I. Introduction: Defining the Regulatory Confluence
1.1 The Transformative Potential of DLT and Web3 and the Genesis of Competition Risk[1]
Blockchain technology, often the foundational layer of Web3, represents a paradigm shift in digital interaction. Its core premise rests upon the ability of diverse and potentially adversarial parties to collectively agree upon and permanently record information without relying on a central, trusted third-party authority. This architectural innovation is fundamentally designed to maximize decentralization, fostering trust in data and revolutionary transaction mechanisms across sectors like energy, mobility, and finance.
However, the economic realities driving the proliferation of Digital Ledger Technology (DLT) paradoxically lead to the creation of centralized bottlenecks that generate acute competition risks. While the ideological foundation of blockchain is rooted in transparency and dispersion of power, the necessity for efficient consensus mechanisms, capital accumulation, and network effects often results in significant market concentration. This structural contradiction—where decentralized infrastructure is governed by economically centralized actors—creates risks analogous to traditional monopolies, particularly concerning infrastructure control and governance mechanisms. The challenge for competition regulators, especially in India, is ensuring that the promises of innovation are not undermined by the formation of private digital cartels or entrenched gatekeepers who control access to these new economic ecosystems.
1.2 Scope and Methodology of Competition Analysis (India and Comparative Law)
This report undertakes an exhaustive analysis of the application of existing competition frameworks to the novel challenges posed by blockchain and cryptocurrencies. The primary focus lies on the Indian Competition Act, 2002 (ICA), particularly concerning Sections 3 (Anti-Competitive Agreements) and Section 4 (Abuse of Dominance). A critical component of the analysis involves scrutinizing the systemic structural changes anticipated by the proposed Digital Competition Act (DCA), based on the recommendations of the Committee on Digital Competition Law (CDCL). The inadequacy of the existing ex-post framework necessitates a deep exploration of India’s potential move toward ex-ante structural regulation.
To inform the policy discourse of the Competition Commission of India (CCI), the paper incorporates a robust comparative study of international regulatory approaches. Jurisdictional models from the European Union (EU), which favors ex-ante intervention through instruments like the Digital Markets Act (DMA) and rigorous merger control , and the United States (US) and United Kingdom (UK), which prioritize ex-post litigation and detailed market investigations, provide crucial contexts for evaluating the efficacy of different regulatory tools.
1.3 Fundamental Tension: Decentralization Ideals vs. Centralized Enforcement[2]
Competition enforcement is widely considered a liberal endeavor, built on the principle of promoting a decentralized, free-market economy and intervening only where necessary to remedy distortions caused by market actors. This foundational ideal aligns philosophically with the core goal of blockchain technology.
However, the effective application of competition law requires a degree of centralized authority and state intervention. For the CCI to successfully regulate a global, often pseudonymous, decentralized system, it must first be able to identify, impose jurisdiction upon, and exact compliance from a responsible undertaking. This presents a critical paradox: the enforcement mechanism (centralized state power) directly conflicts with the foundational structure it seeks to protect (decentralization). If the CCI focuses solely on the decentralized components, enforcement will be futile due to jurisdictional hurdles and the lack of a legal entity to penalize. Consequently, the regulatory strategy must tactically focus on identifiable on-ramps, gatekeepers, and localized service providers—such as centralized crypto exchanges (CEXs) and legally registered entities that operate within India—effectively imposing regulatory centralization onto the entry points of the otherwise decentralized system.
II. Foundational Concepts: Market Definition and Dominance in the Crypto Economy
2.1 Defining the Relevant Market in Blockchain: Products, Geography, and Technology
The commencement of any competition inquiry by the CCI hinges on the rigorous definition of the Relevant Market, encompassing both the Relevant Product Market (RPM) and the Relevant Geographic Market (RGM). In the blockchain context, this foundational step is acutely challenging because DLT can be categorized in multiple ways: as a distinct technological market, as a new infrastructure utility, or merely as an alternative distribution channel for existing financial services.
