CCI To Study Impact Of AI On Market Competition

The Competition Commission of India (CCI) has invited proposals to launch a study on the impact of artificial intelligence on competition in the market both positively and negatively. 

The regulator has invited proposals for a market study, which will help it shape a strategy for fostering innovation and fair competition.

According to the CCI’s Request for Proposal (RFP), AI’s transformative capabilities offer substantial procompetitive potential on both the supply and demand sides. However, concerns exist regarding potential competition risks associated with AI usage. 

The study on “artificial intelligence and competition in India” aims to deepen understanding of competition dynamics within AI development ecosystems and the implications of AI applications for competition, efficiency, analysing regulatory frameworks, engaging relevant stakeholders, and tracking trends and patterns in AI. 

By addressing these objectives, the study aims to provide insights into the intersection of AI and competition, guiding regulatory decision-making and fostering a competitive landscape conducive to innovation and efficiency.

The CCI issued RFP document to engage an agency or institution to conduct the study. They noted AI’s transformative capabilities, emphasising its significant impact on both supply and demand. 

However, they also mentioned concerns about potential competition risks stemming from AI usage. Bidders must submit proposals by June 3, with technical presentations following thereafter. The deadline for financial bids is June 28.

The study will also address how AI-driven personalised recommendations, services, and pricing impact consumer welfare and choice. Additionally, it will examine the synergies and risks associated with mergers and acquisitions (M&As) involving firms with AI capabilities. Specific factors and parameters crucial for assessing the competitive effects of such M&As will be identified and analysed as well.

The new forms of collusion prompted by the use of AI such as self-learning algorithms and whether bias in AI algorithms can impact competition will also be examined during the study.

This comes a month after CCI initiated an investigation against certain players in the fintech sector to assess whether their utilisation of technologies is influencing competition, amidst ongoing regulatory challenges within the industry.