Artificial intelligence (AI) is revolutionizing modern markets, but it also brings new challenges for regulators.
The Competition Commission of India (CCI) has highlighted concerns about AI potentially enabling collusion and algorithmic discrimination under the guise of dynamic pricing. Speaking at the 10th National Conference on Economics of Competition Law, CCI Chairperson Ravneet Kaur stressed the need for a forward-looking and trust-based regulatory approach, Business Standard reported.
AI-Enabled Collusion and the Need for Proactive Regulation
Speaking at the 10th National Conference on Economics of Competition Law in New Delhi, Kaur underscored how AI can facilitate new forms of collusion, including cartels without direct human communication, implicit price coordination, and algorithmic discrimination disguised as dynamic pricing. She highlighted that traditional adversarial enforcement models may no longer be sufficient to tackle these evolving market complexities. Instead, a collaborative and adaptive regulatory strategy is required to balance innovation with fair competition.
Kaur further noted that market power in today’s digital economy is increasingly defined by control over data, network effects, and platform reach. She reaffirmed CCI’s commitment to ensuring fair and open markets while acknowledging the need for regulatory frameworks that evolve in tandem with technological advancements. To this end, the fair trade regulator is currently conducting a study on AI and its implications for competition.
India’s Digital Competition Law in the Making
Union Minister of State for Corporate Affairs, Harsh Malhotra, also addressed the conference, emphasizing the need for real-time market monitoring to ensure fair competition. He acknowledged that India is carefully studying digital market regulations in jurisdictions such as Japan, Australia, and Europe to develop a framework suited to its unique market dynamics, reported Economic Times.
Malhotra confirmed that the draft Digital Competition Bill (DCB) is under review, with more than 100 suggestions received during the public consultation phase. He reassured stakeholders that the government is not rushing the legislation and will follow due process, including awaiting input from the Ministry of Electronics and Information Technology (MEITY).
The proposed DCB includes ex-ante provisions aimed at proactively monitoring the conduct of large digital enterprises and curbing potential anti-competitive practices. This marks a departure from the current ‘ex-post’ enforcement model under the Competition Act, wherein CCI intervenes only after anti-competitive behavior has occurred.
Looking Ahead
With AI-driven decision-making and digital markets playing an increasingly central role in the global economy, Indian regulators recognize the need for a balanced and forward-looking approach. As CCI continues to refine its enforcement strategies and India moves toward a digital competition law, the focus remains on fostering innovation while safeguarding market fairness and consumer interests.
The evolving landscape of competition law enforcement in India underscores the importance of dynamic regulatory frameworks that can effectively address the complexities of AI-powered market behavior.