The CCI itself has expressed divergent views regarding market delineation in the digital sphere. While it has sometimes differentiated online markets from offline ones, the Commission has also, in previous rulings such as Mohit Manglani and Ashish Ahuja, expressed the view that online and offline platforms are simply different channels of distribution rather than fundamentally separate markets. This internal ambiguity in existing Indian jurisprudence complicates the application of the hypothetical monopolist test (SSNIP) to crypto assets. Determining whether a centralized crypto exchange (CEX) is a reasonable substitute for a decentralized exchange (DEX), or whether a Layer 1 protocol genuinely competes with traditional centralized database services, requires the CCI to resolve its inconsistencies regarding the substitutability of digital and traditional, or centralized and decentralized, services.
2.2 The Layered Architecture Challenge (L1 vs. L2 Protocols) and Vertical Competition[3]
Blockchain architectures are inherently layered, which introduces complex vertical competition dynamics. Layer 1 (L1) protocols, such as Bitcoin or Ethereum, provide the common, immutable base layer, serving as the ultimate settlement anchor for cryptographic proofs of transactions. Layer 2 (L2) ledgers, built upon the L1, operate autonomously to offer specialized functions like enhanced scalability, programmability, and composability.
This architectural design implies that dominance must be analyzed vertically. If a specific L1 protocol achieves a predominant position—driven by overwhelming network effects, developer adoption, and composability—it effectively becomes an Essential Facility in the digital economy. This dominant L1 entity controls the operational freedom and entry conditions for all dependent downstream L2 applications. Such structural leverage raises significant concerns under Section 4 analogs, specifically concerning potential abuses like discriminatory access, refusal to deal, or predatory pricing tactics related to gas fees. A dominant L1 platform possesses the power to extract excessive economic rents from otherwise competitive L2 solutions, thereby chilling innovation across the entire ecosystem. Recognizing and regulating the L1 as critical infrastructure is therefore necessary to maintain open competition in the subsequent application layers.
2.3 Identifying Dominance in the Crypto Ecosystem (Exchanges, Stablecoin Issuers, Mining Pools)[4]
Applying traditional measures of market power, such as turnover or market capitalization, often fails to accurately capture the true economic and infrastructural leverage held by crypto entities. The CCI must adapt its toolkit to assess alternative metrics for dominance, including Total Value Locked (TVL) in DeFi protocols, the cost required to secure the network, user switching costs between protocols, and, most critically, control over crucial fiat on/off-ramps.
The principles defined by the CDCL for identifying Systemically Significant Digital Enterprises (SSDEs) are particularly relevant here. The Committee noted that large digital enterprises quickly gain influence due to features like the massive collection of user data, powerful network effects, and economies of scale. These criteria map perfectly onto major centralized crypto exchanges, dominant wallet providers, and large stablecoin issuers. The risk in these markets is the “irreversible tipping” towards permanent dominance. Given the speed at which dominance can solidify—whether through a stablecoin becoming the primary unit of account or an L1 securing a disproportionate share of developer talent—relying solely on slow ex-post litigation risks rendering any eventual remedy ineffective. The structural nature of this market tipping mandates a swift, preventative ex-ante intervention mechanism.
III. The Indian Regulatory Landscape: Ex-Ante Intervention and the CCI[5]
3.1 Current Framework: Limitations of the Competition Act, 2002 (Sections 3 and 4)
The Indian Competition Act, 2002 (ICA), operates primarily as an ex-post enforcement mechanism. It is structured to intervene only after alleged anti-competitive conduct—such as agreements (Section 3) or abuse of dominance (Section 4)—has occurred and caused demonstrable harm.
This time-intensive intervention model is profoundly unsuited for the volatile, high-speed nature of digital and crypto markets. The Committee on Digital Competition Law (CDCL) explicitly highlighted this limitation, noting that the current ex-post framework does not permit timely redressal of anti-competitive conduct and is often ineffective in addressing the permanent tipping of markets in favor of large digital enterprises. In nascent digital asset markets, where volatility is high and technological shifts are rapid, relying solely on the ICA 2002 means that structural monopolies could become functionally unassailable before the CCI can conclude its complex investigations, rendering corrective action largely symbolic. This observation underlines the critical necessity for a modernized, forward-looking regulatory approach in India.
