The Competition Commission of India (CCI) has raised alarms about the potential anticompetitive effects of artificial‑intelligence technologies, noting that AI’s rapid adoption could reshape market dynamics in ways that favor dominant players. In a recent report, the regulator highlighted how AI systems, especially those relying on large datasets and complex algorithms, can create barriers to entry for smaller firms and entrench existing market power.
One major concern is algorithmic collusion, where AI‑driven pricing or bidding tools could tacitly coordinate behavior among competitors without explicit agreement. The CCI warned that such “algorithmic tacit collusion” might lead to price‑fixing or market‑allocation outcomes that harm consumers and stifle innovation, even though the parties never directly communicate.
The report also flagged data‑monopolization risks. Because AI performance improves with the volume and quality of training data, companies that control vast, proprietary datasets can gain an insurmountable advantage. This concentration can lock out rivals, reduce choice, and ultimately limit the diversity of AI‑enabled services available to Indian consumers.
To mitigate these risks, the CCI is considering a proactive regulatory framework that includes transparency requirements for AI algorithms, guidelines for data sharing, and stricter scrutiny of mergers involving AI‑centric firms. The regulator emphasized that competition law must evolve alongside technology to ensure that AI development remains open, fair, and beneficial for the broader economy.
