CCI chief bats for new analytical tools; says algorithmic collusion poses challenges

Delhi: To deal with competition challenges posed by digital markets, CCI Chairperson Ravneet Kaur on Monday, pitched for regulatory agility, new analytical tools and possibly, novel regulatory frameworks, specifically tailored to the digital context.

While emphasising the need for a nuanced approach blending traditional competition analysis with a deep understanding of digital market dynamics, she also said that issues like "algorithmic collusion" pose novel challenges for regulators.

The CCI will be conducting a market study on Artificial Intelligence (AI) that will be aimed at developing an in-depth understanding of the emerging competition dynamics in the development ecosystems of AI.

According to her, the transformative capabilities of AI have significant pro-competition potential. "At the same time there may be competition concerns emanating from the use of AI," she said and added that there is a growing emphasis on consumer welfare in the formulation and enforcement of competition law.

"Authorities are increasingly considering the broader impact of new age business practices on consumer choice, innovation, and overall market health beyond just price effects. This consumer-centric approach ensures that the benefits of competition extend directly to the public," she said while speaking at the 15th annual day of the Competition Commission of India (CCI) in the national capital.

Further, Kaur said there is a need for regulatory agility, the development of new analytical tools, and possibly, novel regulatory frameworks specifically tailored to the digital context.

While algorithms play a central role in digital markets, from shaping user experiences to making pricing and product placement decisions, she said that however, the opacity of these algorithms can make it challenging to assess their impact on competition.

"Issues like algorithmic collusion, where algorithms might implicitly coordinate prices or market strategies without explicit human direction, pose novel challenges for competition authorities," the CCI chief said.

Companies that can collect, analyse and leverage vast amounts of data can gain significant competitive advantages, the CCI chief pointed out.

"This raises concerns about data dominance, where control over large data sets can create insurmountable barriers to entry for newcomers and can potentially be used in ways that harm competition and consumer choice," she said, adding that many digital markets are characterised by platform business models, where a single entity controls access to a wide range of services and users.

Such concerns raise the issue of platform neutrality, particularly when platforms also compete with businesses that rely on their infrastructure. "There's a growing concern over platforms potentially favouring their own services or products over those of competitors, leading to unfair competition practices," Kaur said.

On the vision, Kaur said the regulator is focusing on emerging areas in the digital economy and the goal is to ensure that competition law enforcement evolves in tandem with these innovations, safeguarding the interests of consumers and ensuring fair play.