3.2 The Committee on Digital Competition Law (CDCL) Report and the Push for Ex-Ante Regulation[6]
The release of the CDCL Report in March 2024 marks a pivotal shift in India’s regulatory philosophy, advocating for the enactment of the Digital Competition Act (DCA). The purpose of the DCA is to empower the CCI to selectively regulate large digital enterprises in a preventative, ex-ante manner.
This proposed legislation seeks to regulate entities that have a “significant presence and the ability to influence the Indian digital market”. The core mechanism involves designating certain entities as Systemically Significant Digital Enterprises (SSDEs), particularly those offering “core digital services” that are highly susceptible to market concentration, such as search engines, operating systems, and web browsers.
The conceptual foundation of the SSDE designation is immediately and directly applicable to the centralized crypto ecosystem. Large CEXs, which act as the primary gateways between fiat currency and digital assets, exert gatekeeping power by controlling listings, liquidity, and consumer access. These CEXs exhibit all the characteristics identified for SSDE classification: they leverage powerful network effects, benefit from enormous economies of scale, and accumulate vast amounts of user data. Designating such a dominant CEX as an SSDE would compel it to adhere to structural mandates, such as ensuring non-discriminatory access for competing assets, guaranteeing interoperability with external wallets, and establishing fair terms for customer data access. This proactive approach structurally mitigates potential Section 4 abuses before they can materialize into irreversible market harm.
3.3 Abusive Conducts Relevant to Digital Assets and Merger Control[7]
Under the existing Section 4 framework, several forms of anti-competitive conduct are highly relevant to dominant crypto entities. These include exclusionary practices such as mandatory tying, where a dominant CEX requires users to hold a specific utility token issued by the exchange to receive reduced trading fees or access premium features. Dominant protocols could also engage in predatory practices or discriminatory refusal to deal, such as refusing to list competing stablecoins or protocols on their platforms, thereby fragmenting liquidity and hindering rival growth.
Furthermore, competition concerns are amplified in the realm of merger control. Large mergers and acquisitions (M&A) in the crypto sphere—for instance, the acquisition of a key L2 scalability solution by a dominant L1 protocol, or the vertical integration achieved when a major CEX acquires a successful decentralized wallet provider—must be rigorously scrutinized. If such transactions are likely to significantly reduce competition in the Relevant Market, the CCI must intervene. Given that many high-value digital acquisitions may involve targets with low traditional turnover, the CCI, mirroring EU practice, must revise its jurisdictional trigger thresholds to capture these transactions based on transaction value, user count, or the strategic importance of the acquired technology, rather than relying solely on the outdated turnover criteria.
IV. Decentralized Autonomous Organizations (DAOs): Antitrust Liability and Governance
4.1 Legal Nature of DAOs: The Challenge to the ‘Undertaking’ Concept
Decentralized Autonomous Organizations (DAOs) represent one of the most significant jurisdictional and conceptual hurdles for competition law. DAOs are defined as entities managed and administered primarily through smart contracts, offering an operational and autonomous model that fundamentally challenges pre-established corporate structures. Crucially, DAOs are typically not formed as traditional corporations or Limited Liability Companies (LLCs), which means their members usually lack the corporate shield, exposing them to unlimited personal liability.
The application of the ICA 2002 hinges on identifying a liable “undertaking.” If a DAO cannot be recognized as a single, cohesive legal entity, the CCI is conceptually obligated to treat the individual DAO members or voters—especially those who are institutional or large financial participants—as separate, competing economic entities. This interpretation drastically elevates the risk that their collaborative governance decisions could be viewed as anti-competitive agreements or concerted practices falling under Section 3 (Cartel) liability.
