Published Online:January 2026
Product Name:The IUP Journal of Law Review
Product Type:Article
Product Code:IUPLR010126
DOI:10.71329/IUPLR/2026.16.1.5-26
Author Name:R M Radhika and Azimathul Marshiya M
Availability:YES
Subject/Domain:Law
Download Format:PDF
Pages:5-26
The rapid transformation of the digital economy has impacted business operations, competition and value creation for businesses in different jurisdictions. Businesses are utilizing the power of digital platforms to maximize their profits, and with the growing importance of data as an economic asset, traditional taxation and competition laws are quickly being rendered ineffective because of the nature of the digital economy. This paper examines the new digital economy environment through a multidimensional view and the interrelated nature of taxation, competition law and corporate conduct, with the goal of developing a more accessible and accountable framework to regulate companies operating in the digital economy. Based on India’s recent policies like the Equalization Levy, Significant Economic Presence (SEP) proposals, the Digital Personal Data Protection Act, 2023, and the draft competition bill, this paper proposes alignment with developments in the EU, the US, and the OECD frameworks such as pillar one and pillar two. It identifies the challenges caused by the digital business models such as profit shifting,value creation without physical presence, opaque algorithmic methods, network, effects, cross-market mergers and platform monopolies. The paper evaluates an India-centric collaborative model based on three pillars: identifying user and data-driven value for taxation; adopting ex-ante rules for core digital platforms; and enforcing digital ESG and algorithmic accountability. To integrate these elements, a statutory Digital Market Council is proposed to bridge the enforcement gaps among authorities. The aim is not to restrain innovation but to create a fair and transparent digital market environment that ensures revenue justice, protects consumers, improves corporate responsibility, and strengthens democratic and competitive digital systems.
The evolution of global digital economy has completely changed the way businesses work, how market competition takes place, and how governments control and influence the economy.