies, determined using both quantitative (turnover and users) and qualitative (market impact and resources) criteria.[10] It defined Associate Digital Enterprises (ADEs)[11] within SSDE groups and covered Core Digital Services,[12] including search engines, browsers, and social networks. The Competition Commission of India (CCI) could fine companies up to 10% of their global sales,[13] and the Director-General could investigate and regulate companies before they break the law.[14]

This Bill, however, was withdrawn following the opposition by big tech companies in August 2025,[15] largely due to concerns over its broad scope, compliance burden, and definitional ambiguities. The government decided to launch a market study before re-drafting the Bill.[16] Despite its lacunae, the intent underpinning the Bill remains crucial. Therefore, this article suggests that the Digital Competition Bill should be implemented after addressing and rectifying these shortcomings, coupled with the proposed market study and its implications.

Lacunae in the Indian Digital Competition Bill, 2024:

A key contention in the Bill was the lack of technical expertise in the provisions. In the WhatsApp policy case,[17] wherein the Competition Commission of India fined the tech platform for proposing a condition that would allow sharing of user data with other Meta (which owns WhatsApp among other applications such as Facebook and Instagram) platforms and such condition was made necessary for users to accept to continue using WhatsApp services, the major contention put forth by the digital platform was that the CCI did not have the technical expertise to understand the ramifications of the policy.[18] The Bill stated that the Director-General of the CCI should conduct probes in case of violations.[19] The lack of technical understanding may be a reason for many digital giants to question the investigation that could be conducted under this Bill. This poses as an easy defence for tech companies, who can claim that the CCI did not have experts on its panel of investigation to understand the technical aspects of their policies and decisions. The Bill did not allow for the involvement of digital market economists or technological experts on the investigative teams. This omission made it harder for the Bill to deal with complicated, data-driven anti-competitive behaviour. If there isn't a specialised panel of experts, big tech companies may be able to dispute future investigations on procedural and interpretational grounds.

The Bill was ex-ante in nature, posing another area of concern. An ex-ante regulation seeks to anticipate anti-competitive tendencies before they can actually occur. This provides regulatory bodies with the opportunity to safeguard competition and consumer welfare by intervening promptly, before any harm has been caused. The current Competition Act is based on the ex-post format, wherein the CCI investigates and levies penalties in case violations are discovered. In the ex-ante Digital Competition Bill, a set of rules was prescribed to SSDEs. These were pre-set obligations that SSDEs must have met to ensure they don’t curb competition, as mentioned in Chapter III of the Bill.[20] Sections 9 to 15 of the Bill described the obligations, including fair and transparent dealings by the SSDE, the prohibition of self-preferencing of the SSDE’s products and services, and not restricting users from accessing, installing, and using third-party applications, among other rules. But because there were no clear ways to assess compliance or set limits for violations, it was ambiguous how these rules would be implemented. For example, the Bill did not define “preferential treatment” or “discriminatory access”, which gave regulators too much power. Furthermore, imposing rules on SSDEs can stifle innovation and foreign investment. Huge tech companies with franchises in India may find that following the rules is detrimental to their profit-making motives and market expansion, thus limiting investment in their Indian subsidiaries.

Moreover, the Bill restricted its scope to a small group of “core digital services”, such as social media networks, search engines, and web browsers.[21] Schedule I of the Bill elucidated the list of services that fell under the core digital services category. However, it did not account for AI platforms, data analytics companies, and digital advertising middlemen, which are gaining more market dominance through algorithmic control and data monopolisation. The Bill could become useless in dealing with the next generation of digital competition problems if it doesn’t cover AI ecosystems like generative AI platforms and machine learning service providers.

The Bill was silent about how the integration between this Bill and the Digital Personal Data Protection Act (DPDP)[22] will take place. It did not specify how CCI would work with the Data Protection Board (DPB)[23] when SSDEs misuse personal data for anti-competitive advantage. If a digital platform uses user data collected through coerced consent to keep competitors out of the market, would that be a breach of the DPDP or the Digital Competition Bill? The absence of an interoperability framework between these two regulators may result in jurisdictional overlaps, conflicting decisions, and regulatory inefficiency.

How These Issues Can Be Addressed:

The withdrawn Bill must first be brought forth for discussion. Certain changes could be incorporated to ensure the aforementioned lacunae are filled. To ensure that the Digital Competition Bill becomes an effective tool for safeguarding fair competition in digital markets, the following reforms are recommended:

First, the government could consider setting up a Digital Competition Commission or establishing a separate Digital Directorate within the CCI, assigning qualification criteria for its members, and making the investigations more credible and useful. This Commission can include professionals in data science, AI, algorithmic economics, and cybersecurity. This practice would be akin to the UK’s Digital Markets Unit (DMU)[24] and the EU’s Digital Markets Act (DMA)[25] enforcement procedures, which depend on experts from different fields.

Secondly, the ex-ante nature of the Bill must not be entirely removed. A hybrid approach combining ex-ante obligations and ex-post powers could be pragmatic. The Digital Competition Bill, 2024, can retain the basic rules for SSDEs to follow, such as being open about their data practices, making sure their systems are interoperable, and being cautious with their data. At the same time, the Competition Act of 2002 might keep its authority to punish and investigate anti-competitive behaviour after it has happened. Such integration would enable the CCI to take pre-emptive measures when dangers are evident, while maintaining due process through comprehensive investigation and adjudication.