4.2 Collective Action and Collusion Risks within DAOs (Section 3 Analysis)[8]
The decentralized, public governance structure of DAOs generates novel risks of collusion. Antitrust uncertainty arises precisely because individual members, who may otherwise be direct competitors in the market (e.g., large institutional lenders competing for DeFi market share), collaborate and share competitive information through the DAO’s governance and public voting mechanisms.
This creates the “transparency trap”: unlike traditional, covert cartels, DAO governance proposals and corresponding votes are often publicly recorded on the blockchain. However, if competitors use this transparent voting system to collectively agree on market parameters, such as setting standardized lending rates or defining key platform fees within a dominant DeFi protocol, this action may fulfill the legal requirements for a concerted practice under Section 3. The primary enforcement challenge for the CCI lies in proving the requisite intent to collude among geographically dispersed, often pseudonymous participants. If a DAO controls a substantial segment of the market and its governing members are influential competitors outside the DAO, any price-setting or market-allocation mechanism achieved through governance voting risks exposing those members to criminal antitrust scrutiny in jurisdictions that recognize such liability.
4.3 Structuring DAOs for Competition Compliance and Liability Mitigation
To navigate the extreme antitrust risks and the potential for unlimited liability, the structural design of a DAO is paramount. Experience in the US has demonstrated that legal structuring is a primary mitigation strategy: jurisdictions like Wyoming and Vermont allow DAOs to be recognized as legal entities, such as Blockchain Based LLCs. Structuring the DAO as a recognized legal entity affords limited liability to members, providing the necessary corporate shield. Crucially, this formalization also significantly increases the likelihood that the entity will be treated as a single “undertaking” under antitrust law, effectively minimizing the risk of collective cartel liability for the individual members.
Founders and legal counsel must proactively audit the DAO’s design, ensuring that the governance mechanisms do not inherently restrain competition or enable collusive activities. Effective risk mitigation involves establishing and enforcing a clear antitrust policy within the DAO, including mechanisms embedded within the smart contracts to address and remediate violations. Ensuring early compliance with competition, securities, and anti-money laundering regulations may even prove to be a competitive advantage, as non-compliant projects risk being permanently removed from the market.
V. Specific Competition Concerns in the Blockchain Infrastructure[9]
5.1 Concentrated Market Power in Mining and Validator Pools
The decentralized ethos of blockchain is directly undermined by the economic reality of mining and staking concentration. Large centralized entities, known as “mining pools” or “validator pools” in Proof-of-Stake systems, aggregate computing power or staked capital to efficiently generate rewards. The existence of highly concentrated mining pools raises fundamental questions about market power and the potential for monopolistic control over the underlying network infrastructure.
These pools function effectively as horizontal consortia. If large pools collectively controlling 51% or more of the network’s processing power collude, they gain the capacity to engage in highly anti-competitive activities. These activities include censoring specific transactions, prioritizing their own transactions or those of favored parties, or executing financially devastating double-spend attacks. The validation network—whether based on mining or staking—is the essential, non-substitutable infrastructure required to secure the public ledger. Control over this essential infrastructure constitutes a potent form of dominance analogous to the Essential Facility Doctrine under Section 4 of the ICA 2002. Permitting this degree of private concentration, without regulatory oversight into pool composition and governance, allows for private control over what is intended to be public, critical infrastructure.
5.2 Interoperability and Lock-in Effects: Cross-Chain Communication[10]
The long-term success of Web3 depends critically on robust interoperability, ensuring that blockchains can communicate seamlessly with each other and with existing centralized systems. Competition law has a direct role in preventing market fragmentation caused by technological barriers.
A key competition concern arises when dominant Layer 1 protocols or centralized “bridge” operators intentionally engineer or maintain technological lock-in barriers. These barriers make it technically difficult, prohibitively expensive, or risky for users and developers to move assets or applications to competing chains. This refusal to ensure adequate interoperability can be interpreted as an exclusionary practice aimed at maintaining market share. This concern aligns closely with the objectives of the proposed DCA regarding data portability, non-discrimination, and preventing anti-competitive tying. The CCI should leverage the proposed DCA framework to mandate open standards for cross-chain communication where gatekeeping power is demonstrated, thereby enforcing a competitive, modular ecosystem.
