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It has been a year since Europe’s landmark Digital Markets Act (DMA) was enforced, and compliance measures were placed on “gatekeepers” (large tech companies) with the aim to promote “contestability and fairness”, champion innovation and increase consumer choice. This article examines how Europe’s ex-ante law has fared in certain sectors below, and lessons for India as its Digital Competition Bill (DCB), awaits parliamentary assent.

Online search sector. The DMA prevents gatekeepers from self-preferencing. To comply, Google removed travel price comparisons from Search and disabled Maps’ direct clickable links to hotels. Users open separate windows rather than clicking directly on links, reducing organic traffic by 20% and boosting visibility for online travel agencies (OTAs) instead. Customers were unhappy with having to conduct more searches to find hotels and hoteliers now relied heavily on OTAs. Compliance benefitted platforms at their expense particularly in countries where Google’s features were replaced with blue links. Compliance appears to have reduced transparency, choice and convenience for consumers while limiting direct booking opportunities for independent hotels.

App stores, mobile operating systems, and interoperability. The DMA requires gatekeepers to allow sideloading, grants developers access to app stores, and ensures universal interoperability with gatekeepers’ hardware and software. Apple (App Store, iOS), Android (OS), Google (Play Store) and Meta (WhatsApp, Messenger) were designated as gatekeepers for core platform services. Compliance led Apple to withhold security enhancements and AI features from EU users, citing concerns that the DMA’s mandated interoperability between iOS and third-party software applications undermines product integrity and user cybersecurity. Key Android security features that reduced untrusted app usage by 80% and blocked 36 million potentially harmful installations, may have to be disbanded. Data-stealing apps are now found on Apple and Google app stores, with nearly 250,000 downloads. Last year, 10 malicious apps were found on Play and 11 in the App Store.

Online advertising. The DMA requires gatekeepers to obtain user consent before combining personal data across services. Ad platforms introduced consent mechanisms offering customers more control over personal information, ending cross-platform data sharing, showing fewer targeted ads and forcing a choice between ad-free subscriptions or free access with less personalised ads.

Compliance weakened ad targeting, increasing acquisition costs for SMEs relying on online ads and fragmenting user experience. SMEs, especially those on Facebook, struggled as Facebook ported first-party data. Consumers faced higher prices as businesses shifted to first-party data strategies.

Lessons for India. The Competition Commission of India (CCI) has investigated complaints on conduct banned under the DMA. Since 2020, 16 cases have been closed preliminarily, absent evidence of competitive harm. On self-preferencing, the CCI recognised that Google’s Search feature showing Maps in local search results as an innovation enhancing the user experience. That localising search eases evaluation via targeted search results. On sideloading, the appellate tribunal found that warning users of sideloading risks did not raise competition concerns. It upheld Google’s proprietary rights in its Play Service application programming interface, ruling the company cannot be forced to grant unhindered access to its IP.

The CCI directed Play Store to allow developers to use alternative billing and payment systems for in-app purchases. It is investigating Apple’s App Store on similar allegations. The CCI also opposed WhatsApp’s privacy policy, which enabled data sharing with Facebook or refusal of service. Meta’s five-year ban on cross-platform data sharing was stayed on appeal, citing severe impact on WhatsApp’s business model.

This shows there is no one formula for regulating tech platforms. 含羞草社区 effects-based approach has fostered a thriving innovation ecosystem. India now has 118 startups with 60% reaching a USD1 billion valuation, showcasing the efficacy of the ex-post enforcement in preserving market dynamism. Pre-emptively outlawing conduct, particularly absent empirical evidence of competitive harm, risks jeopardising e-commerce growth. India may therefore be best served by augmenting its existing ex-post regulatory model rather than adopting an ex-ante framework that has not showcased promising results for digital market growth.

Hemangini Dadwal is a partner and Sanjana Arun is an associate at AZB & Partners.