CCI urges AI self-audits to curb competition risks in new market study

Competition Commission of India (CCI) has urged self-audits for enterprises deploying artificial intelligence (AI) in their systems to proactively identify and address potential competition concerns.

In its ‘Market Study on Artificial Intelligence and Competition’, released on Monday, the regulator said the move aims to promote ‘responsible autonomy’ and protect markets from potential distortions arising from AI use.

The study emphasised that while AI offers significant pro-competitive benefits, it can also create risks such as algorithmic collusion, price discrimination, concentration in the AI value chain, and ecosystem lock-ins. It warned that a lack of transparency in AI-driven decision-making could harm both competition and consumers.

The report stated, “Lack of transparency with respect to deployment of AI in decision making can harm competition and consumers. The enterprises are thus encouraged to adopt transparency measures to reduce information asymmetry.”

Based on a perception survey of AI startups, 37% expressed concern about AI-facilitated collusion, 32% about price discrimination, and 22% about predatory pricing.

To strengthen oversight, the CCI report also recommended that the regulator enhance its technical capabilities and infrastructure, establish a think tank on digital markets and AI, and promote inter-regulatory coordination. It further suggested that CCI engage with international competition authorities and multilateral platforms to align India’s approach with evolving global standards on AI governance, transparency, and accountability.

The report noted that competition law remains an important tool for addressing AI-driven anti-competitive practices, even as legal and regulatory frameworks continue to evolve globally and in India.

According to the study, the global AI market is expected to grow from USD 244.22 billion in 2025 to USD 1 trillion in 2031, while the Indian AI market is projected to expand from USD 7.84 billion to USD 31.94 billion during the same period.

The market study, conducted by the Management Development Institute Society (MDIS), Gurugram, was based on both primary and secondary research, including inputs from AI startups, technology firms, investors, domain experts, and industry associations.