Designed to Lag: How India’s Wearables Market Exposes Section 4’s Blind Spot
ARTICLESCOMPETITION LAW2026
Vitthala Agarwal, Third-Year, B.B.A. LL.B. (Hons.), National Law University, Jodhpur
9/13/20267 min read
Competition law has spent many decades learning how to recognise when a dominant firm has slammed the door in a competitor’s face. However, Indian competition jurisprudence has yet to develop a clear, settled framework to identify when a platform owner simply makes that door progressively heavier to push open. And that is the issue this essay is concerned with.
Walk into any Croma or Reliance Digital, and on display there are smartwatches and products from boAt, Noise, Fire-Boltt and Fastrack, brands which have carved out significant market share. In 2023, India shipped over 100 million wearables, making it the single largest market by unit sales. The brands have legitimately carved a niche for themselves through competitive products such as price, design, battery life, and health tracking features. What these brands are unable to legitimately carve is frictionless access to the ecosystem of smartphones that their customers already own. Control of that gateway rests with dominant firms, who are simultaneously building the platforms they are dependent on and providing their competing downstream products.
Indian competition law has a powerful tool in Section 4 of the Competition Act, 2002 (“the Act”). However, Section 4 enforcement has historically targeted explicit exclusion and binary access conditions. This essay looks at behaviour that isn't all-or-nothing and happens in stages. It can be easily denied, and works by controlling how people gain access rather than blocking them entirely. The law has no established framework for it. This essay argues for the urgent need for one and proposes a framework.
What “Friction-Based Exclusion” Actually Means
Two distinct forms of friction manifest within the wearables ecosystem, i.e. setup-phase onboarding friction during initial pairing, and runtime background synchronisation friction during continuous operation. While occurring at different stages of the user experience, both exhibit the same underlying structural asymmetry. When setting up a boAt or Noise smartwatch on Android, the user needs a few minutes of user intervention, scans for Bluetooth, pairs, and then installs the app, with numerous prompts and often timing out. A Pixel Watch can be set up with a single tap, utilising Google’s own fast pair system that is built into the operating system.
The same structure exists within the Apple ecosystem, but it is even more extreme. An Apple Watch can come within a couple of millimetres of an iPhone; we get a flickering watch face, the iPhone gives us one ‘Are you sure?’ dialogue, and seconds later the health data, notifications, payments, and unlock tokens flow securely and instantly, without any latency or data-syncing failure loop. A third-party Bluetooth-enabled watch, paired to the iPhone, must operate within the tightly restricted architectural constraints of iOS background processing and HealthKit protocols.
There is a fundamental gap in user experience here; it is not incremental, it is categorical. Third-party brands cannot fix this gap through engineering, because the constraint is not architectural; it is atomic.
For competition law, the central question is whether this asymmetry is intrinsic to the dominant’s product, or an artificial leverage derived from structurally dominating the platform such that no rival, no matter how effective, could counter it.
What Section 4 Currently Says and What It Misses
Section 4 of the Act deals with abuse of dominant position. For our purposes, the relevant limbs are Section 4(2)(c), i.e. denial of market access, and Section 4(2)(e), i.e. leveraging of dominance in the existing market to enter/ protect a new market. The Competition Commission of India (“CCI”) has been aggressive and strict in its application of the above provisions in the context of the Google Android case and the 2022 order imposing a penalty of ₹1,337 crore, which establishes the fact that the CCI is willing to take a serious approach towards platform leveraging.
In Google v. CCI, Google in fact didn’t refuse Play Store but made access to it conditional on the pre-installation of Search and Chrome, leveraging consumer familiarity with Chrome’s interface to steer users toward Google products by default. The CCI found this abuse under Section 4(2)(e) of the Act; rivals were disadvantaged within the market, not excluded from it. Abuse can arise from the conditions of access, not only its denial. However, such a condition identified was explicit and binary. Friction-based exclusion is graduated; access is formally conceded, but its quality is adjusted to preference the products of the dominant firm.
More significantly still, Indian competition law in its current formulation does not recognise a formal method to determine the degrees of access leading to abuse of dominant power in the downstream market. The CCI has no criteria for when a qualitative degradation of interoperability means it is no longer an advantage retention and competition on merits but rather an unlawful exclusion through excluding, obstructing and delaying competition. This is where the friction-based exclusion slips through.
Why The Investment-Incentive Defence Fails
The standard argument against forced interoperability is regarding a dominant firm’s incentive to innovate. By having invested heavily into building out their ecosystem of products, each of the major companies is in a position where doing so would remove future incentive for the company to develop and enhance its own ecosystem.
However, this argument relies on a presumption which is well worth testing, that interoperability problems indicate a limitation of technology, not a design choice.
