Striking the right balance: Rizwi on competition policy in the digital era

Bengaluru: Speaking to The Hans India Kazim Rizvi, Founding Director of public-policy think tank The Dialogue , underlined the urgent need for India to craft a balanced competition policy to sustain innovation while ensuring fair markets in the fast-growing digital economy.

Rizwi pointed out that India’s economic story is increasingly “being written in digital ink,” with over 110 million micro, small and medium enterprises (MSMEs) and more than 1.4 lakh recognised startups driving entrepreneurial activity across the country. “We are one of the largest and fastest-growing hubs of startups globally. As our market expands, the need for open and fair competition becomes vital,” he said.

According to him, barriers to entry—whether structural, regulatory, or behavioural—can quickly erode opportunities for smaller firms. A strong competition framework is therefore necessary not just to keep dominant incumbents accountable but also to encourage new entrants and ensure that innovation remains the core driver of economic growth.

“Competition law has a dual role. It must curb anti-competitive conduct while simultaneously promoting innovation and efficiency and protecting consumer interests,” Rizwi explained. He stressed that stable and predictable competition rules help create a level playing field where even the smallest startup can compete with the largest incumbent. “This underpins investor confidence, supports long-term planning and enables innovators to take risks without fear of being squeezed out by entrenched market power,” he noted.

Global lessons in digital competition

Reflecting on global experiences, Rizwi observed that the rise of large digital platforms has created entirely new kinds of markets, such as online advertising, that do not operate like traditional ones. “These markets bring their own competition challenges, and governments worldwide are racing to address them. Many have opted for strict ex-ante regulations, but such frameworks can backfire if not carefully designed,” he warned.

As an example, he cited the European Union’s Digital Markets Act (DMA), which was intended to rein in so-called “gatekeepers” and protect smaller players. However, compliance with the DMA and its companion law, the Digital Services Act (DSA), has reportedly cost European companies an additional €71 billion (-$80 billion)—about 0.3 percent of the EU’s GDP.

“These high compliance costs are forcing several startups to relocate outside the EU to escape onerous obligations,” Rizwi said. He added that critics believe the DMA may also be slowing Europe’s venture capital growth compared to the United States, weakening the continent’s competitive edge in emerging technologies. The EU is now reviewing the DMA amid concerns that its rules are harming smaller firms and stifling innovation.

India’s way forward

Drawing from these examples, Rizwi emphasised that India must avoid replicating such pitfalls. “We need a framework that protects competition, not competitors. The focus should be on fairness, innovation, and consumer welfare—not on creating barriers that only large incumbents can navigate,” he said.

He concluded that India’s strength lies in its vibrant entrepreneurial base, and preserving this requires competition policies that are stable, proportionate, and innovation-friendly. “If we strike the right balance, India can not only sustain its digital rise but also emerge as a global leader in the new economy,” Rizwi asserted.