CCI launches market study on effects of AI on competition

The Competition Commission of India (CCI) has initiated a market study to assess the impacts of artificial intelligence on competition, efficiency, and innovation within key user industries, as outlined in a release by CCI. 

According to the market regulator, AI's transformative capabilities hold significant potential for promoting competition; however, there are also concerns regarding potential competition issues arising from its use.

The study is described as a knowledge-building endeavour by the Commission, aimed at developing a comprehensive understanding of the evolving competitive dynamics within AI system development ecosystems.

The objective of the intended study is to collect input from relevant stakeholders to gain a deep understanding of the evolving AI landscape and its application in Indian markets. The study seeks to explore crucial AI systems and markets, encompassing ecosystems, stakeholders, critical resources, value chains, market structures, and parameters of competition.

Its objectives include examining the landscape and application of AI in Indian markets, reviewing existing global and domestic legislations, and identifying the Commission's enforcement and advocacy priorities concerning AI's market application, to understand trends and patterns of AI.

The study, with its seven primary goals, is anticipated to inform the CCI's strategies aimed at promoting innovation and ensuring fair competition. It will concentrate on all aspects of competition within AI ecosystems, including generative AI ecosystems, and assess how the application of AI might affect competition, efficiency, and innovation in vital user industries.

To gain insights into the scope and effects of AI use cases on competition, the antitrust watchdog plans to collaborate with various stakeholders, including technology firms, investors, start-ups, industry associations, independent developers, and customer firms.

The Commission has solicited proposals from agencies to conduct this market study, with a submission deadline of June 3, 2024 by 5 PM. The prequalification standards require that the Agency possesses a minimum of five years of experience and maintains an annual turnover of at least ₹50 crore for each of the three financial years: FY2020-21, FY2021-22, and FY’2022-23. Additionally, the Agency must have undertaken a minimum of five studies or projects (related to AI, technology policy, competition, or sectoral studies for policy purposes) within the past three financial years.

A comprehensive AI regulation or a dedicated framework is reportedly anticipated post the Lok Sabha elections, addressing the absence of a specific policy framework governing AI in India. Earlier advisories from the Ministry of Electronics and Information Technology urged intermediaries and AI platforms to manage associated risks and ensure fair model practices without bias against Indian users.