The Competition Commission of India (CCI) has introduced new regulations aimed at better evaluating predatory pricing and deep discounting activities, particularly in the rapidly growing e-commerce and quick commerce sectors. This move comes in response to increasing concerns over unfair business practices within these industries and the need for a more effective regulatory framework. By establishing a method to assess production costs, CCI aims to ensure that dominant market players are not abusing their position to manipulate prices or unfairly disrupt the market.
Regulations to Assess Predatory Pricing in E-commerce and Quick Commerce
In a bid to strengthen its oversight of pricing practices, the CCI has updated its framework with the introduction of the Competition Commission of India (Determination of Cost of Production) Regulations, 2025. These regulations follow a draft set of rules released earlier in February, after consultations with industry stakeholders. The updated framework will allow the Commission to effectively assess complaints about predatory pricing and deep discounting that are often alleged in the e-commerce and quick commerce sectors, where such practices have become more prevalent.
Rather than prescribing fixed metrics for specific industries, the new regulations introduce a flexible, case-by-case evaluation process. This is expected to help the Commission handle the distinct characteristics of the digital economy, where pricing strategies may differ significantly from traditional industries. The Commission’s goal is to create a cost-based framework adaptable to various sectors, ensuring that pricing strategies are fair and in line with competition laws.
Stakeholder Concerns and Adjustments to Framework
While many stakeholders welcomed the new framework, some raised concerns about how the regulations would apply to different sectors, particularly in digital markets. In response, the CCI clarified that its cost-based approach is flexible enough to account for the diverse dynamics of the digital economy. The Commission also addressed a suggestion from some stakeholders to use market value as an alternative pricing benchmark. However, the CCI maintained that market value, influenced by factors like consumer demand and brand perception, cannot replace actual production costs as the basis for assessing predatory pricing.
The CCI’s updated regulations are intended to align with global best practices and provide a comprehensive, modern approach to competition law enforcement. These revisions also build upon previous regulations, ensuring that India’s competition laws evolve in response to changes in market dynamics and legal interpretations. As the digital economy continues to grow, the new regulatory framework is poised to play a crucial role in promoting fair competition and protecting consumers from harmful pricing practices.
