Introduction

In the recent NCLAT proceedings, Meta contended that the Competition Commission of India’s (“CCI”) case concerning WhatsApp’s 2021 Privacy Policy relies on hypothetical scenarios and future conduct, arguing that no concrete evidence demonstrates actual harm in the relevant market for online display advertising. This line of reasoning reflects the Supreme Court’s approach in CCI v. Schott Glass (“Schott Glass”), which underscores the need for demonstrable competitive effects before finding abuse under Section 4(2) of the Competition Act, 2002 (“Act”). However, the structure of digital markets challenges the assumptions underlying an effects-based framework. Platforms such as WhatsApp operate in zero-price, multi-sided environments with strong network effects and cross-platform integration, where competitive harm often arises structurally rather than through immediately observable changes in price, output, or quality. In these markets, denial of market access is embedded in the architecture itself, creating latent barriers that rivals cannot overcome through conventional competition metrics.

This article uses the Policy as a lens to critique the applicability of an effects-based approach in digital markets. It proceeds in two parts. First, it examines how the effects-based doctrine functions in traditional markets under Section 4(2) of the Act by relying on Schott Glass. Second, it offers a structural analysis of how market access is denied, focusing on the subtle harms created by network effects, multi-sided platforms, and zero-price models. Finally, it proposes an alternative regulatory framework for digital markets, one based on a presumption of dominance and probabilistic risk, as a more effective approach than simply reacting to negative effects after they occur.

Effects based approach in traditional markets 

The effects-based doctrine in competition law evaluates abuse of dominance based on tangible or likely harm to competition or consumer welfare rather than on dominance or business practices alone. Market power itself is not unlawful, liability arises from its exercise. Often associated with a “consumer welfare” or “rule of reason” analysis, this approach helps separate legitimate, efficiency-enhancing strategies from exclusionary practices that distort the competitive process. 

Section 19(4) of the Act operationalises this doctrine by prescribing economic factors to guide the assessment of dominance and its abuse, including market share, enterprise resources, entry barriers, countervailing buyer power, consumer dependence and overall market structure. Therefore, conduct is scrutinized to determine if it truly harms competition or simply reflects superior efficiency. Liability hinges on a demonstrable distortion of the market, not on dominance per se.

The Supreme Court’s reasoning in Schott Glass illustrates the approach in practice. Although the case involved allegations of margin squeeze, the Court focused on measurable competitive effects. Applying Section 19(4) factors, it examined whether rivals had meaningful market access, whether entry barriers had increased, and whether new entrants could compete. Evidence showed competitors remained profitable and entry was feasible, thus no foreclosure occurred. The judgment reaffirmed that neither dominance nor contractual arrangements alone trigger liability, only evidence of competitive harm does.

This effects-based framework offers several advantages in conventional markets. It prevents arbitrary intervention ensuring practices such as volume based rebates or vertical integration are not penalised absent actual harm. It enhances predictability by grounding enforcement in observable outcomes and directs regulatory action at genuine threats rather than theoretical concerns. These strengths, however, rely on the assumption that competitive harm is immediate, measurable and observable through indicators such as rival profitability, entry patterns or price output shifts.

While this assumption holds in conventional markets, it is less applicable to digital markets, where harm often manifests subtly. Network effects, data advantages and algorithmic visibility can exclude competitors without immediate price or output changes. Consumer harm may remain latent, surfacing only after rivals are marginalised or user choice is narrowed. In such contexts, the traditional effects-based approach may fail to detect exclusionary dynamics until it is too late, raising the question of whether enforcement grounded solely in observable effects can adequately protect competition in digital markets.

Structure over effects in digital markets 

In digital markets, network effects create a natural path to dominance. As a product or service gains more users, its value increases for everyone, producing a self-reinforcing feedback loop that entrenches incumbents. In messaging platforms, each additional user increases the services value both for existing participants and for adjacent groups, such as advertisers or developers. The OECD has observed that even minor early advantages can tip markets irreversibly toward a single winner creating barriers long before traditional competition law can detect harm. In such markets, exclusion is not the result of discrete behaviour but of the design and architecture of the market itself.

Multi-sidedness magnifies this structural entrenchment because platforms do not merely connect a single set of users, they mediate interactions across distinct but interdependent groups. Dominance on one side, for example, messaging enhances value on another, such as advertising, generating reinforcing loops of dependence. In Google Android, the Commission found that tying Google search engine and Chrome browser to the widely adopted Android OS channeled traffic toward Google services, reinforcing dominance across markets without overt exclusion. Likewise, in Epic Games v. Apple, Apple leveraged App Store control to mandate use of its own payment system extending power from app distribution into payments and foreclosing alternative providers. These cases demonstrate that multi-sided interdependencies allow incumbents to convert dominance on one side of a platform into leverage across others, creating structural barriers that are difficult for rivals to overcome.

