CCI Ropes In MDIS To Conduct Market Study On Impact Of AI

SUMMARY

The study will cover six primary objectives, including examining competition issues in AI markets and understanding existing regulatory frameworks in India

The study will explore the scope and nature of AI use cases, and assess associated opportunities and risks from a competition standpoint

Findings will help guide India's regulatory decisions, balancing AI innovation with fair competition

The Competition Commission of India (CCI) has roped in Management Development Institute Society (MDIS) to conduct a market study to ascertain the impact of artificial intelligence (AI) on competition.

In a statement, the antitrust regulator said that it formalised the partnership with MDIS after floating a request for proposal (RFP) in April 2024. Subsequently, an agreement was signed between the two parties on September 9, 2024.

The study will cover six primary objectives, including examining competition issues in AI markets and understanding existing regulatory frameworks in India and other key jurisdictions. Specific areas of focus include how AI applications influence competition through aspects such as pricing, mergers and acquisitions, and personalised services, which could either benefit or harm consumer welfare.

The findings from the study are expected to guide regulatory decisions in India, shaping the future of AI in terms of fostering innovation and maintaining fair market practices.

The study will encompass six objectives:

To understand existing regulatory frameworks governing AI systems and apps in India and other major jurisdictions
To reach out to all relevant stakeholders for a deeper understanding of the issues related to AI and competition
To understand trends within AI space and to ascertain enforcement and advocacy priorities of the Commission with respect to AI in markets
To understand certain key AI systems, including AI actors, stakeholders, essential inputs, resources, value chains, market structures and parameters of competition
To examine the emerging and potential competition issues in such markets
To study the scope and nature of AI use cases, and assess associated opportunities, risks and ramifications from a competition standpoint

The CCI’s RFP had underlined AI’s “substantial procompetitive potential,” affecting both the supply and demand sides of various industries. It, however, also flagged concerns, including bias in algorithms and new forms of collusion made possible by self-learning AI systems.

“The study will examine how AI-driven personalised recommendations, services, and pricing influence consumer choices,” the CCI said in the RFP.

The CCI previously also emphasised the need to address the dual nature of AI, noting its potential to enhance efficiency but also posing risks of anti-competitive outcomes if left unchecked. Bidders for the study were invited to submit proposals by June 3, with technical presentations taking place soon after.

This comes at a time when the CCI has increased its focus on digital markets, including recent investigations into digital market companies such as Google, Flipkart, Amazon India, among others.

This is part of a growing trend among regulators worldwide. Countries like the United States and the European Union are also investigating how AI affects competition and exploring new regulatory frameworks to address these challenges.

This AI study is part of the CCI’s wider strategy to regulate emerging technologies. Earlier this month, it introduced new rules requiring digital firms with significant operations in India to seek approval for mergers and acquisitions with respect to deals above INR 2,000 Cr.