Third, the Bill needs to be changed so that it clearly includes AI-driven platforms, big language model providers, and data brokerage companies. These actors are having a bigger impact on the competitive landscape by controlling access to data and algorithms. Adding them to the list of “core digital services” would make sure that regulations keep up with the times.

Fourthly, the Bill must provide for interoperability between platforms. This means sharing services between two or more SSDEs to reduce bugs, introduce seamless operations, and benefit consumers. A user heavily invested in Apple’s ecosystem (iPhone, MacBook, iCloud) cannot seamlessly switch to Android without losing purchased apps, iMessage history, and iCloud storage data, effectively locking them into Apple’s services.

Lastly, there needs to be a synergy between this Bill and the DPDP. In the WhatsApp data-sharing case, the CCI found that users’ data was being shared without voluntary consent. The consent was coerced. Such cases need a synergy between Competition Law and Data Protection Laws. However, in the case of Telefonaktiebolaget LM Ericson v. Competition Commission of India,[26] the Delhi High Court held that the Patents Act,[27] is applicable in the cited case as it deals with unreasonable licensing conditions and anti-competitive practices of patent holders. Lex specialis, a special law which is the Patents Act in this case, prevails over lex generalis, a general law which is the Competition Act in this scenario. This raises the age-old question of which law prevails over the other. Applying the judgment in the Telefonaktiebolaget case to the discussion at hand, would the DPDP prevail over the Competition Act? Due to the lack of a landmark precedent about this subject, it is up for debate. However, completely ousting CCI in cases of data privacy breaches wouldn’t be favourable, especially if the data breach has led to unfair trade practices or the abuse of an enterprise’s dominant position. Thus, a hand-in-hand co-operation of both laws is needed, without one law having primacy over the other.

The Digital Competition Bill, 2024, was justly criticised and then withdrawn, but its goal of making sure that digital marketplaces are fair can't be overlooked. Thus, a redrafted Bill taking into account different stakeholder data could become the cornerstone of India’s digital regulation framework. With data being the next generation’s asset and wealth, coming up with stringent laws is the only way to protect one’s prosperity, privacy, and digital well-being.

[1] Florian Zandt, Big Tech Invests Big in Cybersecurity, STATISTA, March 22, 2022, available at https://www.statista.com/chart/27088/gafam-spending-on-cybersecurity-deals-and-funding-per-year/?srsltid=AfmBOorzdjejUu_Cwur15wETE9LFFVSegw_ueCb1ruNLDYjyDO84mD5M (Last visited on October 10, 2025).

[2] Competition Act, 2002.

[3] Competition Act, 2002, § 2 (c): an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services.

[4] See id., § 2(i): goods as defined in the Sale of Goods Act, 1930, including debentures, stocks and shares

[5] See id., § 3(1): No enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India

[6] See id., § 4: A dominant position is defined in this Section as a position in the Indian market that the company enjoys by operating independently of competitive forces or affecting the competitors or consumers in the relevant market. An abuse of a dominant position is considered when an enterprise imposes discriminatory prices, predatory prices (selling at a price below the cost price), blocks or restricts market access, leverages dominance in one market to gain an advantage in another, or unfairly terms the purchase of goods or services.

[7] The Draft Digital Competition Bill, 2024.

[8] Ministry of Corporate Affairs, Press Release No. 2013947 (Issued on March 12, 2024).

[9] The Draft Digital Competition Bill, 2024, § 3.

[10] See id., § 3(2).

[11] See id., § 2(6) and Schedule-I.

[12] See id., § 4(9).

[13] See id., § 28(1).

[14] See id., § 16(1).

[15] Manu Kaushik, Govt to withdraw draft Digital Competition Bill, August 10, 2025, available at https://www.financialexpress.com/business/industry-govt-to-withdraw-draft-digital-competition-bill-3942328/ (Last visited on October 10, 2025).

[16] Id.

[17] In Re: Updated Terms of Service and Privacy Policy for WhatsApp users, Suo Motu Case No. 01 of 2021, Competition Commission of India, ¶ 263 and ¶ 264.

[18] Arpan Chaturvedi, Meta, Whatsapp Win Relief as India Tribunal Suspends Data Sharing Ban, REUTERS, January 23, 2025, available at https://www.reuters.com/technology/india-tribunal-puts-antitrust-order-whatsapp-meta-data-sharing-ban-on-hold-2025-01-23/ (Last visited October 5, 2025).

[19] Competition Act, 2002, § 16(1).

[20] The Draft Digital Competition Bill, 2024, §9 to §15.

[21] See id., § 2(6) and Schedule-I.

[22] The Digital Data Protection Act, 2023.

[23] See id., § 18.

[24]Department for Digital, Culture, Media & Sport, Competition and Markets Authority, The Rt Hon Kwasi Kwarteng and The Rt Hon Oliver Dowden CBE MP, New watchdog to boost online competition launches, April 7, 2021, available at https://www.gov.uk/government/news/new-watchdog-to-boost-online-competition-launches--3 (Last visited on October 10, 2025).

[25] The Digital Markets Act, 2022.

[26] Telefonaktiebolaget LM Ericson v. Competition Commission of India 2023 SCC OnLine Del 4078

[27] The Patents Act, 1979.