5.3 Competition Issues Related to Stablecoins and Digital Currency Dominance
The market dominance of a single stablecoin—especially one centrally issued and pegged to a fiat currency like the US Dollar—introduces significant systemic and competitive risks. If a large, centralized entity controls the issuance, redemption, and reserve management of the primary medium of exchange within the broader DeFi ecosystem, that entity gains disproportionate leverage over all dependent protocols, exchanges, and financial applications.
This power enables strategies involving vertical foreclosure. For instance, a dominant CEX (potentially designated as an SSDE) could leverage its position to mandate the exclusive use of its proprietary stablecoin for margin trading, collateralization, or liquidity provision on its platform. This practice would effectively shut out rival digital currencies, fragment competing liquidity pools, and represent an anti-competitive leveraging of market power from the exchange service market into the stablecoin issuance market. Competition policy must ensure that stablecoin issuance remains a contestable market, preventing a single entity from monopolizing the transactional backbone of the digital economy.
VI. Comparative Analysis of International Regulatory Responses[11]
The challenges posed by blockchain and cryptocurrencies are global, compelling international regulators to adopt diverse and unique approaches to enforcement. A comparative review offers valuable policy lessons for the CCI.
6.1 European Union (EU) Approach: Structural Regulation and Web3 Strategy
The EU has adopted a proactive and comprehensive strategy aimed at making the bloc a global leader in blockchain and Web3 technology, while rigorously adhering to European values and regulations concerning data protection and sustainability.
The EU’s primary tool for addressing digital market concentration is its commitment to structural intervention. The EU Merger Regulation strictly prohibits mergers and acquisitions that significantly impede effective competition within the Single Market, particularly those that create or strengthen dominant companies. This rigorous ex-ante structural control is key to preventing concentration in critical digital infrastructure. Furthermore, the EU supports interoperability and is building its own pan-European infrastructure (EBSI). This structural approach—mandating compliance and interoperability while preventing structural concentration—strongly aligns with the Indian CDCL/DCA proposal. This suggests India is adopting a continental European model of preventative structural regulation rather than the primarily reactive enforcement model of the US.
6.2 United States (US) Approach: Enforcement Posture and Deregulation Advocacy
The US approach is characterized by a strong emphasis on ex-post enforcement using established antitrust statutes (Sherman and Clayton Acts). Enforcement agencies like the Department of Justice (DOJ) and the Federal Trade Commission (FTC) utilize traditional tools, such as the FTC’s ability to seek a preliminary injunction to block proposed mergers pending a full administrative examination.
Simultaneously, the US has focused resources through task forces aimed at advocating for the elimination of state and federal regulations that are deemed anticompetitive and that undermine free market dynamism. This emphasis on deregulation stands in stark contrast to the Indian and EU approach of introducing new, ex-ante structural regulation (DCA/DMA). The US model prioritizes robust, fact-based litigation against established monopolists, both public and private. However, this primarily ex-post litigation model has proven less effective in rapidly evolving digital markets, often struggling to keep pace with the swift and irreversible market tipping observed in technology sectors, lending credibility to the CDCL’s findings regarding the necessity of the DCA in India.
6.3 United Kingdom (UK) CMA: Digital Market Investigations as Precedent[12]
The UK’s Competition and Markets Authority (CMA) has demonstrated a sophisticated methodology for investigating complex digital ecosystems. The CMA has pursued extensive investigations into sectors such as the supply of public cloud infrastructure services and Google’s potential abuse of dominance in the ad tech stack.
These ongoing investigations provide crucial methodological precedents for the CCI. The CMA’s technique of dissecting the layered digital supply chain (e.g., ad tech stack) is directly applicable to analyzing the crypto ecosystem, enabling regulators to identify precisely where dominance lies—whether at the protocol layer, the exchange layer, the wallet layer, or the application layer. This operational blueprint can guide the CCI in launching its own market studies under Section 42 of the ICA, facilitating a nuanced identification of gatekeepers and potential abuse.
