The biggest influence on what Indian consumers buy is no longer the price tag- it is the order in which options appear on a screen. What appears as choice is increasingly shaped by rankings, recommendations, and defaults embedded in digital interfaces. These systems have lowered costs and improved convenience, generating real consumer welfare gains. At the same time, they tend to concentrate control over visibility and access, quietly reshaping how competition operates. The core consumer welfare concern is no longer just price or deception, but whether choice remains meaningful over time. India’s regulatory response remains fragmented across competition, consumer protection, and data laws, limiting its ability to address these cumulative, non-price effects. As the digital economy continues to scale over billions, consumer welfare and choice will depend on institutional capacity and coordination.
The Consumer Dividend of Digital Platforms
Over the past decade, digital platforms have become central to everyday consumption in India. E-commerce, food delivery, travel booking, social media, and app-based payments now mediate a significant share of how consumers search, decide, and transact. According to the estimates by the Internet and Mobile Association of India and Kantar, in 2025, India has crossed 900 million internet users and has over 500 million social media users, making it one of the largest digital consumer markets globally. This scale is not merely quantitative. It represents a qualitative shift in how markets function, with platforms acting as the primary interface between consumers and economic opportunity.
Digital platforms generate measurable welfare gains.
One way to see this through is consumer surplus, which is the difference between what users are willing to pay for a service and what they actually pay. In practical policy terms, this surplus captures not only price savings but also time saved, convenience gained, and reduced effort in searching and transacting. Platform use creates an average surplus of ₹438.75 per person each month. When aggregated across users, this translates into a collective annual gain of roughly ₹3,620 billion for India, or around USD 47 billion. The same survey finds substantial time savings and perceived monetary benefits, particularly in transport and navigation, e-commerce, communication, and media and entertainment services. For many users, platforms are therefore no longer an optional convenience but the default mode of participating in markets.
From Consumer Choice to Market Power
At the same time, the global conversation around platforms has changed. What began as a story of innovation and an explosion of consumer choice, is now also a story about market power. As platforms have come to sit at the centre of digital markets, this scale has brought scrutiny. In Europe, this scrutiny has resulted in concrete enforcement. In an action for antitrust practices, the European Commission fined Google €2.4 billion for pushing its own shopping service ahead of competitors and later penalised it again for tying its apps to Android phones. Amazon has been investigated for using data from third-party sellers to compete against them on its own marketplace, while Apple has faced action over App store rules that restrict how developers can reach users. As the OECD has noted, when platforms control access to markets, they can shape outcomes in ways that weaken competition- often quietly, and at scale. These actions do not reflect hostility to technology in itself, but a recognition that platform scale and market power can generate harms that are not visible through prices alone.
India’s platform markets are exhibiting similar strains. As platform usage has deepened, a small number of firms increasingly shape how consumers discover products, compare options, and complete transactions, a concern noted by Shaktikanta Das in the recent assessments by the Bank for International Settlements. The Competition Commission of India, in its market study on e-commerce and subsequent investigations, has raised concerns about practices such as preferential treatment of certain sellers, exclusive arrangements, price parity clauses, and deep discounting funded through opaque commercial relationships. For consumers, the impact of these practices rarely appears as a higher bill at checkout. Instead, it manifests through subtler forms of steering.
What appears on a screen as a “top result”, a “recommended option”, or a “best deal” may reflect the platform’s internal commercial priorities rather than the objectively best choice available in the market, which has repeatedly been highlighted in the OECD’s work on digital market design. The welfare loss here is cumulative: reduced diversity of choice, weaker competitive pressure over time, and diminished consumer autonomy as defaults increasingly substitute for active comparison. Since these decisions are produced by algorithms rather than explicit contractual terms, consumers typically have no way of knowing how or why their choices are being shaped.
Photo by Dmitry Mashkin on Unsplash
Choice Architecture in Digital Platform Markets
Digital platforms influence consumer outcomes primarily through how information is organised and presented. Unlike traditional markets, where consumers encounter prices and products rather organically, platform markets operate through layers of ranking, filtering, and recommendation, a structure examined by the UK Competition & Markets Authority. These systems decide which options are shown first, which require scrolling or additional effort to find, and which are effectively invisible. For a lay user, this means that the market they see is already curated before any comparison begins.
