CCI flags AI competition risks, urges self-audits and stronger oversight

New Delhi: The Competition Commission of India (CCI) has released a market study on artificial intelligence (AI) and competition, highlighting potential risks of AI-driven business practices and suggesting steps for enterprises and regulators to address them.

The report, titled Market Study on Artificial Intelligence and Competition, recommends that companies conduct self-audits of their AI systems to proactively identify and manage potential competition concerns. It also advises the CCI to enhance its technical expertise and infrastructure, engage with international competition authorities, and strengthen inter-regulatory coordination.

The study comes amid growing concerns over algorithmic collusion, AI-driven pricing strategies, and price discrimination. It notes that AI can have both pro-competitive and anti-competitive effects, including risks of ecosystem lock-in, exclusive partnerships, concentration in the AI value chain, and the opaque nature of algorithms.

“Lack of transparency with respect to the deployment of AI in decision-making can harm competition and consumers. Enterprises are thus encouraged to adopt transparency measures to reduce information asymmetry,” the study states. 

It also highlighted survey findings indicating that 37% of AI startups perceived a possibility of AI-facilitated collusion, 32% saw risks of price discrimination, and 22% noted potential for predatory pricing.

The study further proposes the creation of a think tank to draw on expertise in digital markets with a focus on AI, along with workshops and conferences on AI and competition compliance to raise awareness among stakeholders.

Global regulatory approaches are increasingly emphasising AI governance, algorithmic transparency, and accountability measures. The CCI study notes that competition law, being sector- and technology-agnostic, remains a key tool for addressing AI-driven anti-competitive practices.

The research was conducted by the Management Development Institute Society (MDIS), Gurugram, using primary and secondary research, along with semi-structured interviews with AI startups, technology firms, user sectors, AI development platforms, investors, domain experts, and industry associations.

The report also projects rapid growth in AI markets, with the global market expected to expand from USD 244.22 billion in 2025 to USD 1 trillion in 2031, while India’s AI market is forecast to grow from USD 7.84 billion to USD 31.94 billion over the same period.