VII. Enforcement and Jurisdictional Challenges in a Globalized Ledger
7.1 The Territoriality Principle vs. Borderless Transactions
The decentralized and global nature of blockchain technology severely complicates the application of traditional jurisdictional principles. Concepts such as lex situs (the law of the location of the asset) are practically impossible to apply to decentralized digital assets that exist simultaneously across multiple server locations.
The CCI’s authority rests on the “Effects Doctrine,” which allows it to assert jurisdiction over anti-competitive conduct occurring outside India, provided that conduct results in an appreciable adverse effect on competition within the country. While this doctrine offers a broad legal reach, proving the causal link and calculating the appreciable adverse effect against a truly global, pseudonymous DAO is an immense evidentiary and legal hurdle. Therefore, effective competition enforcement in the crypto space must move beyond traditional territoriality towards strategically controlling chokepoints. This requires regulators to target identifiable, geographically bound intermediaries: KYC-compliant centralized exchanges, legally registered entities formed by protocol founders, or centralized service providers (such as localized websites or API gateways).
7.2 Regulatory Capture and the Conflict of Decentralization vs. State Intervention[13]
Competition policy seeks to promote decentralization , yet the state mechanisms required to enforce this policy are inherently susceptible to regulatory capture. As observed globally, large incumbent businesses often lobby against or seek to shape pro-competitive regulations to their advantage.
A significant concern arises if the CCI mandates that DAOs adopt centralized legal forms (such as LLCs) primarily for the purpose of liability mitigation and ease of compliance. While this solves the immediate jurisdictional problem, it risks institutionalizing the very centralized governance structures that competition law is meant to counteract. These newly formalized, centralized entities could then become powerful lobbying forces, leading to the regulatory framework being captured by the incumbent crypto gatekeepers. The policy goal must be to ensure compliance without unduly sacrificing the core economic benefits of decentralized governance.
7.3 Remedial Mechanisms and Practicality of Cross-Border Enforcement
The remedial toolkit of the CCI—which includes imposing monetary penalties and mandating structural separation or divestiture—is difficult, if not impossible, to apply directly to code-based systems. Traditional monetary fines are ineffective if the penalized entity is non-existent, pseudonymous, or geographically untouchable.
The most practical and effective remedies against decentralized protocols involve structural and intermediary-focused mandates. This includes ordering centralized parties (like CEXs designated as SSDEs) to refuse support (e.g., delist tokens or cease processing transactions) for non-compliant protocols. Additionally, the CCI may have to mandate specific code changes, such as requiring interoperability standards to be written into the smart contracts of dominant L1 protocols. The practicality of enforcing such structural and conduct remedies often depends heavily on global regulatory cooperation, particularly in utilizing cross-border mechanisms like freezing orders that target assets held by centralized custodians or identifiable account holders.
VIII. Conclusion and Policy Recommendations[14]
8.1 Recommendations for the Competition Commission of India (CCI)
Based on the analysis of domestic constraints and international regulatory precedents, the following policy recommendations are crucial for enabling the CCI to effectively govern competition in the Indian crypto ecosystem:
Recommendation A: Rapid Adoption and Tailoring of the DCA to DLT
The CCI must advocate for the rapid enactment of the Digital Competition Act. Crucially, the legislation’s framework must be explicitly tailored to address DLT ecosystems. The criteria for defining “Core Digital Services” and conferring SSDE status must be expanded to explicitly include entities that control critical fiat/crypto on-ramps, such as large centralized crypto exchanges, and key protocol developers whose control exhibits decisive gatekeeping power. This ex-ante intervention will enable the CCI to impose preventative, structural obligations before market tipping becomes irreversible.
Recommendation B: Development of Protocol Economics Expertise
To accurately define relevant markets and measure dominance, the CCI must establish a dedicated unit focused on DLT and protocol economics. This specialized unit must develop comprehensive guidelines for market definition based on blockchain layers (L1 vs. L2 analysis). Furthermore, the assessment of dominance must utilize crypto-native metrics, including Total Value Locked (TVL), the effective cost of network participation, network security contribution, and consensus mechanism voting power, rather than relying solely on traditional turnover metrics.