These rankings are not neutral. They reflect the commercial incentives of multiple actors. Platforms have strong incentives to prioritise sellers and products that generate higher commissions, advertising revenue, or strategic advantage, including their own affiliated services. Sellers depend on visibility to compete, while consumers rely on rankings they cannot audit or verify. Regulators, meanwhile, operate with fragmented mandates. These relate to ex post assessment by competition authorities, investigating discrete unfair practices by consumer protection authorities, and addressing privacy concerns by data protection authorities. This fragmentation leaves gaps where no single institution fully addresses how platform design affects consumer welfare.
A Behavioural Study On Advertising And Marketing Practices In Online Social Media by the European Commission has noted that these rankings often combine relevance signals with factors such as advertising payments, commissions, platform ownership interests, and past user behaviour. When consumers rely on default rankings, as most do, the platform effectively narrows the field of options under consideration. Data plays a reinforcing role. Platforms collect detailed information on searches, clicks, purchases, location, and device use. This allows them to personalise results and offers in ways that smaller or newer competitors cannot easily replicate. For consumers, this can make it difficult to tell whether a price is genuinely competitive or whether an alternative option exists elsewhere.
Interface design, which is the UI/UX, further shapes behaviour. The OECD has noted that sponsored listings may look similar to organic results. Additionally, sorting options are often set to opaque criteria such as “relevance” without explanation. Information about why one option appears above another is rarely disclosed. Research in behavioural economics by the OECD and the European Commission shows that when searching or comparing options requires even modest additional effort, consumers are far more likely to rely on defaults. In practical terms, this means consumers are more likely to accept what is placed in front of them, even if better options exist.
Despite this, consumers often continue to feel better off. Discounts, cashbacks, and convenience generate real and immediate benefits. The challenge for policy is that harm in platform markets is rarely experienced as a single bad transaction. It accumulates over time as choice becomes narrower, alternatives harder to find, and dependence on a single interface deeper. Over the years, India has taken measures to address these asymmetrical dynamics.
Regulatory Coverage Without Convergence
As concerns around choice, visibility, and market power in platform markets have intensified, India has relied on a combination of existing legal frameworks to regulate platform conduct. These frameworks, however, were largely developed for a different market structure. As reported in PIB, consumer protection instruments, including the Consumer Protection Act, 2019, the Consumer Protection (E-commerce) Rules, 2020, and recent guidance on dark patterns, focus on specific acts of unfairness. More specifically, their focus is on inaccurate price disclosures, artificial urgency cues, and the withholding of material information relevant to consumer decisions. However, in practice, this enables regulatory action where fees are revealed only at checkout, urgency signals are not substantively justified, or key information on returns, refunds, and grievance redress is not clearly disclosed.
What these instruments are less equipped to address is the cumulative effect of everyday design choices. Individually lawful rankings, nudges, and defaults can, over time, systematically shape consumer behaviour and market outcomes without triggering traditional enforcement thresholds. Consumer law, which is oriented towards identifying discrete instances of deception or unfair practice, struggles to capture this broader pattern.
The principal data protection law, which is The Digital Personal Data Protection Act, 2023 addresses a different concern. Its primary objective is to safeguard individual privacy by regulating how personal data is collected, processed, and stored. This is essential in an era where platforms amass detailed behavioural profiles. However, data protection frameworks generally treat data as a rights issue rather than a source of market power. From a consumer perspective, this means the law focuses on whether consent was obtained or data was misused, not on how the accumulation of data gives platforms a structural advantage that shapes prices, rankings, and choice. As a result, the competitive implications of data concentration remain only partially addressed.
The net effect is a regulatory landscape in which different authorities see different slices of the problem. Consumer regulators look for deception, data regulators look for privacy violations, and competition authorities look for abuse of dominance. What is often missing is a unified assessment of how platform design, data, and incentives interact to affect consumer welfare at scale.
Structural Constraints and Why Regulation Struggles to Keep Pace
The difficulty of regulating platforms lies not in a lack of laws, but in the way platform markets function. Platform power is exercised through ongoing processes rather than discrete acts. Furthermore, market outcomes are shaped continuously by code that determines rankings, recommendations, and access. These outcomes include which sellers gain visibility, which products gain traction, and which consumers are shown particular offers, as noted by an ICRIER study. Since these decisions are embedded in software rather than written contracts, they are harder for consumers to observe, and harder for regulators to reconstruct after the fact.
This creates a timing problem. Platforms can adjust algorithms and interfaces in real time. Regulatory processes, by contrast, are deliberative and retrospective. By the time an authority investigates a practice, the specific configuration that caused harm may have evolved. At India’s scale, this mismatch is magnified. Small changes in design can influence the choices of millions of users within days.