Consider, for example, proximity pairing. The ability to pair effortlessly with the devices of other companies is clearly not at the forefront of engineering, and the technology is already in place. Already, Apple’s own “Find My” network supports third-party accessories from Belkin, Chipolo, and other brands. The architecture for discoverability from other devices has already been built, tested, and deployed. Google’s Fast Pair protocol, as specified in its published documentation, is open to all third-party manufacturers. This is not the issue at all. The issue is whether formal access translates into functional parity, which Google actions elsewhere suggest it doesn’t. Pixel 3 owners found wireless chargers from other companies locked at 5W (compared with the 10W provided by Google’s own Pixel Stand), which Google chalked up to a proprietary “secure handshake.” The only way to decide is whether those companies provide that access to rivals’ directly competing products at parity.
India has already conducted tests for comprehensive, enforced interoperability, and it clearly resolved the investment/incentive issue during the launch of Unified Payment Interface (“UPI”). The established banks in the 2016 debate strongly argued that opening their systems to competitors would jeopardise security, increase infrastructure costs, and reduce the returns on their investment in payment technology. The Reserve Bank of India and National Payments Corporation of India, however still enforced an interoperability condition. UPI transaction volume increased from 17.9 million in 2017 to 83,714.4 million in 2023. Those who competed on user experience invested and won. Those who competed on lock-in lost. Required payment interoperability redirected investment incentives toward competition on product quality rather than platform structure control, which is precisely what competition law is supposed to produce.
When interoperability is denied not because it is technically impossible but because it is inconvenient for the dominant company, i.e., because free third-party access would decrease user attachment to the dominant company’s downstream products, the investment-incentive defence is not protecting innovation. It is protecting lock-in. These are distinct concepts, and competition law needs to reflect that.
The DCB Mandates Equivalence Without Defining It
India’s proposed Digital Competition Bill (“DCB”) proposes ex ante interoperability requirements for “Systemically Significant Digital Enterprises” (“SSDE”) under Chapter III of the said bill. If enacted, it will obligate designated gatekeepers to provide third-party hardware and services with interoperability access equal to that received by their own downstream devices.
However, the DCB has two fundamental limitations that require close consideration. Firstly, before a formal designation such as requiring notification, evaluation and possible appeals of dominant firms as designated entities, Section 4 of the Act remains the primary ex-post competition law mechanism available. This situation may take years to resolve. Secondly, the DCB does not define what is ‘the same’ level of interoperability. How is a third-party wearable said to have ‘the same’ access as a first-party watch? On a protocol level? Latency level? Feature completeness level?
Without a technical definition of equivalence, the obligation may be technically met but not substantively met-the definition of a friction-based exclusion. If a boAt watch technically offers support for Fast Pair, but does not match the one-second pairing time by achieving a 10-second pairing time instead, or takes 30 seconds longer to sync health metrics in the background than a first-party watch, technically, the duty has been met but not really. Without a technical equivalent, the DCB is set to become a battleground for the very same asymmetries as before.
The Three Criteria that CCI Must Evaluate
Such exclusion should be assessed by the CCI against three conditions, first, structural control i.e. if asymmetry is related to the control over the structure of the platform rather than the actual technical superiority of the downstream product, second, non-replicability i.e. if another competitor, regardless of ability, could recreate the same access, or whether the gate itself (as with Google’s proprietary “secure handshake”) is structurally exclusive by design and third, consumer friction i.e. if the gap of access introduces sufficient usability friction to diminish product utility and distort consumer choices to the detriment of rival products.
If such an exclusion is found to exist, the defence to be relied by a dominant player should be similar to the one the Court of Justice of the European Union (“CJEU”) adopted in Alphabet (Android Auto), concerning a referral about Google’s exclusion of the JuicePass charging app from the Android Auto templates.
The CJEU stated that an undertaking with dominant position may refuse interoperability if doing so poses an actual threat to the integrity and security of the platform or if it is actually impossible to do so for technical reasons, rather than if it is simply technically challenging or costly. When it is possible to develop necessary integration, but requiring work, the appropriate solution, as the CJEU declared, is to ensure the terms are subject to a structured compensatory scheme which appropriately reflects the development cost and third party needs while not excluding the possibility of the dominant undertaking obtaining an appropriate return, rather than preventing access altogether.
The Line Runs Through Interoperability
India is the world’s biggest wearables market and Indian brands are enjoying significant brand loyalty among consumers. However, their competitive viability relies on whether the foreign platform owner, their partners, as well as their competitors, make interoperability decisions.
Within digital markets, interoperability is this line; India has the data, the need, and the doctrinal imperative to define it. The test has been put forward in this blog. Thus, the underlying principle is straightforward-competition law must differentiate the benefit secured through merit from those that are created through structural control. This essay has offered a test along these three criteria and a defence-and-remedy model adapted from the EU jurisprudence.