Recommendation C: Guidelines for DAO Antitrust Compliance
To minimize the high risk of cartel liability under Section 3 for individual members, the CCI should proactively issue detailed guidance encouraging DAOs that interface with Indian markets to adopt recognized legal structures (e.g., an equivalent of an LLC). This measure would protect individual participants with limited liability and increase the likelihood that the structure is treated as a single “undertaking” under the ICA 2002. Such policy certainty would simultaneously protect innovators from debilitating personal liability and ensure a clear channel for regulatory engagement and enforcement.
Recommendation D: Proactive Merger Scrutiny
The CCI must urgently revise the merger control thresholds (Sections 5 and 6 of the ICA 2002) to effectively capture digital acquisitions. Acquisitions in the DLT space should trigger mandatory notification based on transaction value, the size of the acquired user base, or the strategic nature of the technology being acquired, irrespective of low traditional turnover figures. Adopting a transaction-value threshold, mirroring methods utilized in the EU, is essential to prevent anti-competitive structural changes through stealth acquisitions of nascent, high-potential competitors.
8.3 Recommendations for International Harmonization and Regulatory Cooperation[15]
Given the borderless nature of DLT, national enforcement efforts will be fundamentally constrained without international coordination. India must actively engage in global forums—such as the OECD, G20, and the International Competition Network (ICN)—to harmonize standards for defining antitrust liability in decentralized entities like DAOs and to formalize cooperation frameworks for cross-border enforcement. Consensus is required on applying remedies, particularly the mutual recognition and enforcement of injunctions and freezing orders targeting digital assets held by centralized custodians. India should also advocate for international consensus on mandatory, non-proprietary interoperability standards to structurally prevent the formation of exclusionary Web3 silos.
8.2Conclusion
Competition law faces a complex dual mandate in the context of blockchain and cryptocurrencies. On one hand, it must apply traditional tests for dominance to economically centralized gatekeepers—namely, the large centralized exchanges and key mining/validator consortia. On the other, it must find a mechanism to apply liability and deterrence against legally ambiguous, technically decentralized entities like DAOs. The current Indian ex-post framework under the Competition Act, 2002, is demonstrably inadequate for addressing the speed, volatility, and structural complexity of both challenges. The inherent tension between the decentralized ideals of the technology and the necessary centralization of state enforcement means that a new, hybrid approach is essential for safeguarding competition and innovation in India.
Refrences:-
- NLS Forum Blog Post:
National Law School of India University, The Curious Case of Blockchain and Competition Law: Exploring the Unprecedented Pathway, IJLT Blog (Oct. 10, 2025), https://forum.nls.ac.in/ijlt-blog-post/the-curious-case-of-blockchain-and-competition-law-exploring-the-unprecedented-pathway.
- Oxford Antitrust Journal Article:
Ryan Stones, Why Should Competition Lawyers Care About the Formal Rule of Law?, 84 Mod. L. Rev. 608 (2021), https://doi.org/10.1111/1468-2230.12625.
- FTC Guide on Antitrust Laws:
Fed. Trade Comm’n, The Enforcers, https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/enforcers.
- EU Merger Control Procedures:
European Comm’n, Merger Control Procedures, https://competition-policy.ec.europa.eu/system/files/2021-02/merger_control_procedures_en.pdf.
- Stanford Law Working Paper:
Mak, TTLF-WP-113, https://law.stanford.edu/wp-content/uploads/2024/04/TTLF-WP-113-Mak.pdf.
- Winston & Strawn Article on DAOs:
Susannah Torpey, Mitigating Antitrust Risk in Decentralized Autonomous Organizations, Winston & Strawn (Apr. 12, 2022), https://www.winston.com/en/insights-news/mitigating-antitrust-risk-in-decentralized-autonomous-orgs.