These challenges are compounded by the global nature of platforms. Many of the firms that shape Indian consumer markets operate across jurisdictions. Core decisions about algorithm design, data use, and monetisation are often taken outside India. This limits the effectiveness of purely domestic interventions and increases reliance on coordination, standard-setting, and structural tools that do not depend on constant case-by-case enforcement.
Public Digital Infrastructure as a Market-Shaping Response
Against this backdrop, India’s use of public digital infrastructure represents a distinct regulatory strategy. Rather than focusing solely on restraining platform behaviour after harm occurs, initiatives such as the Unified Payments Interface (UPI) and the Open Network for Digital Commerce (ONDC) seek to reshape the conditions under which markets operate, as analysed in recent work published in Advances in Consumer Research in 2025.
The UPI separated payment infrastructure from proprietary apps and mandated interoperability. For consumers, this meant the ability to switch between apps without losing access to the underlying payment system. The effect was to reduce dependence on any single intermediary while preserving competition on user experience and services. Importantly, this outcome did not require constant monitoring of platform conduct. It flowed from the design of the system itself.
ONDC applies a similar logic to e-commerce by standardising discovery and transaction protocols. By unbundling buyer and seller interfaces and reducing data lock-in, it aims to make it easier for consumers to find alternatives and for sellers to reach customers without relying on a single dominant platform. Even if such networks do not immediately match private platforms in scale or convenience, their presence can alter incentives by lowering barriers to entry and reducing the cost of switching.
What this approach illustrates is that consumer welfare in platform markets can be influenced not only through enforcement, but through structural choices that make markets more open and intelligible by design.
However, these initiatives are not without limits. Network effects, user experience advantages, and brand trust may still keep consumers concentrated on large private platforms. Governance of public digital infrastructure thus, also raises questions about accountability, incentives and sustainability. Their value lies less in replacing platforms than in disciplining them by keeping alternatives viable.
Rethinking Consumer Welfare in Platform-Mediated Markets
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The central policy challenge is no longer whether platforms benefit consumers. The evidence suggests that they do, in significant and measurable ways. The challenge is how to preserve those benefits while addressing the less visible risks that arise when choice, visibility, and access are mediated by private digital systems at scale. This requires rethinking how consumer welfare and public interest are understood and operationalised in platform markets.
This tension is most visible where platform markets intersect with innovation-driven sectors such as digital technologies and standard-essential patents. Here, competition authorities must balance incentives for high-risk innovation against the danger of concentrated control over inputs that shape downstream prices and choice, as highlighted in academic work by Gouri and reflected in Competition Commission of India proceedings, including Micromax v. Ericsson.
These challenges also highlight the limitations of fragmented regulation. Consumer protection law addresses discrete acts of unfairness, while the data protection law focuses on individual rights, and lastly, competition law intervenes ex-post against anti-competitive practices. What remains underdeveloped is a systemic assessment of how platform design, data concentration, and contractual architecture interact to shape consumer outcomes over time. This gap is not unique to India. A policy commentary by Arora notes that it has prompted jurisdictions such as the European Union to adopt ex-ante frameworks like the Digital Markets Act, explicitly aimed at preserving contestability and consumer choice in platform markets.
Given the global footprint of major platforms, purely domestic responses are unlikely to be sufficient. Core decisions on algorithms, data governance, and monetisation are often made outside national jurisdictions. Effective protection of consumer welfare will therefore depend on greater cross-border coordination, shared standards on platform conduct, and participation in international policy forums addressing digital competition and data governance. For India, aligning domestic enforcement with emerging global norms, while retaining sensitivity to local market conditions will be critical.
In sum, consumer welfare in platform-mediated markets cannot be safeguarded through enforcement alone. It requires convergence between competition policy, public interest, and institutional capacity, supported by evidence-based analysis and international cooperation. As India’s digital economy continues to expand, the durability of consumer gains will depend on whether regulatory frameworks can adapt to markets where power is exercised through code, data, and design rather than price alone. As India’s digital consumer base continues to expand, the stakes of getting this balance right will only increase. Consumer welfare in the platform economy will depend not just on what platforms offer today, but on whether markets and policies remain understandable, contestable, and responsive to consumer interests in the years ahead.
If current trends continue, platform ecosystems may become more vertically integrated and harder to contest. Under stronger ex-ante rules and interoperable infrastructure, more open and plural market structures remain possible. Which path prevails will depend on regulatory coordination, institutional capacity, and policy choices made today.
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