Beyond these interdependencies, the zero-price model introduces additional layers of complexity because users “pay” not with currency but with data, which renders conventional tools such as SSNIP or SSNDQ largely inapplicable. The SSNIP test presumes a monetary benchmark to test whether consumers would switch to other products, while SSNDQ assumes observable quality that would drive consumers to switch. In zero-price markets, neither applies, because network lock-in makes users tolerate degraded privacy or service quality, and competitors cannot replicate the incumbent’s dataset to offer comparable value. The CCI has recognised that even free services involve consideration in the form of user data. Structural denial therefore arises as an intrinsic market feature, producing harms such as privacy lock-in, innovation foreclosure, and data-driven exclusion, all of which occur independently of observable price or output changes.

Section 4(2)(c) of the Act, 2002 addresses precisely this form of structural denial. The provision prohibits a dominant enterprise from engaging in conduct that leads to denial of market access “in any manner.” In Umar Javeed, Sukarma Thapar, Aaqib Javeed v. Google LLC & Ors, the Supreme Court interpreted the phrase broadly, holding that unfair conditions, technical barriers, or lack of transparency constitute denial of access. In digital markets, denial rarely occurs through outright exclusion. Instead, network lock-in, multi-sided leveraging, and zero-price dynamics operate in tandem to foreclose rivals, creating barriers that are legally cognisable even when harm is latent or difficult to quantify.

The Meta/WhatsApp case illustrates structural dominance and its competitive and consumer harms in digital markets. By conditioning continued use of WhatsApp on consent to share user data with Meta for advertising purposes, WhatsApp effectively converted its messaging network into a proprietary input for Meta’s broader ecosystem. For competitors, this created high entry barriers: without access to an equivalent dataset, rivals could not compete meaningfully in adjacent advertising markets, limiting innovation and preventing new entrants from gaining traction. For users, the harm manifested in reduced autonomy, privacy lock-in, and constrained choices, as switching away from WhatsApp entailed losing access to both the messaging network and the integrated services built upon it. This harm was structural and latent: no immediate price increase or output reduction occurred, yet the network architecture and data integration generated exclusionary effects that traditional effects-based analysis would likely overlook. Therefore, the case underscores the need for forward-looking, probabilistic, and structural approaches to enforcement, allowing authorities to address harms that arise from the architecture of digital platforms rather than waiting for traditional price-based evidence to materialise.

Way forward: Alternative approach to  Digital markets

To address the limitations of an effects-based approach in digital markets, the CCI should use its rule-making powers under Sections 64(1) and 64(2)(h) to define structural thresholds such as minimum user bases, transaction volumes, data concentration, and multi-sided network interdependencies and identify digital practices, like self-preferencing, mandatory data-sharing, or tying free and paid services, that are rebuttably presumed likely to harm competition. This presumption-based framework should be complemented by a probabilistic or risk-based enforcement mechanism. As Robin C. Feldman and Mark Lemley argue in Atomistic Antitrust, conventional antitrust law lacks tools to address “probabilistic harm,” where actions may not guarantee immediate harm but create a high expected risk of anti-competitive effects. Requiring proof above arbitrary thresholds, such as a 50% likelihood of harm, allows many potential abuses to go unpunished. By incorporating probabilistic assessment, the CCI could intervene when structural indicators suggest a high probability of exclusionary outcomes, rather than waiting for demonstrable price or output effects to materialize.

The legal and operational efficacy of this approach is further supported by Elias Deutscher’s observation that codifying structural presumptions as “rule-like commands” provides predictable, presumption-based enforcement. Instead of relying solely on case-by-case economic proof, these presumptions clarify platform obligations, reduce regulatory ambiguity and provide forward-looking deterrence. Yannis Katsoulacos’ empirical research reinforces this point: strict effects-based standards with high evidentiary burdens frequently fail in judicial review whereas presumption-based or lower-burden frameworks significantly improve enforcement success, with upheld rates around 68.5% compared to 40% under strict effects-based approaches.

By combining structural thresholds, rebuttable presumptions, and probabilistic enforcement, CCI would gain a preemptive mechanism for addressing latent exclusionary conduct. Structural thresholds can capture features unique to digital markets, such as zero-price business models, data interdependencies and multi-sided network effects, ensuring enforcement reflects the intrinsic architecture of platforms rather than conventional price/output metrics alone. In a WhatsApp/Meta-type scenario, this framework could have targeted the integration of messaging data with advertising infrastructure, which entrenched network effects and created barriers to entry even though immediate market outcomes such as prices or outputs remained unaffected. Rooted in Section 4(2)(c), this approach enables CCI to act on structural and probabilistic signals, preserving competitive access, maintaining user autonomy and sustaining innovation incentives across adjacent markets. Moreover, by providing clear presumptions and thresholds, it offers platforms guidance on compliant behavior, encouraging proactive adherence while reducing legal uncertainty.

About the Authors

Vashmath Potluri and Shubhranshu are students at NALSAR University of Law