- EU Mergers Policy Overview:
European Comm’n, Mergers, https://competition-policy.ec.europa.eu/mergers_en.
- EU Blockchain Strategy:
European Comm’n, Blockchain and Web3 Strategy, https://digital-strategy.ec.europa.eu/en/policies/blockchain-strategy.
- Wolters Kluwer Blog on Blockchain and Competition Law:
Navigating the Multi-Jurisdiction Landscape of Blockchain and Competition Law, Wolters Kluwer Legal Blogs, https://legalblogs.wolterskluwer.com/competition-blog/navigating-the-multi-jurisdiction-landscape-of-blockchain-and-competition-law.
[1]National Law School of India University, The Curious Case of Blockchain and Competition Law: Exploring the Unprecedented Pathway, IJLT Blog (Oct. 10, 2025), https://forum.nls.ac.in/ijlt-blog-post/the-curious-case-of-blockchain-and-competition-law-exploring-the-unprecedented-pathway.
[2]Ryan Stones, Why Should Competition Lawyers Care About the Formal Rule of Law?, 84 Mod. L. Rev. 608 (2021), https://doi.org/10.1111/1468-2230.12625
[3]Ryan Stones, Why Should Competition Lawyers Care About the Formal Rule of Law?, 84 Mod. L. Rev. 608 (2021), https://doi.org/10.1111/1468-2230.12625
[4]Ryan Stones, Why Should Competition Lawyers Care About the Formal Rule of Law?, 84 Mod. L. Rev. 608 (2021), https://doi.org/10.1111/1468-2230.12625
[5]European Comm’n, Merger Control Procedures, https://competition-policy.ec.europa.eu/system/files/2021-02/merger_control_procedures_en.pdf.
[6]National Law School of India University, The Curious Case of Blockchain and Competition Law: Exploring the Unprecedented Pathway, IJLT Blog (Oct. 10, 2025), https://forum.nls.ac.in/ijlt-blog-post/the-curious-case-of-blockchain-and-competition-law-exploring-the-unprecedented-pathway
[7]European Comm’n, Mergers, https://competition-policy.ec.europa.eu/mergers_en.
[8]European Comm’n, Mergers, https://competition-policy.ec.europa.eu/mergers_en.
[9]Susannah Torpey, Mitigating Antitrust Risk in Decentralized Autonomous Organizations, Winston & Strawn (Apr. 12, 2022), https://www.winston.com/en/insights-news/mitigating-antitrust-risk-in-decentralized-autonomous-orgs
[10]Susannah Torpey, Mitigating Antitrust Risk in Decentralized Autonomous Organizations, Winston & Strawn (Apr. 12, 2022), https://www.winston.com/en/insights-news/mitigating-antitrust-risk-in-decentralized-autonomous-orgs
[11]Navigating the Multi-Jurisdiction Landscape of Blockchain and Competition Law, Wolters Kluwer Legal Blogs, https://legalblogs.wolterskluwer.com/competition-blog/navigating-the-multi-jurisdiction-landscape-of-blockchain-and-competition-law.
[12]Navigating the Multi-Jurisdiction Landscape of Blockchain and Competition Law, Wolters Kluwer Legal Blogs, https://legalblogs.wolterskluwer.com/competition-blog/navigating-the-multi-jurisdiction-landscape-of-blockchain-and-competition-law.
[13]Susannah Torpey, Mitigating Antitrust Risk in Decentralized Autonomous Organizations, Winston & Strawn (Apr. 12, 2022), https://www.winston.com/en/insights-news/mitigating-antitrust-risk-in-decentralized-autonomous-orgs.
[14]Susannah Torpey, Mitigating Antitrust Risk in Decentralized Autonomous Organizations, Winston & Strawn (Apr. 12, 2022), https://www.winston.com/en/insights-news/mitigating-antitrust-risk-in-decentralized-autonomous-orgs.
[15]Ryan Stones, Why Should Competition Lawyers Care About the Formal Rule of Law?, 84 Mod. L. Rev. 608 (2021), https://doi.org/10.1111/1468-2230.12625.
